Foreclosures Considered in Setting Tax Values

Georgia foreclosures have continued to soar through the past months, causing real estate distressed properties including foreclosure homes to have very low sale prices. This has pushed the state’s legislators to act on a bill to control the situation. Senate Bill 55 states that foreclosure sales should be considered in setting the tax values of homes and other related properties.

This is because of the recent increase in the number of foreclosed homes in the US, more specifically in areas such as Georgia. As a result of the economic recession, homeowners who have lost their jobs and a significant amount of money along with it have been forced to let go of their homes because of their inability to pay their mortgages. This then resulted to thousands of repossessed houses with prices even lower than their tax values.

Homes are taxed according to their fair market value or their retail prices. With this, at foreclosure, it is very likely that homeowners may even be paying more for the tax of their homes than the sale value of their foreclosure homes.

Senator Chip Pearson, Senate Bill 55’s sponsor, says that a property’s foreclosure value should be seen as a very important factor as it is affects the whole neighborhoos, and as a consequence, the whole area or state as a whole.

The bill is expected to have great effect on local governments and residents. Areas with high foreclosure rates can experience their tax values to decrease by large amounts. Although this has a good effect on individual residents facing foreclosures, it poses other problems especially on the governments.

Officials have already expressed apprehension regarding this matter, as low tax values can cost millions of dollars worth of tax revenues. Assessors have likewise said that the bill puts great risk on the sale of houses and other properties, in general.

Burt Manning, chief appraiser in Fulton, said that this drastic change in the system makes the market highly volatile. DeKalb County’s interim chief appraiser Terry Raider has the same sentiment, saying that considering foreclosures in setting 2009 tax values would cost them huge amounts of money.

Related Posts:

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• HUD Secretary Bernardi Calls for Compromise on Foreclosure Bill
• Minnesota Senate Approves Foreclosure Bill
• Senate Reaches Compromise on Funding for Anti-Foreclosure Bill
• Senators Agree on Funding for Foreclosure Bill