Riley: Prov Property Tax Nightmare Could Spill Over to all Property Valuations
Thursday, December 28, 2017
However, you must show up in person in Providence in the next 2 days. I have been asked this question generally about Rhode Island and nationwide it is a hot topic due to the $10,000 tax cap on deducting property taxes. Readers are right to say this probably affects very few households in Providence.
The city had no figures on who it might affect and said there was no noticeable recent increase in prepayment activity.
I find this surprising. A simple perusal of those currently trying to sell homes in Providence, where property taxes exceed $10,000 annually, numbers approximately 32 homes according to Zillow. The area code most likely to be affected by the new tax law is area code 02906. The average home value estimate is there is $428,000. I used $ 590,000 or higher as the criteria for $10,000 annually in property taxes.
A simple example of the significance of the new tax law is a home for sale on the East Side with 3 beds 5 baths, 6,483 square feet for $1,249,000. That property currently pays approximately $21,800 in Providence property taxes every year. A buyer would need to calculate that he can only deduct $10,000 from his income starting January 1, 2018. Thus, this law significantly reduces the value of that home to any buyer.
Remember, those 32 homes are just the homes for sale, we do not have the data for all the $600,000+ value of households in Providence who will be severely impacted by the new tax law. Rhode Island is a very high property tax State and Providence is a very high property tax city that is on the verge of bankruptcy. Residents and new buyers know that taxes will only go higher and current valuations are clearly going lower possibly triggering a Detroit like meltdown. For many Eastside homeowners, the scramble to leave Providence begins now and its effects will spill over to other neighborhoods in unpredictable ways.
Providence is not alone in having homes instantly devalued overnight by this new tax law. Newport, Watch Hill, and Narragansett may also be vulnerable. Residents in this predicament should immediately call their local tax assessor and their accountant in order to get their last shot at a “prepayment” deduction before 2018.
Related Slideshow: GoLocal: Benchmark Poll, October 2017
Next year, in November of 2018, there will be a statewide general election for Governor and many other state offices. How likely is it that you will vote in this election?
Will you definitely be voting, will you probably be voting, are you 50-50...
Definitely be voting: 78%
Probably be voting: 13%
What would you say is the number one problem facing Rhode Island that you would like the Governor to address?
Jobs and economy: 21%
State budget: 9%
Corruption/Public integrity: .8%
Don’t know: .9%
Recently, a proposal has been made to permit the issuance of $81 million in bonds by the State to build a new stadium for the Pawtucket Red Sox. If there was an election today on this issue, would you vote to approve or reject issuing $81 million in financing supported moral obligation bonds to build the stadium?
Net: Approve: 28%
Definitely approve: 15%
Probably approve: 14%
Net: Reject: 67%
Probably reject: 19%
Definitely reject: 48%
Don't know: 4%
The next question is about the total income of YOUR HOUSEHOLD for the PAST 12 MONTHS. Please include your income PLUS the income of all members living in your household (including cohabiting partners and armed forces members living at home).
$50,000 or less: 27%
More $50,000 but less than $75,000: 13%
More $75,000 but less than $100,000: 13%
More $100,000 but less than $150,000: 17%
$150,000 or more: 13%
Don't know/refused: 17%
What particular ethnic group or nationality - such as English, French, Italian, Irish, Latino, Jewish, African American, and so forth - do you consider yourself a part of or feel closest to?
Black or African American: 6%
- Riley: Forecasted 7 Year Returns From Top Analysts Spell Doom for RI Pensions
- Riley: A Pension Fund Solution
- Riley: Mayor Elorza Laughs at Municipal Black Hole
- Riley: How to Fix Narragansett - And All RI Municipal Pension Issues
- Riley: St. Joseph Pension Collapse Was Negligence or Malfeasance by Kilmartin
- Riley: China, Trump, and the Grey Rhino
- Riley: Time to Worry About Stocks
- Riley: If Only Our Treasurer Knew How to Hedge Properly, Now Would be the Time
- Riley: Fake News? Whatever
- Riley: Elorza’s Delusion
- Riley: When Will Rhode Island Retirees Get Truth About COLAs?
- Riley: Misleading Municipal Investors in Providence
- Riley: Why Doesn’t All of Rhode Island Use One Discount Rate?
- Riley: Bitcoin Rally is Just Beginning
- Riley: Bitcoin Mania Could Turn Into a Fiat Currency Crisis
- Riley: Connecticut Municipalities in Scramble With Hartford & Moody’s
- Riley: Magaziner Was Barely Alive Then, But I Lived Through 1987 Crash
- Riley: Hey Hartford, Why Not Just Laugh at Bankruptcy, Like Elorza
- Riley: Rhode Island Receives a “D” from Truth In Accounting
- Riley: Is Wall Street Fueling Rhode Island Pension Funds?
- Riley: Providence Finances in Dire Straights
- Riley: Bitcoins? Trust Those Who Know How to Play the Short Side