At what point in the purchase of a house can we say that we’re really homeowners? For a select few, they might claim it’s when they purchase the house, since they pay cash. From that point on, it’s theirs, right? For others, they’d claim it’s when they’ve finally paid off their mortgage. For them, that’s really the point when they actually own the house, right? For a few disillusioned folks, they’d claim that they’re homeowners even as they’re paying the bank for the house they live in. Of course, missing a few payments can be a reality to bear, as the banks exercise who actually owns the house.
In some cases the bank even tries to take a home that’s bought and paid for. Bank of America has become notorious for this, having repossessed Charlie and Maria Cardoso’s house in 2010, five years after they paid cash for it. In 2009 Warren and Maureen Nyerges paid cash for a home in Naples. A few months later Bank of America foreclosed on them as well, resulting in a drawn-out battle for reimbursement. In that particular case, a countersuit resulted in the couple receiving court permission to seize some of Bank of America’s assets.
But even in these cases, do the people who paid cash outright, or paid off their loans, really own the house? Or do they simply purchase the privilege of living there — a privilege they can sell to others? The answer to that question lies in the answer to this one: “What happens if you fail to pay property taxes?” With this in mind, are we really owners, or do we simply own the right to rent that particular parcel from the local government?
For most of us, this isn’t that big of a deal. We figure the property taxes into our costs as we approach the purchase of a house. However, in recent years the challenges faced in paying taxes have come to the fore. Some have experienced reduced income, making it more of a hardship to keep up with property taxes. For others, their houses have depreciated in value to the point that the taxes reflect property values they may not see again for many years, if ever.
But what about the truly poor? What about the man who’s doing all he can to feed his family, but can’t possibly keep up with property taxes? Perhaps he inherited the house from his parents. Does he really own that house? According to current property tax laws, the reality comes down to who keeps it if the taxes aren’t paid. And, unfortunately, the state rarely cares about the value of the house when they seize it for failure to pay property tax. All they care about is getting their back taxes. In fact, such draconian practices have led to a cottage industry in buying tax seizures.
Apparently some North Dakota residents have reached the end of the rope when it comes to renting their homes from the local governments. As a result Measure 2 was brought to the ballots this past Tuesday, offering voters an opportunity to become the only Americans to truly own the houses they’ve paid for.
So, what happened? As Benjamin Franklin stated, “Those who would give up essential liberty to purchase a little temporary safety, deserve neither liberty nor safety” (Historical Review of Pennsylvania, 1759). Apparently the voters of North Dakota perceived greater safety in continuing to be tenants of the state than in being free to own houses outright. Of course, local politicians used tax revenues to fight this effort vigorously. Who can blame them? After all, if it passed, who would pay them to collect taxes?
At least we can hold gold without getting taxed on it … for now.
J. Keith Johnson’s Austrian and libertarian perspectives on current socioeconomic and geopolitical affairs are fueled by his insatiable desire to both discover and share the truth. A Goldco Direct affiliate, you’ll find his commentary on The Gold Informant website, as well as various Internet financial and news sites.