People selling homes in Montgomery County will soon have to estimate the future property tax payments of homebuyers, under a new law approved 8-0 Tuesday by County Council members despite heavy opposition from real estate industry lobbyists.
Council Vice President Phil Andrews proposed legislation in September to mandate that property tax estimates for homebuyers be included in any written or electronic advertising for the home.
Property taxes often jump after a home is sold because the sellers have been benefiting from state property tax caps that prohibit more than a 10 percent increase per year unless a home changes ownership.
“It will prevent someone from being surprised or shocked by their first property tax bill,” Andrews said.
Andrews and several other council members said the legislation was necessary to help combat skyrocketing foreclosure rates. The number of foreclosure filings in Montgomery County spiked 2,000 percent in the third quarter of this year compared with the same period last year.
After meeting with real estate industry representatives, Andrews agreed to amend the bill to limit a seller’s liability so long as the seller uses property tax calculation methods approved by the county. During Tuesday’s meeting, the council also approved an amendment that says the county Office of Consumer Protection must assist sellers who seek help in calculating the new property taxes.
While real estate industry representatives acknowledged that most of their concerns had been met, Meredith Weisel, a lobbyist with the 12,000-member Greater Capital Area Association of Realtors, said her group remained opposed to the bill because the tax-estimation process is too complicated and time-consuming for most sellers to use.
“We think it should be on the buyer to do these calculations since they are the ones who will ultimately be benefiting from it,” Weisel said.
About 10 real estate industry members attended the council’s vote and held signs to show their opposition. The law goes into effect April 1, 2008.
The council also unanimously approved a bill Tuesday that would allow a property tax credit of 10 to 75 percent for green buildings certified by the U.S. Green Buildings Council, with the size of the credit depending on the number of environmentally friendly features.
