Another View -- Steve Stanek: Impact fees for new homes actually raise property taxes
As they struggled to keep up with rapid population growth, local officials began pointing to the one-year lag in property tax collection. Tax bills sent out this year are for property owned last year. The politicians argued buyers of newly built houses were skating by for as much as a year, using schools, roads, libraries and other services without paying property taxes to help fund them. Their solution was to begin charging impact fees to builders of new houses, arguing the fees make up for the lag in property tax collections.
• Impact fees artificially raise the sale prices of new houses.
• Property taxes are based on the market value of a piece of property.
• Artificially high selling prices mean artificially high market values, which means artificially high taxes.
Steve Stanek (email@example.com) is a research fellow at The Heartland Institute in Chicago.
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