Homebuilders struggle to pay tax bills
Posted December 30, 2008 12:20 p.m. EST
Updated March 9, 2009 5:11 p.m. EDT
Raleigh, N.C. — Homebuilders struggling with a slow housing market have turned to Wake County for help with their annual property tax bills.
The developers still hold title to scores of homes and lots they had planned to sell this year, making them liable for property tax bills that are due next week.
Through November, 12,964 homes sold in Wake County, down from the 21,271 that sold in 2007, according to county figures. In November alone, home sales dropped by two-thirds, to 549 from 1,675 a year ago, county figures show.
"This year, we're off about 20 to 30 percent (on sales)," said Brad Greene, owner of HomeQuest Builders in Raleigh.
In a good year, Greene said, his company builds and sells nearly 30 homes. Because those numbers were down this year, he's stuck with a bigger-than-expected tax bill.
"This is coming at a bad time – it's tax time, and the (housing) market's down. Cash flow is a problem for everyone when the market is as slow as it is," he said.
The Wake County Revenue Department is cutting developers some slack on their bills.
"It seems like developers and contractors are having cash-flow issues," Revenue Director Marcus Kinrade said. "They're having a hard time selling their real estate, and as a consequence, they can't pay their staff, nor can they pay their property tax bills.
"I've been receiving calls every day from developers and contractors."
Kinrade said his department has set up payment plans for about 25 developers to spread their tax payments over several months. The department has set up similar plans with about 400 other taxpayers who cannot pay their bills in one lump sum next week.
"If anyone knows they can't pay their bill in full, I would ask them to call now so we can work with them," he said.
Suzanne Harris, the vice president for government affairs of the Home Builders Association of Raleigh-Wake County, said the compromise could help developers stay afloat until the housing market rebounds.
"There's a lot of hope out there that we've had the worst of it," Harris said. "People will still feel some pain for a while, but the hope is that they'll start feeling the upswing soon."
Greene agrees, saying he thinks the market has bottomed out.
"The positive thing is there are people out there looking for homes. Interest rates are low. Prices are great. This is a great time to buy a home," he said.