Tax Structure: Habitat For Humanity

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Tax Structure: Habitat For Humanity Habitat for Humanity is a nonprofit organization dedicate to building homes for low-income individuals. This organization requires that potential homeowners assist in the building of their home or others to reduce the financing cost of homeownership. This paper focuses on the percentage of property tax revenue, two arguments in favor, and two arguments property tax breaks for Habitat of Humanity homeowner, and case resolution. Quantification "In 2004, property tax collections in the U.S. exceeded $300 billion. Property taxes are responsible for approximately 72% of all local tax revenues, representing the most important tax revenue source for local governments" (as cited in Shan, 2010, p.195). National statics does not separate Habitat for Humanity homeowners from other property owners. Consequently, this is also true for Wake County. Currently, Wake County uses a formulaic approach to property taxes to ensure equity in tax payments. This formulaic approach takes the home's market value divided by $100 multiplied by adding the county rate of .534 with the city rate for Raleigh is .3735, and a recycle fee of $20.00. For example, a home valued at $150,000/100 (.9075) + $20 would pay $1381.25 in property taxes. Neighboring counties of Johnston, Franklin, Chatham, and Durham also use this formula for assessing property taxes, which is in accordance with the North Carolina General Statues. Therefore, Habitat for Humanity homeowners pays the same property tax rates as their neighbors ensuring payment equity of property tax revenue. Arguments in Favor of a Property Tax Break Habitat for Humanity homeownership is income based; therefore, any future property tax assessments should c... ... middle of paper ... ...Finally, Habitat for Humanity should reconsider their mortgage calculations and provide extensive counseling on the affects of property taxes on home mortgages. References Netzer, D. (1973). The incidence of the property tax revisited. National Tax Journal, 26(4), 515-535. Leonard, T., & Murdoch, J. C. (2009). The neighborhood effects of foreclosure. Journal of Geographical Systems, 11(4), 317-332. doi:10.1007/s10109-009-0088-6 Mikesell, J. L. (2010). Fiscal administration: Analysis and applications for the public sector (8th ed.: 2010 custom edition). Mason, OH: Cengage Learning Shan, H. (2010). Property taxes and elderly mobility. Journal of Urban Economics, 67(2), 194-205. Wake County. (n.d.). How your property tax dollar is used. Retrieved from Wakegov.com website: http://www.wakegov.com/NR/rdonlyres/6D11C633-E80E-40FA-BF45-2E21C8B1EDEF/0/Charts2011.pdf

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