Property Taxes Will Continue to Rise Across the U.S.

Why You Will Pay More In Property Tax

September 12, 2011

The Prospector Site - I have bad news in saying I’m 99% sure most of us will see an increase in property tax for two reasons.

REASON #1: HOUSING BOOM & BUST

The housing boom will go down in history as the largest economic expansion in US history. Trillions of dollars created as folks from all walks stood in line to buy overpriced housing. Farmland turned into multiple phases of new home developments nearly overnight as America enjoyed wealth and prosperity like it would never end.

New city halls, more plan checkers, more building inspectors, and more city/county vehicles all needed to service the new housing gold rush of our century. Fees and tax money flowed like two dollar wine as all America grew drunk on cheap and borrowed money.

From Wall Street’s mortgage-backed securities to Main Street’s prosperity the shoe quickly dropped leaving no one unaffected.

Just as some asked if it could last it didn’t leaving millions of folks owning homes far less valuable than encumbered. What once looked like a solid source of saving turned into an unpaid liability sinking further in value. But all the above agencies still need fresh revenue to fund payrolls and pensions. Government agencies expand quickly but decline slowly leaving you targeted for more revenue. You will need to pay more or risk branded as in compassionate and unpatriotic (not opinion but fact).

REASON #2: REAL ESTATE OWNED (REO)

I hadn’t heard the term shadow inventory until a couple of years ago. The definition, as I understand it, means homes owned by somebody but not being paid on. This odd transition between bank owned (foreclosed) and owner occupied leaves millions of houses lived in but not paying taxes or mortgages. Nearly every city in America is experiencing record levels of homes owned by banks or in shadow inventory but not paying property taxes.

With fewer paying property taxes the answer is obvious at least for those willing to admit it. You, unless you walk away, are expected to take part in the revenue shortfall by paying more property tax.

But before you write another check let me ask you something. Isn’t it true that city and county assessments are based on property value? Isn’t also true property values country-wide are in decline? How can your property tax bill increase if your property is in decline? Get ready for another new word, for some of us, called supplemental property tax.

You may be thinking all this doesn’t pertain to you since you gave up home ownership and now rent. Well not so fast as landlords realize cash flow is only positive if someone else is paying expenses. Expect your rent to increase to offset all supplemental property tax increases soon.

So many of today’s economic obstacles point to the value of gold and silver ownership. Of course owning gold will not keep your property taxes down but what owning metal will do is stabilize your wealth in uncertain times.

The majority of those working for cities and counties are good people caught in a trap of economic correction. Most only want what was agreed on in the first place. The problem is the agreement is not an option anymore because we are broke. As the size of government contracts all Americans should expect creative ways for government to tap into your wealth. It is imperative to preserve what wealth is left by owning real assets like gold and silver.

READER QUESTION: Why is gold going up and real estate values going down?

ANSWER: Great question. Real estate should not have gone up like it did. Only because of cheap and easy credit did values grow at least in most markets. This false appreciation is causing a huge over correction leading to an undervalued real estate market. If you can buy far less than you can build the market has over corrected at least in my eyes. I have no idea how far down the real estate market will drop but it still is in decline in most markets.

Gold is another story. Gold has an increasing interest as a source of real money. People worldwide are realizing printed money like dollars, yuan, yen, euro, pound, etc are becoming more worthless as governments answer budget shortfall by printing more money. Gold and silver cannot be printed therefore they are becoming the benchmark of asset values. Please look into owning gold or silver or both sometime soon.