Property Taxes

Understanding the Impact of Property Taxes

Property taxes are the financial backbone of local government. They account for nearly three-quarters of local tax revenue and are a key local source of revenue to fund K-12 education, police and fire departments, parks and other services. ์นด์ง€๋…ธ์‚ฌ์ดํŠธ

Property taxes also shape local real estate markets by influencing the cost of buying, renting or investing in houses and apartment buildings. By understanding how changes in property taxes affect household and community development. Enables local jurisdictions to make their tax systems more effective. The best way to understand the impact of an existing or proposed tax initiative. To examine the impact at the real estate level in your community.

However, this is difficult because each county reports property-level tax payments differently, and it is difficult to accurately identify owner-occupied properties. At a recent Urban Institute event, two researchers shared how they overcame these challenges in their work with home registry data. Her case studies shed light on the interactions between property taxes, housing supply and housing mobility.

Property tax records show how California’s Proposition 15 could affect state housing supply

In 1978, California passed Proposition 13, which lowered property taxes. By blocking local property valuations in 1975 or at last market value purchase price. And limiting valuation increases to no more than 2% per year. This has drastically reduced an important source of tax revenue for municipalities. As real estate values โ€‹โ€‹have risen sharply in recent decades while property tax hikes have been significantly reduced.

The Tax Vote Proposal, Proposition 15, creates a common property tax system. Which residential and commercial properties would be valued and taxed under different systems. Commercial real estate would be revalued in the market every three years. While residential real estate would continue to be taxed under the rules of Proposition 13. The split rollover would create incentives that would increase or decrease the supply of housing in California. ์˜จ๋ผ์ธ์นด์ง€๋…ธ์‚ฌ์ดํŠธ

Using data from early US real estate registries in California, they combined information on property taxes, appraisals, and zone codes. Additionally, because zone codes are not standardized across jurisdictions, the authors selected four case studies from cities (Berkeley, Chula Vista, Fresno, and Los Angeles) to represent different types of communities.

They found that very few lots were suitable for conversion from residential to industrial or commercial use, while many lots were suitable for conversion from commercial or industrial to residential use. Their analysis showed that “the long-term incentives for landlords and developers to build/convert into apartments are much stronger than for municipalities to move in medium to high price growth scenarios”.

Property tax records show the impact of the new ‘

gentrification tax program — when a large group of high-income families move to a low-income neighborhood — could replace long-term financially troubled homeowners. When higher-income families move into the neighborhood, property values โ€‹โ€‹and property taxes often rise.

Lei Ding, senior economic adviser at the Federal Research Bank of Philadelphia. And her co-author used property tax data to determine whether the 2014 property tax revision. The researchers used landlord data to gather information about the owner’s tenure status, property valuation history, and Tax payment, including tax credits and tax exemptions. Ding and his co-author found that “gentrification increases property values, property taxes, and the risk of property taxes falling behind”.

But five years later, there was no sign of relocating older and financially disadvantaged homeowners. Which the researchers attributed to the protection provided by Philadelphia’s targeted gentrification tax credit programs. Despite the challenges of working with property-level tax records. Researchers can use these records to understand how the housing tax meets various policy objectives. With careful analysis, this data can help policymakers make their tax systems more effective. ๋ฐ”์นด๋ผ์‚ฌ์ดํŠธ

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