BUYERS FACE 'THE LINE' DILEMMA Some builders call savings in Pa. small


To many homebuyers, the Mason-Dixon line is a magi gateway to a world of cheaper homes and lower taxes.

When you cross into Pennsylvania from Carroll County, the price of homes drops. Take, for example, the same three-bedroom house built by the same builder on the same size land:

The house is $96,500 in Colonial Acres in Hanover, Pa., but $112,000 in The Fields at Hampstead in Carroll County.

Some Realtors and builders, however, say the savings are far less than they appear: Taxes are not as low as they seem. In addition, commuters from nearby Baltimore find the added distance makes commuting a chore.

And, the prices don't drop so precipitously at the border.

"Prices do not drop off suddenly as you cross the state line," said Hank Johnson of Long and Foster Realtors in Westminster. "It's not like when a diver steps off the continental shelf."

Developers and real estate agents say lower land prices in Pennsylvania are the main reason for the cheaper new homes.

"That probably sounds pretty simple, but it is pretty simple," said O'Conor, Piper and Flynn agent and developer Ron Carter "The average selling price of a [half-acre] lot in Carroll County is $50,000, and Pennsylvania lots are around $30,000. To expand on that further, a house in Maryland that sells for $130,000 sells vTC for $110,000 in Pennsylvania."

Yet Martin K. P. Hill, owner of Masonry Contractors in Hampstead, maintains that government fees are to blame for higher Carroll County home costs. Colonial Acres in Hanover, Pa., and The Fields at Hampstead in Carroll County -- 15 miles apart -- are two of Mr. Hill's developments.

"In Carroll County, we're paying a $2,700 impact fee that we don't pay in Pennsylvania," he said.

County impact fees, adopted in 1989, pay for future roads, water systems and other county public projects.

Mr. Hill also said fees for water and sewer connections and plan review are higher in Carroll County.

"I'm paying a $500 [per house] charge for water and sewer hookup [in Hanover]," he said. "It's somewhere in the neighborhood of $3,500 in Hampstead.

"A lot of the add-on things that have been added in Carroll County in the past 10 years are coming into these other areas very slowly."

But Mr. Carter said that, except for the Carroll County impact fee, building costs were about the same in both areas. The developer of Shorbs Hill Estates in Pleasant Hill, Pa., Mr. Carter said he pays about $400 to $500 for building permits in either area.

He has built individual homes in Westminster and Taylorsville.

"The house is the same house," he said. "The materials are the same, the labor is the same. The savings is definitely in the land."

Homebuyers are not likely to get a break on their taxes, either.

"Although people say the taxes are lower, when they get there, people have found out that's not true at all," said Dottie Wells, manager of O'Conor, Piper and Flynn's Westminster office.

One of her agents, who pays about $2,000 in taxes on his home in Pennsylvania, is convinced his Carroll County taxes would only be $1,200, she said.

"[Lower taxes] is the perception," Ms. Wells said. "But once people get up there, they find it's not factual."

Much of the confusion on comparing taxes in the two states is the difference in the Pennsylvania tax structure, Mr. Johnson said.

"In Carroll County, the taxes are all grouped together," he said. "In Pennsylvania, they are split between property taxes, school taxes and, in some odd occasions, professional taxes."

Professional taxes are based on what the resident does for a living, Mr. Johnson said.

"To me, it sounds like an early run at a progressive income tax," he said. "It's not very large, but it does complicate the picture somewhat."

And the illusion of vastly cheaper prices is perpetuated by the common practice of listing properties by ZIP code name rather than community, Mr. Johnson said.

"Something might be listed as Hanover, but you don't know if it's this side of Hanover or the farthest part of the ZIP code," he said.

People looking through ads usually notice that the Pennsylvania homes are much cheaper than similar properties in Carroll County, Mr. Johnson said. However, they don't realize how far into Pennsylvania the home is located.

"It gives the illusion that when you go over the line, homes are reduced by an act of legislature," he said.

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