New tax values zap older homeowners

Some fear they can't afford the taxes they'll have to pay to stay in their homes

Wayne and Mary Taylor have a million-dollar problem with their house.

The Taylors' rambling home in Raleigh's Cameron Park neighborhood, bought for $28,000 in 1968, recently got a tax assessment from Wake County of $1,050,150.

Like many older residents of the Triangle's sought-after traditional neighborhoods, the Taylors don't consider a sky-high evaluation to be good news, signaling a windfall if they sell. For some homeowners who want to stay put, it means a stressfully high tax bill.

"I want to live here," said Wayne Taylor, 76, a professor emeritus in the design school at N.C. State University. "The process is all out of whack."

People such as the Taylors say they're paying for their foresighted move into neighborhoods that were affordable in the 1960s and '70s and, because of their historic value and proximity to downtown, are eagerly sought and comparatively high-priced. The Taylors' $28,000 purchase price would equate to about $168,000 in 2007 dollars.

The situation affects older and disabled homeowners in vacation areas on the coast and in the mountains, state revenue officials say. It's also occurring in hot neighborhoods in Raleigh and Durham, where property was reassessed this year; Orange County's turn comes next year.

"We have a significant amount of our population that has been in their homes for 25 to 30 years and have seen huge appreciation in their homes over that entire period," said Ken Joyner, tax administrator for Durham County.

A state homestead exemption law has helped ease the tax burden for more than 4,000 Triangle homeowners older than 65 or with disabilities, but it has an income cap. Until August, it applied to households that made $20,500 a year or less. The legislature increased the cap, to $25,000 for the 2008 tax year, with more increases likely.

$16.5 million change

That change will make nearly 37,000 homeowners eligible statewide for the break and cost cities and counties about $16.5 million in 2008 revenue they otherwise would have reaped, according to state revenue figures. In Wake County, tax officials expect to give the tax break to an additional 1,000 older or disabled residents next year.

"There are definitely some inside the Beltline," said Emmett Curl, Wake County revenue director.

Still, advocates for older people said, that's hardly enough to reach all older people whose homes may now seem like more of a liability than an asset.

"If you have two people who are each making $18,000, you are just out of luck," said Bill Wilson, an associate state director for AARP.

Tax officials say periodic revaluations make sure that all property owners pay their share for services, based on what their homes are worth.

As home prices in trendy neighborhoods have climbed, the mix of residents has changed. When the Taylors moved to Cameron Park, the area's appeal rested on a mix of older people, young families, renters and students, said Mary Taylor, 78, who retired from Legal Services in 1994. Many were affiliated with N.C. State or held government jobs downtown.

"It was wholesome," she said. "It was lively -- the typical neighborhood that people dream about."

Newer Cameron Park residents are nice people with an interest in the neighborhood, Mary Taylor said, but often have higher incomes and a different lifestyle from many longtime residents.

The Taylors' home -- more than 4,700 square feet on less than a half acre -- was last assessed at $404,000 in 2004, producing their current tax bill of $4,523. That's more money than Wayne Taylor's salary when he started at N.C. State.