As the property tax debate continues to rage around the country the media continues to highlight how the system stays stacked against the average homeowner. Just how disparate has it become, and what are the best solutions for individuals?
Affordable Housing
Among the most notable news of the last few weeks is the revelation of how tax payers are now funding the business of big private equity funds through Freddie Mac. Morgan Stanley reveals a new $18 billion dollar plan to pass sweet heart deals from Freddie Mac onto the largest multi-billion dollar funds for more apartments under expanded descriptions of ‘affordable housing’. Anyone who has attempted to rent from one of these institutional landlords recently already knows that it is anything but affordable, and the screening process is often far more stringent than trying to get a mortgage loan.
Real Estate Developers Still Receiving Sweet Heart Deals
From David Beckham’s Miami soccer stadium deal to the dramatic transformation of Brooklyn, NY which has seen new luxury condo developments create faster growth on Long Island than Manhattan, developers continue to get massive tax breaks, or even pay zero taxes for higher cost projects. They are subsidized to build real estate projects that are out of reach of the average individual. The real issue is that it is those that can’t afford to keep up with soaring taxes and housing costs that are actually paying for those subsidies.
PA Joins the Property Tax Push Back
Pennsylvania has been the latest state to join the fight against high property taxes. PA is the latest to pose slashing the property tax burden by replacing $1.4 billion in property tax revenue with sales taxes. Not everyone is happy about the move, but it is becoming a popular alternative being posed in many jurisdictions.
Summary
The average homeowner is still subsidizing those that are trying to price them out of their homes every year. The lobbying power of big developers is likely to ensure that this stays this way for quite a while. Until the system is changed in a dramatic way the best solution for individuals is to continue to use all the tax breaks at their disposal, and continue to challenge their own property taxes and minimize their burden.