Property tax is a self-assessment tax that is paid annually and is charged on the market values of the residential properties in the state. Every state including Virginia imposes property taxes so as to boost the revenues for that particular jurisdiction. According to Mr. Kemp Steiner, who works for the local government of Virginia property taxes, are vital for there to be the provision of services in the county. Mr. Kemp Steiner works for the Virginia tax department and has knowledge on taxation matters.
The levies come from real properties such as land, commercial and private buildings and non-commercial cars. Property tax is mostly a proportion or percentage of the property and hence increases as the property value increases. Following the meltdown of the economy in 2008, the market prices of the local properties plummeted and so are the mortgage rates. Virginia property prices have reduced, and the impact of this is mainly the reduction of taxes collected by the tax collection authority (Thomas, 2012). Mr. Steiner suggested that the only way to counter fluctuation of property value is by formulating good policies to ensure that revenues from property taxes are maintained at particular level.
Property tax policies should be correctly formulated for there to be a minimal reduction in the taxes collected. In 2008, after the economic slump that affected the country, the property prices in Virginia fell by an average of 20%-25%. The downturn limited the availability of the credit and also enabled financial institutions to tighten the criteria for lending hence affecting the liquidity of the state of Virginia. Revenue collection for the state is affected by the how well the property’s value is performing. A vibrant property market will result into more developments; therefore, the revenues from taxes will be more. In conclusion, the state should formulate policies that do not allow the property market to regulate itself. Subsequently, the revenues collected will not be determined by the value at the market prices.
Chapter 18 appraisal process
In any market, prices are determined by the market forces which are demand and supply. However, the prices in the property market are set by the seller who mostly set the prices so high to raise the margin. Therefore, must an appraisal process to determine the prices of the property. It is important for there to be an independent appraiser who comes in as a third party to set the price of the property. The third party is brought in the negotiation so that the price set by an independent appraiser reflects the value of the property.
After the 2008-2009 economic crises, the mortgage prices went down and hence there was the introduction of the home valuation code of conduct. The Dodd frank act is a financial reform bill that was aimed at ensuring that the home prices are realistic in value and also accurate, it was also created to push aside the property brokers who pressurize the value of the properties. The impact of the home valuation code of conduct on lending and the overall spectrum of the economy is enormous. As a result, the introduction of an automated valuation model will ensure that there is standardization in the way home prices are valued. The lending institutions, therefore, will rely on the home valuation code of conduct to know the value of the property.
The Dodd frank financial reform bill that superseded the home valuation code of conduct and its main purpose was to protect the interest of the consumers and suppliers of goods and services. The bill has had an impact on the appraisal process in the following ways; the prices of the properties will be standardized based on the area that the property is located; therefore, there will be no overpricing or under pricing the property. Lenders will be required to use software that enables them to maintain their existing networks while also complying with the regulations.
Independent appraisal management companies have been affected by the introduction of home valuation code of conduct because the appraisal fee has gone down significantly. I had the opportunity to interview Mr. Rick Howard, who is an independent appraiser. Mr. Howard has been negatively affected by the introduction of Home Valuation code of conduct reason being the fall in appraisal fee by almost 50%. The independent appraisal companies have, therefore, been affected by this reduction in prices negatively. Secondly, an independent appraiser is supposed to do all the work and also bear the entire burden in case of liability. The home care valuation code of conduct has negatively affected the evaluation process such that the veteran appraisers like Mr. Howard are considering a change of career. This depends on the state because different states have different ways to implement the laws. However, the prevailing mood from the appraisers who were interviewed is that many independent appraisal companies are not interested in renewing the licenses since the introduction of home valuation code of conduct.
Property is a primary source of wealth to many Americans, the renter’s bill of rights provides for an understanding between the landlord and the tenant on the rights and responsibilities on either party. The main problem that exists between the tenant and the landlord are mainly to do with security deposits and the provision of a safe living condition. Virginia State provides the renter’s bill of rights; however, the rights are not implemented to the latter. Security deposit should be returned when a tenant shifts from that property or within fourteen days after the tenant has moved out. Safe living condition is also another right for the tenant and so the landlord has to ensure that the property is well maintained and all the utilities in working condition (Thomas, 2012).
Thomas, H. (2012). Real Estate Appraisal Death of an Industry. New York: Hamp Thomas.
United States. Congress. (2012). Dodd-Frank Wall Street Reform and Consumer Protection Act. Washington: U.S. Government Printing Office.