A Rockville resident told Montgomery Council members Tuesday he felt “shocked and betrayed” when he saw a 40-percent rise in his property taxes a year after buying his home, despite assurances from a real estate agent his property taxes would not be much higher than the previous owner’s.
Tony Ieronimo urged the council to adopt legislation proposed by Council Member Phil Andrews that requires sellers to disclose what a buyer would owe in total property taxes the first full tax year after they purchase the home.
Andrews’ bill would mandate that property tax estimates for the new owner be included on any written or electronic promotional material advertising the home. According to Andrews, property taxes often jump after a home is sold because home sellers have been benefiting from state property tax caps that prohibit more than a 10-percent increase per year unless a home changes ownership.
“The existing system is misleading in that the disclosure of taxes paid by current owners suggest that taxes assessed by new owners will be comparable,” Ieronimo said. “This misinformation greatly diminishes the likelihood that home owners will correctly factor taxes into their calculation of mortgage and affordability.”
Brenda Small, president of the Greater Capital Area Association of Realtors, said the real estate industry lobbying group supports the legislation’s intent but has concerns about the implementation.
“What is the actual number that is to be derived and who is the most appropriate source to do that and what is the most appropriate means to get that information out to the public?” Small asked. “… Either way sellers and Realtors should be removed from the liability of providing that number. The [county] finance department should be the ones coming up with the formula and derive whatever the appropriate number should be for our consumers.”
Andrews said he is exploring whether it would be possible post a formula worksheet online for sellers to compute estimates of possible increases in property taxes that could occur once their home is sold.
“I think it can be made very straightforward,” Andrews said.
