This is the first part of my new [tag-tec property taxes ]series[/tag-tec] on property taxes.
Senate Majority Leader Bill Frist’s brother, Thomas Frist, used to own the most expensive house in town (Nashville). In 2003, it was valued right at $15 million. Today the Belle Meade mansion is only worth a paltry $7.4 million.
It all has to do with the way properties are assessed in parts of Davidson County. And I’d wager this problem is becoming more widespread across the county based on the reports we are getting.
Belle Meade, the “old money” wealthiest neighborhood in town, determines property values based on land values first. Then house values.
So it’s not uncommon to have a property where 75 percent of its value is in the dirt and 25 percent value is actually in the house.
Thomas First’s property has 37 acres which were assessed at $2.9 million in 2003. Now the same acreage is worth $7.4 million.
As I’ve alluded to in earlier posts, I see this as a way to get older, less affluent people out of in demand neighborhoods that are hotting up. These folks are being replaced with younger newer money.
And as we know, new money spends more easily than older money.
Example in Point
Belle Meade City Manager Beth Reardon talks about seeing one permit for a kitchen gutting. What was unusual, or in affluent Belle Meade, not unusual, was that the previous owner had recently renovated the kitchen with a six figure price tag.
Here’s the real problem as I see it. The first thought that goes through the minds of city officials is we can tax them more. Why not, they can afford it, can’t they? But is it a fair tax?
We can say with no reservations those [tag-ice]kitchen[/tag-ice] gutters had already paid taxes to the hilt as they remodeled. In Davidson County they paid close to 10 percent sales tax on every piece of lumber, nails and fancy granite that went into it. And they will continue to pay almost 10 percent sales tax on every bite of food that comes out of their new heavy duty frig.
Yep, in a prosperous land like ours you’re going to have people who make a lot of money. And they’ll be spending it. So what? Let them.
The problem is in the thinking of county assessors across the country. They assume everyone who owns any property is fair game. If a middle class family saves up and adds a room out back, they will have to pay more tax too. And as the way things are going now, their tax bills are getting not only significantly higher, but almost beyond their paying ability. Where will it all end?
In the next post, I’ll delve deeper into scrape-offs which is the real fuel behind today’s property tax assessment upheavals.