I know it's been a tough couple of years for the real estate industry and Realtors, but will you please stop your whining and trying to be tax lawyers and economists. You in the industry advocated the point-of-sale provision in order to get the artificial cap on rising home assessments. Folks, we have the lowest property taxes in the universe here in Horry County. I guess you will only be happy when there are no property taxes and no discount brokers.
To give a little background, real estate taxes have traditionally funded local government in this country, and those with higher property values are supposed to pay more, not less on a relative basis. Determining the fair market value of a property in a volatile market is difficult, but what we do know is that an arms length sale price is the best way to determine up to date market value. Some call it point-of-sale. It is a good, fair rule, and should be used as the benchmark of our assessment system. It should not be discarded.
Yes, your taxes will be higher than your neighbor, until his home gets reassessed. Of course he won't pay as much as you for the same house, because the Realtors passed a cap on his reassessment valuation. Unfair? Yes. That's the law that should be repealed.
Regarding the higher rate that second homeowners and investors pay, I agree it is unfair, but I bet you supported it years ago, and how are you going to fix it? On the backs of resident homeowners? How do you replace this major revenue source?
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Now let me give you something to really whine about: the very unfair mortgage tax deduction, which is currently capped at $1 million. I know a lot of you want to get rid of that cap too. So let's see, at 5 percent that would be a $50,000 tax deduction for the rich guy, or how about $25,000 for the guy with the $500,000 mortgage. How much do you get to deduct for the place where you live? Well it's zero if you rent or paid cash or the mortgage is paid off. Most retirees here in nice homes have pretty low balances. Folks, you are subsidizing the investors and those living near the beach with maximum mortgages. That's unfair.
I suggest we lower the cap from $1 million to $200,000 for starters. That's about $25 billion of new revenue to help reduce the deficit. Did you know that Canada and England don't have this very biased deduction? Don't think that "will ever happen?" Well, you used to be able to deduct the interest on your car loan. Not anymore. But here in South Carolina we capped the sales tax so the guy buying the $100,000 Mercedes pays the same as the guy buying the used pickup. Getting the idea that we have an unfair tax system here that benefits the wealthy?
There's an old boat industry saying that if you can afford the boat, you shouldn't be whining about the dock fees. So stop lobbying for bad laws that you don't even understand. Leave it to the tax experts to devise a fair system. Get out and represent your sellers and buyers, and don't forget to disclose those higher taxes on non-owner-occupied properties. I'd hate to see y'all get sued.
The writer lives in Myrtle Beach