04/14/06		Spring is in the Air, and your Appraisal is in the Mail.
David Tuthill

Spring is in the air, and that means the annual dread of going to the mailbox to receive notice that the Dallas Appraisal district wants to increase the value of my home above the 10% limit that the law caps increases at thereby increasing my property tax bill.  They probably were not satisfied by the 48% they gouged me for last year.  After all, we have suspension bridges to build and school superintendent and trustee perks to pay for. 

Indeed with the conflicting tales of real estate markets slowing down vs the real estate boom and that according to The Dallas Morning News that 30% of house sales are not for primary residence but speculation (purchased to be rented out or later sold to a developer) due to the past upheavals in the equity (stock) markets.

The logic goes "if you sold your home or if your neighbors sold their home this is what the structure vs the land would be"?  Of course, it is easy for them to en mass increase the land value for an entire neighborhood (I am sure the appraisal district just runs a process on their database of homes to add X dollars to the land value -- a very easy task in the computer age).   

In one letter to The Dallas Morning News "letters to the editor", a reader suggested that since many homes in their neighborhood were brought by developers who turned around and demolished the home that the structure be appraised at a zero value.   After all, if it is to be destroyed... 

This is a mistake in logic, as that would leave the total purchase price to the land
component of the appraisal formula.  This would allow the appraisal district to en mass value the entire neighborhoods land value at the cited sales price (on top of the existing structures).

Besides the proposed cap of 5% per year, I would argue the proposal that the Republican primary initiative passed overwhelmingly (the results never made the newspaper after the election), that the formula between structure vs land be ratioed in a fixed proportion.

If you look at appraisals in south Dallas, the structure is valued more than the land.  If a developer wants to purchase a home and scrape the house and build a McMansion, then the land portion should not be upped but the structure value should be increased to reflect the original cost of the scraped structure as well as the true value of the new structure that they will build. 

In short, we who live in older smaller homes should not bear the cost of their development and profits in our tax bills as the result of their speculative activities.

Since 30% percent of residential homes are 2nd homes or an investment, perhaps the homestead exemption should reward homeowners who reside in their homes longer (primary residence) with a higher homestead exemption - a graduated scale that would increase the exemption the longer they reside in the home as their primary residence. 

Perhaps, too, the exemption should start after the owner has been in the home one full calendar year.  The builder/developer who builds a home and only resides in
the home a year or less, before they flip it, would not have any exemption. 

There are several houses and lots in my area that in their existence (over 5 years) that each year they have a new owner (more flipping than the shows at sea world) -almost like a hot potato that no one can hold for long without burning their hands.

Why should homeowners have to pay for these antics with higher taxes and higher valuations?

One last observation, the school funding/property tax special session that will occur this month that promises to give homeowners relief from their property tax bills probably will result in little impact on the homeowner tax bill.  Like rearranging deck chairs on the Titanic with little lasting effect.

David W. Tuthill