Montgomery County home sellers would have to inform potential buyers of likely property tax increases that would come with the new abode, under a bill introduced Tuesday by Council Member Phil Andrews.
Andrews said buyers often are unaware that the property taxes on their new residence will be much higher than what the home’s current owners are paying.
Home sellers, Andrews said, are usually benefiting from state property tax caps that prohibit more than a 10 percent increase per year in property taxes unless a home changes ownership.
“When people are buying a home, they need to know this,” Andrews told the County Council. “It can be a big difference of $2,000 or more [per year], or a couple hundred dollars a month. In the times that we’re in, where so many people are having trouble making payments, that can make or break somebody’s ability to stay in a home.”
The bill would require that sellers disclose what a new owner would owe in total property taxes the first full tax year after they purchase the home on any written or electronic promotional material advertising the home.
Meredith Weisel, lobbyist for Greater Capital Area Association of Realtors, said her organization agrees with the intent of the bill but has concerns about its implementation.
“The problem with this legislation is that the accuracy will not always be perfect,” Weisel said. “There are a lot of different variables that go into property taxes, like the time of year of the sale and when the state reassesses the property, both of which can also affect what you’re paying.”
Weisel said the industry already has taken some steps to ensure buyers are aware their property taxes could change.
According to Weisel, language is included in settlement sheets that explain property taxes will most likely increase for the new owner.
“We’re concerned this bill could put a major liability on the seller and the Realtor,” Weisel said. “If somebody comes back and says you told me $2,000 and my property taxes were $2,500, that contract could be void.”
There will be a public hearing on the measure Oct. 2.
