Rising property taxes in US add to worries
Yet another worry for home owners is soaring property tax. Around the country, people are struggling to stay in their homes because of the inability to pay taxes.
As the foreclosure numbers rise and the overall economy slumps, homeowners face pressures more so than ever before. Now, not only do they need to worry about being able to handle a reset of their mortgage rates, but also whether they can afford to pay property taxes.
Property taxes in several areas continue to grow, making it harder and more strenuous for home owners to stay in their homes. In Chicago, for example, taxes jumped 35 per cent in 2007. A home in upscale Mournighan valued at $1.35 million is going to pay US $35,302 in taxes annually. However, that same home has jumped in value by more than 70 per cent over the last five years, and would have had to pay $5,200 in taxes just five years ago.
In areas such as New York, government is looking at ways to offer respite. A bill here may help to replace STAR rebate checks. Tax credits would be used instead to help home owners struggling to keep up with property taxes. Approximately one million homes would receive such credits, which is only about half of those that were getting checks last year.
The idea is to provide credits to those that need it most. Eligibility is based on location and applicable to only those that have lived in their homes year round for the last five years. Additionally, there would be a sliding scale of property tax help. For example, on Long Island, those with an annual income of US $250,000 would be required to pay between 6 per cent and 8 per cent. Anything over this percentage in income would be refunded (up to 70 per cent) by the state government.
Without some measure, home owners may face default for lack of ability to repay taxes here.