Good news for home owners in Boone County as sales and values in general are on the rise. This means your home is gaining value through appreciation and that is a good thing. The board of realtors released the following statistics for Burlington, Florence, Union and Walton:
Burlington: 467 sales in 2016, up from 399 in 2015h.
The median sales price was $172,500, up just over 5% from 2015.
Florence: 780 sales, which is very consistent with its previous year sales of 773.
The median sales price was $143,700, which is up just over 5% from 2015
Union: 539 sales, which is up from 481 in the previous year. The value held steady with the previous year with little change in value at $270,000; however, Union still continues to maintain its top spot overall for priciest homes in Boone County.
Walton: 218 sales in Walton, which is up from 203 in 2015. The value jumped slightly to $184,500, which is a 1.59% increase from 2015.
What does this mean? Boone County Kentucky continues to be a place that people want to move to, with sales going up, and values continuing to rise thus showing the desirability, stability and all the more reason to invest and live in Boone County.
Boone County Fiscal court through its new initiative to fund the 911 dispatch center by placing a “dwellings tax” on all apartments could wind up taking money from the schools. If you are not familiar with the “dwellings tax” let me explain. Boone County Fiscal court is going to vote for a tax that will put a $90 per unit per year tax on apartments on each parcel. So, if
someone has let’s say 100 units on one property then that apartment owner will be responsible for a $9,000 tax, in addition to all the taxes and fees they already pay. This is an astronomical number and for now popular opinion is to put it on the backs of landlords because they are perceived as rich and the general population does not care about them; however, if they do pass this then there will be some unintended consequences that could affect the schools in a major way.
I know you are probably scratching your head at this point at how could the new 911 tax being put on landlords possibly affect the local school system. It’s not as complicated as it sounds and I’ll explain it. Larger apartment communities get their value primarily from how much income they produce. If the same 100-unit apartment complex has a new $9000 per year tax bill assessed to it then the income is impacted, thus dropping the value. Just how much value can a loss of $9,000 per year cost an apartment owner? Honestly quite more than you think.
Income producing properties often trade on what is referred to as CAP rates. Simply stated a CAP rate is rate of return on a real estate investment property based on the amount of income the property produces. Typically, properties that are in great locations and easy to run have lower CAP rates, meaning investors pay more for them and make lower returns whereas consequently properties with higher CAP rates typically are in not as good areas and investors take on greater risk for the potential to earn higher returns. Now that you understand what a CAP rate is you can begin to understand how this will impact our area.
Properties in Boone County trade (meaning this is what they sell for) on a CAP rate of around 7, which is on the lower side given the property here is stable and in decent areas. So, when you lower the property income by $9,000 and factor in that it should be valued on a 7 cap you are consequently lowering the value of that same property by just over $128,000. Now it may not sound like much and it certainly isn’t off setting but you have to ask yourself is it fair to steal anything from our local schools, which in reality is a large part of why our property values are what they are, in order to pay for a 911 system that you knew 20 years ago needed replaced and let’s not forget to mention you already have been subsidizing it for $2,000,000 a year and still continue to have a surplus budget. It’s not like the County is in a tight financial position and unable to pay for this without raising taxes yet our elected officials would rather increase fees and taxes and take money from schools, libraries and other areas that rely and depend on their revenues to thrive and succeed.
Tax payers received a victory in Boone County Kentucky recently when the county Fiscal Court decided not to pursue the insurance premium tax that it had been suggesting they would to
pay for a new 911 dispatch system. With efforts led by County Commissioner Cathy Flaig and a social media information blitz by Aaron Gillum, the county has decided to not impose it.
While this is a great victory it is now leaving the county with limited options to increase revenue and fund a new 911 system. One of the items they are going to look at is imposing a “dwellings” tax on apartment owners and their reasoning is that apartment renters tend to use more 911 services than others and this would be a fair way to generate the revenue. The amount of tax they are initially talking about is astronomical, as it’s being projected to be to the tune of $80 - $90 dollars per unit per year.
Recently Campbell County passed the same tax to the tune of $45 per apartment dwelling per year and Kenton county is looking at and getting ready to pass a similar tax of $65 dollars per unit per year. Keep in mind all these taxes are absurdly high and putting them on apartment owners because renters “use more 911” services is a crock but let’s assume they do how could Boone County be potentially projecting something that is double than that Campbell County has already passed?
The problem is they don’t exactly know what the system is going to fully cost, or at least that is what they claim, yet when they originally, we’re wanting to put the insurance tax in place they we’re building in a surplus budget for other county capital projects. So, if they knew they we’re wanting a surplus budget for other capital projects then surely, they must know what the system is going to cost right?
So now that the insurance tax is defeated the county will turn to what the public presumes to be “rich landlords” to fund the system because who cares about apartment owners! They will attempt to put it on the backs of landlords on top of all the other taxes and fees we already pay in hopes to pass it through, build up their capital budget and move on. The problem is the apartment owners will not take this lightly and will not just pay the cost and be happy. Ultimately what will happen is this will be passed down to the renters themselves who live in the apartments and push their rents up. A lot of renters, not all but a lot, are on fixed incomes or live pay check to pay check so all this is going to do is increase their already strained living budgets.
So now you have to pose the question, are the county leaders and the ones fighting to end these taxes only looking out for those residents and voters who are property owners or are they looking out for the rights of ALL voters, including those who rent because if this new Dwellings tax is passed and these fees imposed all they did was shift the burden of responsibility of this new 911 system from property owners to renters, and last time I checked renters are citizens too and they have a vote just like everyone one else. It seems to be the real solution would be for the county to be more responsible with this, figure out what is needed for it and maybe do a little better with the money already coming in and then decide a fair and balanced way to spread the cost to its citizenry and businesses