Property tax bill needs legislators' close review

August 16, 2007

West Virginia Gov. Joe Manchin this week threw his support behind a bill that would allow senior citizens to defer payment of real estate taxes until the property was sold or transferred to someone else.

We agree that seniors on fixed incomes should not be taxed out of their homes because property values have outstripped their pensions.

But the details of this bill are important, for a number of reasons.

A tax-deferment bill was introduced in the last session of the state legislature by state Sen. John Yoder, R-Jefferson, but died in the Senate Finance Committee.

The bill was discussed in a July legislative summit for state lawmakers from Berkeley, Jefferson and Morgan counties.

A freeze on property-tax assessments for those who could demonstrate financial need was discussed, but some lawmakers expressed concern that it could attract new residents seeking a tax haven in their retirement.


The idea of deferring senior citizens' property taxes has merit, but lawmakers must first figure out how such a bill would impact state revenues. West Virginia has one of the oldest populations of the 50 states and the cost of deferring so many residents' taxes could be substantial.

For that reason, we recommend that the legislation include the following requirements:

· That the deferral affect only that portion of the tax resulting from recent assessment increases and not the entire property tax bill.

· That the property on which the tax is deferred be the principal family residence, as opposed to a vacation home or a mixed-use property with commercial and residential uses.

· That some provision be made in the event that the amount of tax deferred eventually exceeds the value of the home.

And, grown children living with an elderly parent as caretakers shouldn't have to come up with several thousand dollars immediately just to stay in the home when the parent dies. Some mechanism to allow heirs to pay off the debt over time should be part of the bill.

This is a complicated issue, in part because a home is the greatest investment of a lifetime for many people. Helping people who've paid taxes for many years stay in their homes is a good thing, but lawmakers need to consider all the possibilities before passing such a bill.

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