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Real Property Tax Stipulations

Major Tax Structures: Property Taxes
Case: The real property tax is based on property values, not the income of holders of the real estate. As the story reported here demonstrates, this situation can create some difficult issues when real estate values are increasing rapidly

1. Explain how you would quantify the amount or percentage of property tax revenue that comes from owners of Habitat for Humanity houses in a particular municipality.

2. Provide two (2) arguments in favor of giving a property tax break to owners of Habitat for Humanity houses.

3. Provide two (2) arguments opposing giving a property tax break to owners of Habitat for Humanity houses.

4. Determine the best way to resolve the problem described in the case.

Solution Preview

Essentially, I would quantify the amount or percentage of property tax revenue that comes from owners of Habitat for Humanity houses in a particular municipality, based on the rate that is charged for the property taxes of other homeowners in a particular municipality. For instance, the property tax rate in the city of Raleigh, North Carolina, is approximately $.61 per $100, and this rate should be applied to the owners of Habitat for Humanity houses as well, due to the fact that all citizens within a given area are responsible for paying the taxes which help to fund public works such as roads, police departments, public clinics, etc.

One argument in favor of giving a property tax break to owners of Habitat for Humanity houses, is the fact that these houses were built by a nonprofit organization in order to help ...

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