SANTA FE, N.M. (AP) — County and real estate officials urged the Legislature on Wednesday to deal with a thorny problem of property tax inequities among New Mexico homeowners, also known as "tax lightning," when taxes skyrocket on some residential property.
At issue are widely varying valuations of residential property for tax purposes and continuing fallout from a more than decade-old law intended to protect longtime homeowners in communities such as Santa Fe when market prices — and potentially property tax bills — were rising dramatically.
Several county officials told a legislative committee it's a good time for lawmakers to resolve the property tax problem because recent market declines will ease some of the needed valuation changes.
The goal is to equalize valuations of residential property — ensuring that New Mexicans pay their fair share of property taxes — but minimize the tax increases for those whose homes are assessed for tax purposes at well below market prices.
Under a law that took effect in 2001, property values can climb only 3 percent a year for tax purposes. However, that doesn't apply when a home changes hands. New homeowners can be hit by "tax lightning" and their property taxes are much higher than their neighbors whose houses are covered by the 3 percent annual cap.
A homeowner's property tax bill depends upon local tax rates as well as the taxable valuation of their property.
San Juan County Assessor Clyde Ward outlined a proposal to a legislative committee to update the assessed valuation of most homes to 90 percent of market values. However, there would be limits on the valuation increases for certain people, including those who've lived in their homes at least 10 years.
He estimated that one-third of the homes in New Mexico were valued at less than 80 percent of market values.
The proposal was developed by a task force assembled by the Realtors Association of New Mexico. Among those who participated were county assessors, the New Mexico Association of Counties, a legislator who leads a tax committee and officials from budget and tax agencies in Gov. Susana Martinez's administration.
Ward and Gary Perez, Santa Fe County deputy assessor, acknowledged that some New Mexicans will face property tax increases but said the proposal softens the impact.
"It's not a win-win situation," said Ward. "We're going to have a near-win, near-win situation because there is no way we can rip this off after so many years of the cap being in place. We have to have some sort of adjustment."
The effect of the proposal would vary widely from county to county. Only about 10 percent of homes in Santa Fe are below 90 percent of market value, according to Perez.
In the Albuquerque area, however, there are some homes at about 40 percent of market value, lawmakers were told.
Sen. Peter Wirth, D-Santa Fe, expressed concern that the proposal could cause large tax increases if property valuations jump by as much as 40 percent for some homeowners.
"How is that not going to result in a displacement situation where someone simply can't afford to pay those taxes?" Wirth asked.
County officials said there are protections in current law, including a freeze on valuations for low-income and elderly taxpayers. They also emphasized that all homeowners potentially suffer from higher tax rates when property valuations are artificially low. If property valuations are equalized, they said, there's a broader tax base and rates potentially may go down under the state's "yield control" law that's supposed to prevent large revenue spikes for government simply from a property revaluation.
Lawmakers urged to resolve property tax inequities
This article
Lawmakers urged to resolve property tax inequities
can be opened in url
http://newseruniversal.blogspot.com/2012/12/lawmakers-urged-to-resolve-property-tax.html
Lawmakers urged to resolve property tax inequities
