Thursday, May 10, 2012

A Taxing Situation

"If you can't say something nice, don't say anything at all". 

With that being said, there are several posts that I write, but never publish. I wrote this about two years ago to the day, but note, the nice part comes at the end.

Being that my building was a burnout, everything in it is new. In the process of renovating everything, I had a vision in my head as to how I wanted the finished product to look. I can't say the rehab was high end, but we didn't skimp either. There are hardwood floors in every room, porcelain tile in the bathrooms, decorative light fixtures, ceiling fans and recessed lighting generously placed everywhere, stainless steel alliances and full wood cabinetry in the kitchens, full paned windows, mosaic tile in the entryway, and so on...

Days when my taxes were almost non-existent

In researching another property in the vicinity, I was reviewing the tax roster for that building. Out of curiosity, I looked at my place, and found I was the second highest assessed property on the street, the only one higher being a building that had twice as many units, and its taxes being only slightly higher than mine.

I'm not trying to shirk my responsibility to pay taxes or dispute the fact that the City needs the revenue, but my reward for making my building as nice as I could is being charged more than anyone on the block, while other buildings reap the reward of their lesser taxes by doing as little as possible to improve anything. If the City wants to preserve their historic district and wants people to make improvements, they need to come up with a better way to determine how taxes are assessed. Sure, the value of the building is the main driver, but there should be other factors that either help moderate amount you're paying or reward you for improvements. For example, when filing income taxes, I can deduct expenses I incurred in making the improvements, and something similar should be imposed when the school and property taxes are calculated.

The assessed value of the property should remain in line with the market value, but there should be some sort of rebates or discounts offered to encourage improvements, like discounting the taxes due a fraction of a percent for every so many dollars you reinvest in the property.

Now for the nice part. With ideas buzzing around in my head again, I called the tax assessor about a particular property, to see what would be the final impact of a project I have in mind. Talking to her, she mentioned a 444A Historic Real Property Alternation or Rehabilitation Exemption. Basically, you do not get taxed on the improvements you do for ten years, but note the percentage of what you don't get taxed on decreases over the ten years. This gives you a chance to be rewarded for the effort, and even helps you ease into those higher taxes without going into shock. It even buys you time to get things in order before you get that big tax bill.

The form is even linked onto the City's website (along with a number of other exemption forms), so there was no need to jump through hoops in order to find it. Even the phone call was painless- I called the number that was posted on the city's website, Joanne Majewski (the assessor) answered the phone herself on my first try. No voice mail, no pressing ## to reach so-and-so, no holding on, as we've so come to expect when dealing with official agencies. I know, saying that last part wasn't nice.

It was only adopted by the city a couple of years ago, so unfortunately, it can't help me with my prior project and my current taxes, but it definitely helps making a new one much more tempting!

1 comment: