NEW: Mayor Taveras Closes Corporate Tax Loophole for Foreclosing Banks
Thursday, November 03, 2011
Mayor Angel Taveras today signed an executive order that closes the corporate tax loophole that allows foreclosing banks to hold onto the owner occupied homestead exemption, and enables new homeowners of foreclosed properties to immediately receive their owner occupied homestead exemption.
Mayor Taveras signed the executive order surrounded by local elected officials and housing advocates in front of a foreclosed, bank-owned single family home on Ardoene Street in Providence’s Reservoir neighborhood.
“In my first 10 months as Mayor I’ve worked daily to address the impacts in Providence of our nation’s most serious economic downturn in decades. In particular, there is a great need to address the foreclosure crisis that is crushing hope and opportunity for too many in our community,” said Mayor Taveras. “Banks shouldn’t get owner-occupied tax breaks – we’re fixing that immediately. Together with our friends in the housing community, we are moving forward decisively to rebuild our city and make sure that all the citizens of Providence have access to safe and affordable housing.”
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTIn a longstanding administrative practice in Providence, banks that foreclose on properties have continued receiving the 50% owner occupied homestead exemption on the properties until the end of the calendar year. At the same time, new owners of foreclosed properties have had to wait until the next calendar year to begin receiving the owner occupied homestead exemption.
The executive order will encourage owner occupied homeowners to purchase foreclosed properties and begin the process of rebuilding our neighborhoods that have been so negatively impacted by the national foreclosure crisis.
In addition to immediately reducing their taxes, the executive order helps potential homebuyers because many banks qualify buyers based on taxes at the time of sale, without recognizing that the homestead will become available in the future.
It also makes financial sense for the City of Providence, which loses tax revenue whenever a foreclosing bank or corporation continues to receive the 50% owner occupied exemption until the end of the year.
Providence had 574 foreclosures in 2010. This year, another 341 foreclosure deeds have been filed as of September 21. Through September, the city has lost about $300,000 in revenue because of this administrative loophole.
“This is an issue of fairness for those who have been impacted by the foreclosure crisis that has swept across our city and our nation,” Mayor Taveras said. “Since I’ve become Mayor we’ve considered how we can address this issue, and this was a clear correction that had to be made.”
Joining Mayor Taveras for the executive order signing were Senator Juan Pichardo, Representative Scott Slater, Councilwoman Sabina Matos, Councilman Wilbur Jennings and Councilman Luis Aponte.
Housing Action Coalition of Rhode Island Executive Director Brenda Clement, Olneyville Housing Corporation Executive Director Frank Shea and numerous other housing advocates also joined the Mayor for the signing.“
As a candidate, Mayor Taveras called attention to the high number of foreclosed properties across our city, and talked of turning that sea of plywood into opportunity and hope for our neighborhoods. It’s no surprise that since becoming Mayor he is following through and providing leadership on this critical issue,” said Clement.
