I read this morning that Baltimore City, Maryland passed an ordinance that will take effect in about 3 months which will change the way that Property Taxes can be advertised in the city by Real Estate Brokers. The article, The City Requires Higher Tax-Data Accuracy In Real Estate Ads was published by BaltimoreSun.com and written by
Apparently within the city, many homeowners have been given tax breaks, credits and tax relief through the years. These credits belong to the owner and do not transfer with the sale of the house. Many home purchasers are unexpectedly caught off-guard by substantially higher tax bills than expected when the property tax normalizes after the sale.
The property tax issue is one that all Realtors need to be careful with. It is virtually impossible to be sure that tax payments will remain constant for any property. Every jurisdiction handles their assessments differently, but often the sale of a house will trigger a re-assessment (and they almost never go down). Even in communities where they DO go down, the tax rate for the community is often adjusted up to compensate for sinking values, so that the collected revenues remain constant.
Personally, I am very careful to let my clients know that the amount on the tax record is the amount paid for the year reported ONLY. It reflects the assessment at that point in time and the rate for the year stated. I let them know that there is very strong likelihood that the amount due will change. The future assessment of the house and the tax rate are pieces of information that I cannot provide to them.
This ordinance will be very helpful to purchasers in planning their future tax payments. As an agent who works with both sellers and buyers, I am very surprised that Listing Agents/Brokers would open themselves up to the liability of advertising the current Property Tax Amounts--it sounds vaguely like a promise--I know I wouldn't!
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I could be wrong, but I believe the information reported in the tax records of MRIS reflect the actual tax, not the one paid by current homeowners. This is a change that took place when MD initiated new requirements a few years ago for the Homestead Tax Exemption, i.e. a homeowner would not be eligible until they had owned and occupied the property for six months after the most recent July 1. In other words, no Maryland the problem this ordinance seeks to correct occurs when someone uses the most recent tax bill of the owner in the listing, rather than the MRIS database for tax records. I suspect this is most likely to happen with a FSBO or a licensee who is not a REALTOR.
I find it interesting that a Reston Virginia agent is posting this... do you sell in Baltimore, as well?
Margaret, Thanks for your observation. I suspect you are right about the FSBOs being a large part of the issue.
I do not sell in Maryland, but I keep an eye on 'real estate current events.' This came up in my Google Real Estate section, today and I find the issue behind the ordinance to be universal.
Every time I sell a property, I need to explain to my buyers that the amount listed on the tax record reflects what the current owners paid not what the new owner will, necessarily, owe. Although this article was written for a specific market, the issue it discusses is important information for any market.
Thanks for your comment!