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Author Topic: MT Property tax is a nightmare  (Read 4145 times)

Eddie Willers

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MT Property tax is a nightmare
« on: July 13, 2003, 04:07:17 am »

Hello All,

I just pulled this off "The Missoulan" newspaper. It describes the way property taxes are calculated in Montana. Aside from the sheer ridiculous and gratuitous complexity of the whole thing, the most striking part of it is that property values are recalculated every year with the value automatically jacked up 16%. YIKES!

"Over the next six years, the appraised value of your property will grow by 16.6 percent annually"

http://www.missoulian.com/articles/2003/07/13/opinion/opinion1.txt

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There must be a better way to tax - Sunday, July 13, 2003

                                                                                       


                                                                                       

SUMMARY: Property assessment notices make a good case for simpler, fairer system.

We've all been comparing our new property-tax assessment notices, which arrived in the mail last week. The notices from the state Department of Revenue are, more than anything, proof that Montana's property-tax system bears improving.

The first thing you'll learn from your notice is that it's impossible to easily understand how you're being taxed. That can't be an accident.

                                                                                                                                                                                       

                                                                                                                                                                                                                                       
                                                                                                       

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Here's how they figure it: They take the 2002 assessed value of your property (which, inexplicably low, bears only the most distant relation to its plausible value); then they take the new assessed value (also bearing no close relation to actual value) minus the 2002 assessed value; multiply that by 16.6 percent and add the total to the 2002 value; from that, they subtract 31 percent for residential property or 13 percent for commercial property. Then you take that number and multiply that by what they call the "taxable percent," which is 3.4 percent for residential property. That number is then multiplied by the total mill levy in the particular place where you live. Divide by 1,000 and you get your tax bill in dollars. Over the next six years, the appraised value of your property will grow by 16.6 percent annually, so the calculation will change yearly. Changes in the mill rate also will require you to refigure it all. Want to know how the heck they come up with that mill levy number? You have to go talk to the folks at your county courthouse.

A convoluted system has been made more convoluted by the Legislature's attempt to phase-in the impact of rising property values. The alternative would be to hit people with whopping tax increases all at once, inviting homeowners to take to the streets in protest. No one in Helena or your county courthouse wants anything to do with riotous taxpayers.

The real problem here, of course, is that taxes based on assessed value of property are unfair. They're unpredictable, impossible for individuals to control and, for some, downright unaffordable. The value of a home or building may rise greatly over time with no relation to a person's ability to pay taxes.

A far fairer - and simpler - way to tax property would be to tax the acquisition value. You would know at the time of purchase the basis of your taxes. Using the purchase price would eliminate the hocus-pocus of periodic appraisals and phased-in adjustments. Tax increases and decreases would be executed by changing the rates alone, not by changing the value and rates.

Take a few moments to study your tax appraisal notice before you file it away. You can't read it without thinking, "There's got to be a better way."

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'nuff said.

Eddie
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mactruk

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Re:MT Property tax is a nightmare
« Reply #1 on: July 13, 2003, 04:06:20 pm »

  FYI  most mill levies are under .5 which puts thr real % at about 1.6%.  The issue here is most property owners can not vote to remove the politicos.  Most MT  folks cant afford homes so we kill the non residents.
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Zack Bass

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Re:MT Property tax is a nightmare
« Reply #2 on: July 13, 2003, 04:08:25 pm »


Most MT  folks cant afford homes


Where do they live?

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freedomroad

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Re:MT Property tax is a nightmare
« Reply #3 on: July 13, 2003, 05:20:03 pm »

Hello All,

I just pulled this off "The Missoulan" newspaper. It describes the way property taxes are calculated in Montana. Aside from the sheer ridiculous and gratuitous complexity of the whole thing, the most striking part of it is that property values are recalculated every year with the value automatically jacked up 16%. YIKES!

"Over the next six years, the appraised value of your property will grow by 16.6 percent annually"

http://www.missoulian.com/articles/2003/07/13/opinion/opinion1.txt

----------------------------------------------------------------------------------
There must be a better way to tax - Sunday, July 13, 2003

                                                                                       


                                                                                       

SUMMARY: Property assessment notices make a good case for simpler, fairer system.

We've all been comparing our new property-tax assessment notices, which arrived in the mail last week. The notices from the state Department of Revenue are, more than anything, proof that Montana's property-tax system bears improving.

The first thing you'll learn from your notice is that it's impossible to easily understand how you're being taxed. That can't be an accident.

                                                                                                                                                                                       

                                                                                                                                                                                                                                       
                                                                                                       

<!-- // Hide from older browsers
OAS_RICH('Middle1')
// End hiding -->

                                                                                       

Here's how they figure it: They take the 2002 assessed value of your property (which, inexplicably low, bears only the most distant relation to its plausible value); then they take the new assessed value (also bearing no close relation to actual value) minus the 2002 assessed value; multiply that by 16.6 percent and add the total to the 2002 value; from that, they subtract 31 percent for residential property or 13 percent for commercial property. Then you take that number and multiply that by what they call the "taxable percent," which is 3.4 percent for residential property. That number is then multiplied by the total mill levy in the particular place where you live. Divide by 1,000 and you get your tax bill in dollars. Over the next six years, the appraised value of your property will grow by 16.6 percent annually, so the calculation will change yearly. Changes in the mill rate also will require you to refigure it all. Want to know how the heck they come up with that mill levy number? You have to go talk to the folks at your county courthouse.

A convoluted system has been made more convoluted by the Legislature's attempt to phase-in the impact of rising property values. The alternative would be to hit people with whopping tax increases all at once, inviting homeowners to take to the streets in protest. No one in Helena or your county courthouse wants anything to do with riotous taxpayers.

The real problem here, of course, is that taxes based on assessed value of property are unfair. They're unpredictable, impossible for individuals to control and, for some, downright unaffordable. The value of a home or building may rise greatly over time with no relation to a person's ability to pay taxes.

A far fairer - and simpler - way to tax property would be to tax the acquisition value. You would know at the time of purchase the basis of your taxes. Using the purchase price would eliminate the hocus-pocus of periodic appraisals and phased-in adjustments. Tax increases and decreases would be executed by changing the rates alone, not by changing the value and rates.

Take a few moments to study your tax appraisal notice before you file it away. You can't read it without thinking, "There's got to be a better way."

------------------------------------------------------------------------

'nuff said.

Eddie

I know that New Hamphire has extremly high property and housing prices and taxes.  However, I never knew that this was a problem in Montana.

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Mactruk said,
Most MT  folks cant afford homes


Are you serious?  Where do they live?
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mactruk

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Re:MT Property tax is a nightmare
« Reply #4 on: July 14, 2003, 01:57:14 pm »

  Vacation and part times who reside in FL or other non income tax states.  
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Zack Bass

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Re:MT Property tax is a nightmare
« Reply #5 on: July 14, 2003, 02:08:18 pm »


  Vacation and part times who reside in FL or other non income tax states.
 

Is this post in reference to your previous post that said "Most MT folks can't afford homes", and my question "Where do they live?"

Is that what your answer is?  The MT folks who cannot afford homes live in Florida?
Does that make sense to anyone?
(1)  These are Montana folks
(2)  They cannot afford homes
(3)  They reside in Florida.

I keep saying to myself, "Self, these are Florida folks, not Montana folks; and they can afford homes, since they reside in Florida."  I reside in Florida, and everyone I have seen who resides here can afford a home, unless he's living with his Mom.  Some of them don't actually purchase a House or a condominium Apartment, but since they pay rent to the guy who does own the property, obviously they can afford to buy if they choose.
Do most MT folks live with their Moms in Florida?

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mactruk

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Re:MT Property tax is a nightmare
« Reply #6 on: July 14, 2003, 04:45:25 pm »

 Sorry I was not clear - the people who own homes here dont reside here so they cant vote - the tax rate is dictated by a small amount of voters whom most do not own property.  Older folks who dont work anymore take advantage of a home here but reside in a state with no income tax (not a bad deal).
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Zack Bass

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Re:MT Property tax is a nightmare
« Reply #7 on: July 14, 2003, 11:54:47 pm »


the tax rate is dictated by a small amount of voters whom most do not own property.


But those people live there, right?  Or else they couldn't vote, right?
So they're paying the property tax on the property where they live; their landlord has to charge them for the tax he pays.

Quote

  Older folks who dont work anymore take advantage of a home here but reside in a state with no income tax (not a bad deal).


This just gets curiouser and curiouser.
Why would someone who has no income bother to live in a State with no income tax?  What kind of deal is that?

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freedomroad

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Re:MT Property tax is a nightmare
« Reply #8 on: July 15, 2003, 02:14:12 pm »


the tax rate is dictated by a small amount of voters whom most do not own property.


But those people live there, right?  Or else they couldn't vote, right?
So they're paying the property tax on the property where they live; their landlord has to charge them for the tax he pays.

Quote

  Older folks who dont work anymore take advantage of a home here but reside in a state with no income tax (not a bad deal).


This just gets curiouser and curiouser.
Why would someone who has no income bother to live in a State with no income tax?  What kind of deal is that?



I know this is all a little confusing.

I think he is saying that most of the people the live in MT and are from MT do not have a great deal of money and they take advantage of the people from CA, FL, and NY that have second homes in Montana.  

I guess this is the same way that the state of MT (as a whole) takes advantage of other states and gets tons more money from the federal government than its citizens pay in federal taxes.
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