In New Mexico, a state statute provides that residential property taxes cannot be raised more than 3% per year, unless the home is sold, in which case the next property tax assessment can be for the home’s full value.
This means that when a home is sold, the buyers can be subjected to a sharp increase in the property tax, i.e. they get struck by “tax lightning.” It also means that if a home has been sold recently, then the property tax on that home can be much higher than neighboring homes that have not changed hands over the years. This perceived unfairness attracted a legal challenge to the statute.
Yesterday, in Zhao v. Montoya, the New Mexico Supreme Court upheld the statute in an opinion by Justice Petra Jimenez Maes. For more on this decision, read this report by Dan McKay in the Albuquerque Journal.
