Foreclosure Tax Legislation Pending
Re: SB 2196 / HB 2175 – Recognize Foreclosure Effects upon Assessments
Senator Jim Kyle and Speaker Lois DeBerry have sponsored this bill, endorsed by the Tennessee Taxpayers Association, to allow the taxing authorities to recognize foreclosure sales in making appraisals and assessments for property tax purposes.
At the present time, certain rules, practices, statutes, and precedents make it difficult for the assessors and the boards of equalization to recognize foreclosure sales as comparable sales in appraising other properties.
Obviously, when foreclosure sales become numerous, they have an effect upon the values in a neighborhood and this should be recognized.
However, foreclosure sales have never reached an epidemic level before where they even had to be recognized. Since there was a limited number, they were always ignored.
This new law, however, would make it possible for the assessor and the boards of equalization to treat taxpayers fairly in appraising their homes at what they are really worth; not some fictitious price higher than the true market value. Without this new law, it will be very difficult (perhaps impossible) for taxpayers to receive true justice reflected by a real market values.
The bill is a general bill with local application to only Shelby County. Shelby has been particularly hit hard by foreclosures and taxes are much higher in Shelby County. For example, in 2008, taxes on a home in Memphis were 65% higher than a comparable home in Nashville. Therefore, any overvaluation in Memphis results in respectively a greater burden to the homeowner.
In addition, we anticipate that appeals will go on until this time next year before a homeowner may even be heard before the boards. By that time, it will have been necessary to file another appeal for 2010.
Perhaps, the bill may be expanded next year to include other counties, but, this is an emergency year in Shelby County. Of course, other counties could amend into the bill if they desire. We are sure that the sponsors would not object. In Shelby County, and perhaps some other counties, the 2009 reappraisal has caused increases in the appraisals and assessments of these affected homes.
The bill has sailed through the Committees because of its good intentions and what it will accomplish for the taxpayers of Shelby County.
Please talk your representative and Senator. Ask him or her to vote for the bill. It is coming up for vote in the Senate and House soon.
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