In case you missed it, today’s Virginian-Pilot has a piece about a proposed deferral program for real estate taxes, which council is looking at in lieu of a signficant rate reduction.
However, Winn is pushing a tax deferral program that essentially would allow long-time residents to defer assessment increases of 5 percent or more each year. The deferred assessments would be carried as a lien against the home that would not be paid until the home was sold or the homeowner chooses.
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Mayor Paul D. Fraim is skeptical of the program. City officials say they can’t find another county or city in the state that uses it, even though it is allowed under state law.
Hmm – I need to research this a bit. If no one else in the state is using it, there has to be a downside.
Seems to me the immediate downside would be the lien against the home. I can see where such a lien would create problems in the event of refinancing (likely would have to be paid off, unless the city were willing to subordinate to the new lender, which would likely increase the costs of refinancing). The other issue would be the additional paperwork necessary to calculate and file the liens to start with, and to properly release them when they are paid off. The Treasurer’s office currently handles liens for real estate taxes (thru an outside attorney) so this would likely be handled there as well.
Like I said – a bit of research is in order.
VIVIAN J. PAIGE | All Politics is Local 