As the 2011 calendar year winds down, New Orleans property owners’ thoughts turn toward their 2012 property taxes due by the end of January, because the city has mailed out its annual notice and reminder – just in time for the holidays! However, this is not a new phenomenon. It is effectively an annual ritual, like Mardi Gras or Jazz Fest, though clearly with less pageantry. And it applies to property owners only. Not renters. And not non-profits, which are another article for another time.
(But, for the moment, want an eye opener? Go to www.opboa.org and peek at the assessed value for 5005 St Charles Ave, aka The Orleans Club: it’s just over $10.2M. It’s likely right or at least in the ballpark, but any tax dollars the city may reap from this grand dame ain’t never gonna happen as this nonpr0fit social club is tax exempt. Thousands upon thousands of dollars never to be gotten, annually ranging somewhere in the $150,000 spectrum. Why, that’s enough for another deputy mayor! But then that’s what non-profits do. They don’t profit, therefore they can’t be taxed. Don’t get me started on faith owned properties. Anyway, back to the workaday stiffs who actually pay property tax.)
Sticker shock! Being in real estate and often helping first-time home buyers buy in Orleans Parish, our taxes can come as quite a surprise to the freshman purchaser. But even the out-of-towner too. If a client has owned elsewhere, buying here it is rare they do not raise an eyebrow over our millage rate – and for what we get in return. Street condition, city services, etc. Then there’s the whole if you don’t pay your taxes, you are subject to tax sale. Which actually is one of the two things that is right about our property tax system.
Accountability. If you don’t pay your property tax, some one else may, but usually not out of the goodness of their heart. And even if they don’t and you don’t, there are serious scenarios whereby one’s property severs from the delinquent. Don’t let this happen to you. Own or rent. If you own, pay your taxes. If you don’t want to pay your taxes, sell your property, and go back to renting. Easy as that. This breeds a fairness across the board for all property owners, whether their address is properly assessed or not (again, yet another article for another time), so we all share the burden. Even as a renter your monies in theory contribute to the property tax the land owner is responsible for. In other cities like Philadelphia there is no legal recourse to severing property from the delinquent and the city can be owed taxes with no legal force. And their taxes aren’t even that high. So, New Orleans gets a gold star here.
New Orleans gets another gold star for collecting property tax at the beginning of the year. Why? Budgets, that’s why. Managing a budget on theoretical funds over a 12-month cycle is not advisable. Get the money up front and then spend it. From what I can tell most other if not all other area parishes cycle for year’s end. Kudos to the city for being up front on the billing; now let’s work on fairness of assessing.
For clarity and for all the number crunchers out there, the present millage in the city is .01475 (I think) on any given property’s assessed value. The only few factors that would impact a variance therein include a tax freeze based upon age or disability, the aforementioned exempt, and the ever popular homestead exemption. But what is a homestead exemption? It is the one and only way your primary residence may reduce its assessed value annually and by $75,000. You must file it each year to reap its benefit, and it is only applicable to your home – no investments and no LLCs!
To be sure, no one relishes paying property taxes, but hopefully we all get what we pay for. We should, shouldn’t we?
Jean-Paul Villere is the owner of Villere Realty and the Du Mois gallery on Freret Street and father of four girls. In addition to his Wednesday column at UptownMessenger.com, he also writes an occasional real-estate blog at villererealty.com and shares his family’s adventures via pedicab on Facebook and Twitter.