Real estate lobbyists say they still aren’t satisfied with changes to a proposed Montgomery County measure aimed at battling skyrocketing foreclosure rates that would require home sellers to disclose to potential buyers what they would pay in property taxes.
Council Member Phil Andrews proposed legislation in September to 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 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 is crucial that homebuyers know what the property tax liability will be when they buy a house so they can make an informed decision about whether they can afford to buy and stay in the home,” Andrews told The Examiner. He said the measure could be one tool to help the county fight skyrocketing foreclosure rates.
A recent report from the governor’s home foreclosure task force said Montgomery County foreclosures are up nearly 1,700 percent in the second quarter of 2007 from the same period in 2006. The county had 605 foreclosures between April and June 2007, compared with 34 during those months in 2006.
Officials from the Greater Capital Area Association of Realtors have said the industry lobbying group’s members are concerned that sellers or Realtors would be held liable for miscalculations of future property taxes.
Andrews said he amended the bill to remove that concern.
“I met with them in September to hear what they had to say, and I addressed some of their concerns in amendments,” Andrews said. “I added an amendment that says as long as a seller uses methods provided by the county, they would not be liable.”
Meredith Weisel, a lobbyist for the Realtor association, says her organization still has concerns about its implementation.
“It is not easy to calculate the post-purchase property taxes,” Weisel said.
Council Member Duchy Trachtenberg, a member of the Management and Fiscal Policy committee that will review the bill today, said council staff prepared a worksheet that could be a model for the actual form used to compute projected taxes.
“Several of us on council have tried the form, including myself,” Trachtenberg said. “We were able to use it and get a good sense of what the new tax bill would be. I don’t think it is that confusing or difficult. We certainly don’t expect to have it down to the penny, but we want it close enough so people have a sense of what they will be paying.”
