The Property Tax – With All Its Warts – Has its Advantages
From the perspective of taxpayers, the property tax certainly can seem onerous at times. The rate of the tax is based on the value of the property whether or not the property actually produces any current income. It seems as though it is unrelenting, because the property tax rarely seems to go down from the previous year, and more likely than not, it tends to increase as the costs of state and local government seem to be ever increasing. Finally, if an owner of a property does not have the wherewithal to pay the property tax, the government may seize the property and sell it to pay the tax.
And yet the property tax does have many advantages. First and foremost is that the obligation to pay the property tax also comes with the right to appeal the tax assessment. Not only that but the taxpayer has the benefit of using publicly available information regarding the values of other properties and how other properties are assessed in order to prosecute its appeal. Many taxes, such as income-based taxes, are shrouded in secrecy in order to protect the confidentiality of the information provided by businesses and individuals who pay the tax. For this reason, it is generally not possible to compare how much a taxpayer pays in income taxes to other taxpayers. Consequently, the property tax is by far the most transparent of all types of taxes because the information regarding what it is based on and what other taxpayers pay in taxes is publicly available.
Finally, and perhaps most importantly, the property tax represents the purest form of dividing the burden of government among taxpayers so that each taxpayer pays its fair share. In most states it is a constitutional right to have the amount of property taxes determined so that it is proportional. What that means is that every taxpayer should pay the tax on the same percentage of value as every other taxpayer who owns that type of property. If one taxpayer is assessed so that it is paying a tax that is 20% higher than what other taxpayers are paying in proportion to the value of the property that they own, then the taxpayer has the right to seek a reduction in its property taxes so that it is in line with what other taxpayers are paying.
It is through this constitutional right afforded every taxpayer that the property tax provides the means through which the burden of the costs of government are divided among the citizens so that each taxpayer pays its fair share. However, a right must be exercised to fulfill its purpose, and taxpayers must exercise their right to appeal their property taxes so that they do not end up paying more than their fair share of property taxes.
By: John F. Hayes, Esq., General Counsel to Allobar Strategies and former general counsel to the New Hampshire Department of Revenue Administration
For more information on how to exercise your right to appeal property tax assessments, please visit Allobar Strategies.