Are annual property taxes really a form of charity, or just never ending ground rent for homeowners?
The new tax law has some states and local authorities across the nation scrambling for ways to reclassify property taxes and other costs in order to make living and owning real estate there more palatable. One of the big debates is whether these fees should actually be deemed charitable contributions. A word of caution. The IRS has warned that prepaying 2018 property taxes may not be tax deductible. No property should be rushing to pay these taxes either, not until they have reviewed assessments and have appealed over-charges, and looked at other options. Over in New Jersey, taxing authorities have been working on solutions to combat the impact of the new tax bill. One potential solution is allowing homeowners to make a charitable contribution in the amount of their property taxes. That way they can deduct the entire amount, even if it exceeds the new $10,000 limit. In some cases this may make this bill far more palatable. Few people like paying ‘taxes’. More may be motivated to help ‘charity’. Plus, after all, property taxes are often used like charity in many ways. It would also be interesting to see charity regulators rank various towns and counties on how much good they really do with this revenue. On the downside, this might tempt some taxing authorities to try and increase bills even further. Of course, others just see see annual property taxes as perpetual rent for the privilege of owning property in America, and home ‘ownership’ as just a great marketing ploy, and way to motivate people to boost national GDP. For places with annual property taxes, they never go away. They do often fund essential and great services, such as health care, transportation, law enforcement and education. Yet, they can be a big burden. Especially when you don’t use many of those services. Either way you see it, don’t overpay! There are other charities that are more efficient, and in line with the causes you care about most. If it is a rent, you can use that money saved for other charities, upgrading your home, or saving for retirement. Get in touch with your local Property Tax Adjusters, Ltd. team to make sure you aren’t overpaying in 2018.