The intent of the Hancock Amendment was to limit the rate of real estate tax increases to a defined percentage per year. Our assessments on two properties rose 19 and 81 percent. What happened? A creative “loophole” permits land and home to be assessed separately. The increases were explained by rapid growth in land prices. But is that true?
When a contractor buys an older home for $150,000, tears it down, builds a new home and sells it for $600,000, where is the “added value?” I assume the preexisting home had some appraised value, perhaps $50,000. Upon teardown that value disappeared, leaving a land value of $100,000. If it was worth $100,000 before and $600,000 after new construction, where is the extra value? In the new construction, not the land.
This kind of new math would confound even Newton and Liebnitz, creators of calculus.
We have lived in our 60-year-old house for 35 years. Based upon activity in our neighborhood, we live in a teardown! Averaging us in with a collection of newly-constructed homes is simply wrong and probably illegal. Why are we subsidizing new construction? The “loophole” has become a noose. We are senior citizens who can pay the taxes, but what about many retirees who are victims of “Trickonomics?”