Owner Occupant vs. Non-Owner Occupant Property Taxes on Residential Property

6 Replies

My in-laws inherited a property in West Virginia.  In a soft market they decided to rent it instead of selling.  When the taxman found out that it was a rental the property taxes almost doubled.

What is the political calculus behind this?  Is this a "tax the rich" mentality?  How is this consistent in red counties/states?

Does anyone know which states and counties do this?  Does it happen in your state?

I can't any list with a state by state policy.  It would be an interesting list for out-of-state investors as well as these tax codes are effectively discouraging investment.

I can't say whether this happens in every county or city but this happens in every city I have owned property and I suspect it happens everywhere. The taxing authorities do it because they can. Since non residents cannot vote it is not very difficult to pass these laws. Everyone seems happy to tax the other guy. It is, essentially, taxation without representation but that is life in the land of the free.

@William Hochstedler  did it have a homestead exemption for seniors that expired? I own several properties here in WV and the property taxes are the same as if it were my primary residence. 

Maryland is the same way ,in my county  personal residence gets homestead tax credit , and subject to a cap based on inflation . This doesnt apply to rentals 

@Jeremy Shepherd  

It did have the homestead exemption which was removed.  But I was under the impression that it I think it was reclassified 4 years later and the taxes were bumped again.

I'll double check on that.

Thanks for the clarification.

In case any one is interested, I just read some of the tax notice paperwork.

State Code (§11-8-5) Classification of property for levy purposes is as follows:

Class II; All property owned, used and occupied by the owner exclusively for

residential purposes.

Class III; All property exclusive of Class II.

In WV, they tax residential rental properties as commercial.  This is not the case in Utah.  It's as @Jeff Rabinowitz says; they do it because they can.

Certainly something to pay attention to in out-of-area due diligence.  It would have gotten me buying from an owner occupant.


Is there anyone out there from MO who is familiar with the laws regarding property tax rate difference between owner occupied vs investment property, I am new investor looking for information so I can factor that in my numbers when buying investment property. Thanks in advance. 

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