The Ocoee Region Builders Association has asked the Bradley County Commission to grant a tax deferment for undeveloped lots.
ORBA president Lake Mantooth brought the association’s request to the Commission during its work session Monday.
Before being divided into plats the land to be developed is usually in the greenbelt tax range.
“The tax increase of not being in the Greenbelt is a 700 percent increase,” Mantooth said.
This increase comes when the land is platted, not when actual construction begins.
Annual taxes on undeveloped property are becoming prohibitive to development, according to builders.
“With no changes we may be looking at cutting the number of lots being developed this year because of tax liability,” Mantooth said.
Fourth District Commissioner Jeff Yarber said he would like the Commission to consider what could be done.
The Commission will form an ad hoc committee to consider the issue, upon the recommendation of Commission Chairman Louie Alford. Alford said he would like three commissioners, Mantooth, the county assessor of property and the county attorney to serve on the committee. The commissioners to be appointed to the committee were not discussed.
Under the proposed deferment, the tax rate would not change from the greenbelt tax rate until the plats were sold. This new tax rate would then be paid by the buyer.
Fourth District Commissioner Charlotte Peak-Jones, former president of ORBA, said one local builder will plan how many lots he develops based on whether the deferment is granted.
“He can develop up to 50 at this point, but is only considering 30 because as soon as he goes to plat — not when it’s sold or not when we begin development ... we immediately start paying a new tax on those lots,” Jones said.
Mantooth said he felt the deferment could be granted without creating more work for county administrators.
Builders emphasized the investments they make in the community. To develop the first phase of a subdivision, Mantooth invested $785,00 to develop 45 lots. Builders also invest in developing infrastructure and providing jobs in the community by hiring subcontractors.
Jones emphasized local developers invest the money for infrastructure, such as utilities, without any investment by the county or city. After the development is complete, it is turned over to the city or the county.
“So they benefit from all the customers in that subdivision, and they benefit from everything we put into it,” Jones said.
As the county continues to grow, there will also be a growing need for new houses, Jones said.
“Builders are hesitating,” Jones said. “There hasn’t been a new development in Bradley County in two or three years.”
A similar limited deferment was granted in the past to nonprofit Habitat for Humanity. That deferment was limited to only apply for 18 months for undeveloped land.
Bradley County Assessor of Property Stanley Thompson said he had discussions in the past with ORBA members about what could be done.
Third District Commissioner Jeff Morelock asked if this was something which needs to be addressed at a state level. Thompson said yes.
“We’ve been told it’s not a state issue,” Mantooth said.
Discussions with those at the state level have suggested that a county could develop a pilot program to address this, according to Mantooth. The issue has been on the legislative agenda in the past, but has always been delayed until the next session.
Mantooth said in this economy taxes are a big consideration.