Salisbury, Md. – The Coastal Association of REALTORS® (CAR), a trade association that represents over 1,000 local real estate professionals, is opposed to the proposed property tax increase for non-owner occupied properties in the City of Salisbury.
Joel Maher, President-Elect of the Coastal Association of REALTORS®, speaks at the May 22 public hearing for Salisbury’s proposed Fiscal Year 2018 budget, which includes a property tax increase for non-owner occupied properties.
The Salisbury City Council is currently considering a two-tier property tax structure, which would charge more for residential and commercial properties that are not owner occupied. The current tax rate for all city properties is $.9432 per $100 of assessed value. What’s proposed is a tax rate of $.90 per $100 of assessed value for owner-occupied properties and $1.06 per $100 of assessed value for non-owner occupied properties. City officials have said that the new tax structure is meant to incentivize homeownership and reduce the city’s stock of rentals.
Joel Maher, the 2017 President-Elect of CAR, spoke during the May 22 public hearing for the city’s proposed Fiscal Year 2018 budget.
“So much of our time is spent ensuring the future of our industry because too often, we feel the government turns to the real estate industry when they are in need of funding,” Maher said. “In this case, Salisbury aims to incentivize homeownership by establishing two separate tax rates. We are 100 percent behind the idea of incentivizing homeownership, but should it be done on the backs of renters, investors, and business owners? They are also important to the real estate industry.”
CAR does not feel that creating a two-tier tax structure is fair to city property owners, and doesn’t believe that anyone – owner or renter – should experience a tax increase in the coming year.
The association’s main concerns are as follows:
- Commercial REALTORS® may experience difficulty in attracting businesses to a city with a complicated tax structure that has them paying more, depending on whether they choose to buy or lease commercial space.
- Residential REALTORS® may experience difficulty in selling homes to potential investors, or even to buyers who may want to rent their home someday, for one reason or another. There are hundreds of rental properties in Salisbury owned by people who needed to relocate for work or other reasons and do not have enough equity in their homes to sell. Many choose to convert their homes to rentals to avoid foreclosure.
- Most businesses in Salisbury lease their commercial space, making those properties non-owner occupied, and thus increasing taxes for businesses, both small and large.
- Increased tax costs will be passed along to renters, many of whom may not be able to afford higher rents, especially if the city increases its water and sewer rates by 15 percent, which is also proposed in the FY18 budget.
“Our association is very much in favor of incentivizing homeownership, but we’d like to see it done without a tax increase for anyone, which includes property owners and property renters,” Maher said. “The foundation of our advocacy work is private property rights, which very much includes the right to purchase a property and rent it to someone who needs a place to live, as well as the right to use a rental property to establish a business. We’re asking the city to incentivize homeownership without increasing taxes, driving up costs for city residents, and making it more difficult for REALTORS® to sell properties.”
For more information about CAR, visit www.coastalrealtors.org.
More about Coastal Association of REALTORS®
Coastal Association of REALTORS® is the leading local advocacy group in the real estate industry on the Lower Eastern Shore of Maryland. Coastal REALTORS® works in partnership with its members to promote home ownership and preserve, protect, and advocate private property rights. The organization supports 1,000 REALTORS® who serve Somerset, Wicomico, and Worcester counties.
For more information on Coastal REALTORS®, visit www.coastalrealtors.org. The term REALTOR® is a registered collective membership mark unique to real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS® and subscribe to its strict Code of Ethics.
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