Greetings Everyone!
I am following the V.I. property tax issue with interest as a landowner in St. Thomas and with concern for friends on St. John, and I have these questions about the new valuations and proposed rates.
Now that the valuations are in, everyone is talking about what the new rates will be. What I have not heard is the figure — the amount of money — in the government’s opinion, that the property tax revenues need to be. I have not heard how much they were last year, how those revenues were dispersed, or how much more or less we need to raise the property tax this year and why.
These are the questions that if answered will make more sense of this issue.
In most places across the U.S. as I know it, property tax rates are infrastructure-driven. If a new school or fire station is needed, rates go up; if property values go up but no new street lights are needed, the rates go down. Property taxes should pay for things we need, not automatically or arbitrarily penalize people when the value of their land goes up.
If the whole amount of the V.I. property tax was fixed at last year’s amount plus an inflation index, an influx of high-end rental villas and hotels would probably make the average homeowner’s taxes go down.
The V.I. government is telling us that since our properties are worth so much more than last year, we should pay more taxes, though our properties seem to be fetching less actually if you are trying to sell.
Few get away with paying no taxes. If you sell a property that’s worth a million more than when you bought it or when your parents left it to you, the government will take its share. This is called capital gains tax and is how the government makes money when land values go up. This happens when you sell.
If you don’t want to sell, I think the government has an obligation to reduce escalating rates so that selling because you can’t afford the taxes is unheard of. Having to sell because a condo that blocks your view has made your taxes triple lacks some fundamental reasonability.
Since we now have the power to structure the property tax code however we want, perhaps we should reevaluate property only when it is sold. This would reward people who hold onto their property for a long time with lower taxes.
I would like to see total property tax revenues stabilized at last year’s level for now and earmarked for certain portions of the community’s needs. Education would be my major vote. If my property taxes went up because we built a new school, that would be fine. I don’t much like my taxes going up for no discernible reason, artificially inflated land values included.
If you are of the same mind and heart please ask, question, pester, find out how much more property tax than last year does the government need and how much goes to what. I’ll do the same and if I find out, I will let you know.
If property taxes were need based, reasonably contained, and somewhat more humane, I think people would feel better about paying them.
V.I. resident since 1986,
St. Thomas