Author Topic: Property Taxes Killing Me  (Read 45179 times)

nobodyspecial

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Re: Property Taxes Killing Me
« Reply #100 on: October 03, 2016, 08:57:10 PM »
They do it this way so that taxes do not wildly fluctuate with property prices and taxes per house do not relatively change too much either. At least at the moment, WA is a gold mine for engineers and other middle-high income earners.

So much so that we might have to build a wall.
http://www.nytimes.com/2016/10/03/technology/next-big-tech-corridor-between-seattle-and-vancouver-planners-hope.html

Radagast

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Re: Property Taxes Killing Me
« Reply #101 on: October 03, 2016, 11:59:21 PM »
Wow, so am I (are we) the low tax champions of the forum?
State/local income tax: 0
Federal income tax on 90k: net -.5%
FICA: same as everyone
Sales tax: 7.1% but not on groceries, our biggest expense
Property tax on $210k home: $768/y

Probably not, but maybe among employed homeowners! Knowing in theory that taxes are generally higher elsewhere is apparently different from seeing it demonstrated.

Paul der Krake

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Re: Property Taxes Killing Me
« Reply #102 on: October 04, 2016, 03:40:38 AM »
Wow, so am I (are we) the low tax champions of the forum?
State/local income tax: 0
Federal income tax on 90k: net -.5%
FICA: same as everyone
Sales tax: 7.1% but not on groceries, our biggest expense
Property tax on $210k home: $768/y

Probably not, but maybe among employed homeowners! Knowing in theory that taxes are generally higher elsewhere is apparently different from seeing it demonstrated.
Nice. Let me guess, rural WA, two 401(k)s, two traditional IRAs, a couple kids?

MrRealEstate

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Re: Property Taxes Killing Me
« Reply #103 on: October 04, 2016, 04:02:43 AM »
    DA, those numbers are horrifying.  Basically you could rent a modest apartment in many fairly desirable locations in southern Europe for the same price as your monthly property tax.  Btw, if California had not passed Prop. 13 in 1978, I have no doubt that we'd have many similar stories.  (not that its a perfect law by any means, but its saved countless homeowners from massive property tax increases).

But doesn't this just shift the tax burden on the younger generation/new buyers?
Yep, prop 13 really distorts things in unfair ways.  Neighbors with identical houses can pay drastically different taxes for identical services.  The money has to come from somewhere, so the new arrivals and young folks get the shaft.  Somehow you'd think that would run afoul of the equal protection clause, but apparently it does so only by the spirit of the law.

Here in Oregon we have a somewhat more sane system.  The taxes don't reset after a sale, so only new houses get the full brunt of full property taxes in a hot market rather than just new buyers (property taxes for the prior year are listed in the adverts).  Our 35 year old house is assessed at about 80% of fair market value for property taxes, so the relative disparity is much less than California.

On the downside Oregon has much less progressive income tax, only the first $5k is taxes at the lower 5%, the rest is 9% (9.9% for very high earners).  I'll pay 1/4 the state income taxes if I retire to California instead of Oregon, but properly taxes might make up for the delta.

On the whole I don't mind paying my fair share of taxes, I just wish the system we had was more uniform and progressive.

Sounds like I'm in the minority in support of 13.

I figured an early retirement blog would really be in favor since it prevents your property taxes from exploding in a bubble. I'm part of the "younger" generation and would prefer to have my property tax set when I buy my house rather than see what happens in the future. Seems comparable to the certainty of a fixed rate mortgage vs. an ARM.

Enigma

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Re: Property Taxes Killing Me
« Reply #104 on: October 04, 2016, 05:36:38 AM »
My investment property in Tennessee averages 2.3k in YEARLY taxes (county & city) per 125k

Nate R

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Re: Property Taxes Killing Me
« Reply #105 on: October 04, 2016, 07:55:57 AM »
    DA, those numbers are horrifying.  Basically you could rent a modest apartment in many fairly desirable locations in southern Europe for the same price as your monthly property tax.  Btw, if California had not passed Prop. 13 in 1978, I have no doubt that we'd have many similar stories.  (not that its a perfect law by any means, but its saved countless homeowners from massive property tax increases).

But doesn't this just shift the tax burden on the younger generation/new buyers?
Yep, prop 13 really distorts things in unfair ways.  Neighbors with identical houses can pay drastically different taxes for identical services.  The money has to come from somewhere, so the new arrivals and young folks get the shaft.  Somehow you'd think that would run afoul of the equal protection clause, but apparently it does so only by the spirit of the law.

Here in Oregon we have a somewhat more sane system.  The taxes don't reset after a sale, so only new houses get the full brunt of full property taxes in a hot market rather than just new buyers (property taxes for the prior year are listed in the adverts).  Our 35 year old house is assessed at about 80% of fair market value for property taxes, so the relative disparity is much less than California.

On the downside Oregon has much less progressive income tax, only the first $5k is taxes at the lower 5%, the rest is 9% (9.9% for very high earners).  I'll pay 1/4 the state income taxes if I retire to California instead of Oregon, but properly taxes might make up for the delta.

On the whole I don't mind paying my fair share of taxes, I just wish the system we had was more uniform and progressive.

Sounds like I'm in the minority in support of 13.

I figured an early retirement blog would really be in favor since it prevents your property taxes from exploding in a bubble. I'm part of the "younger" generation and would prefer to have my property tax set when I buy my house rather than see what happens in the future. Seems comparable to the certainty of a fixed rate mortgage vs. an ARM.

If there's a bubble, all housing values rise, so your taxes would stay the same.  In my municipality,  it's the levy divided by the total assessments.  So if ALL values rise 10%, my taxes remain the same.

Radagast

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Re: Property Taxes Killing Me
« Reply #106 on: October 04, 2016, 08:33:10 AM »
Wow, so am I (are we) the low tax champions of the forum?
State/local income tax: 0
Federal income tax on 90k: net -.5%
FICA: same as everyone
Sales tax: 7.1% but not on groceries, our biggest expense
Property tax on $210k home: $768/y

Probably not, but maybe among employed homeowners! Knowing in theory that taxes are generally higher elsewhere is apparently different from seeing it demonstrated.
Nice. Let me guess, rural WA, two 401(k)s, two traditional IRAs, a couple kids?
Nevada, no kids, one simple and two trad IRA's, HSA. Wife is in a community college for a $1,500 American Opportunity tax credit :).
« Last Edit: October 04, 2016, 10:15:46 AM by Radagast »

Jack

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Re: Property Taxes Killing Me
« Reply #107 on: October 04, 2016, 08:57:18 AM »
They do it this way so that taxes do not wildly fluctuate with property prices and taxes per house do not relatively change too much either. At least at the moment, WA is a gold mine for engineers and other middle-high income earners.

So much so that we might have to build a wall.
http://www.nytimes.com/2016/10/03/technology/next-big-tech-corridor-between-seattle-and-vancouver-planners-hope.html

FYI for anyone as confused as I was: FIPurpose lives in Vancouver, WA (across the river from Portland, OR). The article is about Seattle and Vancouver, Canada. For a minute there I thought somebody was proposing building a tech corridor through Olympia etc.

JLee

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Re: Property Taxes Killing Me
« Reply #108 on: October 04, 2016, 09:08:10 AM »
Wow. We pay just over 4k/annum for TWO properties per year and I was thinking it was a little much. What do your states do with the money?

In NJ's case, they run duplicates of basically every government function.

http://www.njspotlight.com/stories/15/03/02/explainer-why-property-taxes-are-so-high-and-why-reform-efforts-fall-short/

Quote
The state has 565 separate municipalities and even more school districts, nearly all of them led by their own administrators and support staff – who are often doing similar jobs in very close proximity.

JustGettingStarted1980

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Re: Property Taxes Killing Me
« Reply #109 on: October 04, 2016, 09:21:19 AM »
In response to that comment about NJ duplication of services... this really resonates with me. Where I live there are >100 different municipalities in our county. This all stems from when these municipalities were originally created >100 years ago. Thus, every community has there own police offices, firemen, parks people, mayors and councilmen.

I find this ridiculous. My guess is that in some of the "newer" communities in the southwest, the square mileage of the towns are probably a lot bigger, and there is a lot less duplication of services.

There was a proposal to consolidate alot of these municipalities a few years ago into own "greater city", and thus share all the resources and reduce inefficiencies. Every single local community czar screamed blood murder about loss of control, reduction in services, poor response to homeowner complaints, etc....  Now I wonder why local elected leaders didn't want to lose their jobs?

Anyone here from Louisville, KY? I know they did the consolidation thing, how did it turn out?

mm1970

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Re: Property Taxes Killing Me
« Reply #110 on: October 04, 2016, 09:32:34 AM »
    DA, those numbers are horrifying.  Basically you could rent a modest apartment in many fairly desirable locations in southern Europe for the same price as your monthly property tax.  Btw, if California had not passed Prop. 13 in 1978, I have no doubt that we'd have many similar stories.  (not that its a perfect law by any means, but its saved countless homeowners from massive property tax increases).

But doesn't this just shift the tax burden on the younger generation/new buyers?
Yep, prop 13 really distorts things in unfair ways.  Neighbors with identical houses can pay drastically different taxes for identical services.  The money has to come from somewhere, so the new arrivals and young folks get the shaft.  Somehow you'd think that would run afoul of the equal protection clause, but apparently it does so only by the spirit of the law.

Here in Oregon we have a somewhat more sane system.  The taxes don't reset after a sale, so only new houses get the full brunt of full property taxes in a hot market rather than just new buyers (property taxes for the prior year are listed in the adverts).  Our 35 year old house is assessed at about 80% of fair market value for property taxes, so the relative disparity is much less than California.

On the downside Oregon has much less progressive income tax, only the first $5k is taxes at the lower 5%, the rest is 9% (9.9% for very high earners).  I'll pay 1/4 the state income taxes if I retire to California instead of Oregon, but properly taxes might make up for the delta.

On the whole I don't mind paying my fair share of taxes, I just wish the system we had was more uniform and progressive.

Sounds like I'm in the minority in support of 13.

I figured an early retirement blog would really be in favor since it prevents your property taxes from exploding in a bubble. I'm part of the "younger" generation and would prefer to have my property tax set when I buy my house rather than see what happens in the future. Seems comparable to the certainty of a fixed rate mortgage vs. an ARM.

I'm torn, as a Californian.

I think originally it was intended to prevent the elderly from being priced out of their homes.  I don't necessarily think that's a bad thing.  When you are on a fixed income, taxes can easily start to eat up what you need to live on.  (My husband is from NY state, and houses in his home town are CHEAP but taxes are not.  I've done some back of the envelop math, and taxes would make being a real estate investor difficult.)

So, that's a positive thing - a limit on the increase of taxes.

On the other hand, there are negatives.

In my area, you will have two houses right next to each other with vastly different taxes.  I will give an example of two friends who are next door neighbors. Same size houses, both currently worth about $1.2M.

House #1, taxes in 2006 (peak, which is when they bought the house): $12,000.  Taxes now (because the county / city reassessed): $8000.
House #2, taxes in 2006: $918.  Taxes now: $1149.

Uhhh...that's a big difference.  And it really REALLY hurts the schools.  I just had a conversation with the old guys at the gym this morning, about how their "property taxes are outrageous and they are voting against the school bonds."  I said "that's nice, do you realize the state of the schools?  Backed up plumbing, leaking roofs, deteriorating portables, broken windows, etc."  As expected, when schools get old, things break.  But maybe a guy whose "outrageous" property taxes at $3500 a year doesn't want to pay an additional $400 because his kids are grown - and the state of his grandkids schools?  Eh, who cares.

(Not to say that there shouldn't be transparency in budgets and how money is spent, both on infrastructure, administrative salaries, etc.  There should be.)

robartsd

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Re: Property Taxes Killing Me
« Reply #111 on: October 04, 2016, 09:41:37 AM »
Sounds like I'm in the minority in support of 13.

I figured an early retirement blog would really be in favor since it prevents your property taxes from exploding in a bubble. I'm part of the "younger" generation and would prefer to have my property tax set when I buy my house rather than see what happens in the future. Seems comparable to the certainty of a fixed rate mortgage vs. an ARM.
I've taken the same attitude toward Prop 13. I think there are more problems with it in areas with the highest property values than there are in moderately priced markets.

MasterStache

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Re: Property Taxes Killing Me
« Reply #112 on: October 04, 2016, 10:26:35 AM »
Yep we live in a HCOL area. Nearly half of our mortgage is property tax. However, we have two kids in school currently and it's one of the top school districts in our area and top 20 in the state. We sold our last house, in the same school district, for asking price because the family was so eager to get their kids into the schools.

We were lucky to find a cheap fixer upper and not have to change school districts. Our home value has skyrocketed. Funny thing is we could literally move 5 miles down the road to a different school district and pay roughly half in property taxes than what we do now and find the same size house for much cheaper. That's our plan when the kids are done with school and we FIRE.

 

DA

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Re: Property Taxes Killing Me
« Reply #113 on: October 04, 2016, 11:41:59 AM »
According to ITEP’s Tax Inequality Index, Washington has the most unfair state and local tax system in the country.

That's not really a surprise, though.  Income taxes take most of their money from rich people, but Washington has no state income tax.  Sales taxes take most of their money from poor people, and Washington has high sales taxes.  The property taxes here are about a wash.

States are going to get their revenue from some combination of those three sources.  If you are paying high property taxes then you are probably paying less income and sales tax.  I'm not sure it makes sense to complain too much about any one of those without also considering the other two.

Your analysis is incorrect.  Higher-income individuals pay more in sales tax than do lower-income individuals (on average) because people that make more money spend more money.  The same is true of property taxes--higher-income people live in more expensive dwellings that incur higher property taxes compared to their lower-income brethren (again, on average).  What ITEP was likely referring to was the fact that sales taxes are "regressive," which means that poorer people pay a higher percentage of their income than richer people. 

Lost in this debate is the fact that businesses pay a lot of sales tax (though they shouldn't, technically, because it is supposed to fall upon consumers) and also pay a lot of property taxes.  Businesses in Washington also pay the B&O Tax, a tax on their gross receipts (levied without respect to profits).  We're not really sure who bears the burden of these taxes paid by businesses; is it the (wealthy) owners, the employees in the form of lower wages, or the consumers in the form of higher prices?  We can't say for sure. 

But we do know for sure that people who earn more definitely pay more income*, sales, and property taxes, although these will typically represent a small proportion of their overall earnings.  If you compare someone in the bottom 10% of earnings to someone in the top 10% of earnings, the top 10-percenter will pay way more in taxes 99% of the time, especially after you factor in transfer payments. 

*I know WA doesn't have a personal income tax, but most states do, and this is a generally applicable statement.

Papa Mustache

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Re: Property Taxes Killing Me
« Reply #114 on: October 04, 2016, 11:47:39 AM »
My property taxes are around $550/month.  It doesn't bother me because we have great schools and services.  Great schools are very important to me, and not just for my own kids.

Our total annual property taxes are ~$750 for a ~2000 sq ft house at the edge of town near a school built a few years ago. In flyover country. Our house payment is about ~$900.

I don't see how you good people make ends meet.

sol

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Re: Property Taxes Killing Me
« Reply #115 on: October 04, 2016, 11:52:46 AM »
I don't see how you good people make ends meet.

With ridiculously high incomes, made possible by all of those high taxes.  Would you take a 100% increase in your tax burden of it came with a 100% increase in your income?  I certainly would, gladly.

Northwestie

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Re: Property Taxes Killing Me
« Reply #116 on: October 04, 2016, 01:03:54 PM »
My property taxes are around $550/month.  It doesn't bother me because we have great schools and services.  Great schools are very important to me, and not just for my own kids.

Our total annual property taxes are ~$750 for a ~2000 sq ft house at the edge of town near a school built a few years ago. In flyover country. Our house payment is about ~$900.

I don't see how you good people make ends meet.

Likewise, I could never live where the topography is flatter than piss on a plate. :)

JLee

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Re: Property Taxes Killing Me
« Reply #117 on: October 04, 2016, 01:14:32 PM »
My property taxes are around $550/month.  It doesn't bother me because we have great schools and services.  Great schools are very important to me, and not just for my own kids.

Our total annual property taxes are ~$750 for a ~2000 sq ft house at the edge of town near a school built a few years ago. In flyover country. Our house payment is about ~$900.

I don't see how you good people make ends meet.

Likewise, I could never live where the topography is flatter than piss on a plate. :)

My property taxes in AZ are similar, and AZ is not flat.  There are other options.

The money near NYC is much better, though....so here I am.

Mississippi Mudstache

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Re: Property Taxes Killing Me
« Reply #118 on: October 04, 2016, 01:18:19 PM »
Northeastern Ohio here. Have mid-century 1165 sq. ft. flat ranch on 2/3 acre in wonderful location facing walking trails and golf courses of huge Metropark.  Nearby Interstate to take me to major airports or anywhere else I want to go.  Property taxes yearly are $2265. Ohio income tax yearly is $560. This location is a best-kept secret, no question.

Central Ohio not so much.  Top neighborhoods/schools in Columbus put you easily over 2% of property value. I'm about 2.3% in northwest Columbus or about $8600 per year.  Cheap property tax neighborhoods put you in "ghettoish" schools.  Friends with many teachers. A couple close to my family teaches in the ghettoish schools and moved to my neighborhood.  They know from first hand experience that paying for school district is not the fallacy that some of the earlier posters suggested.

Interesting perspective. I'm currently looking at homes, and the tax rates tend to be inversely correlated with the quality of the schools in the areas where we're looking. The one of the best school districts in the state has the lowest tax rates in the area, because homes are so expensive that the county is easily funded on a smaller percentage (<1%). On the other hand, if you go next door to a county with an average school system, the tax rate is ~1.5%, but the homes are less than half as expensive, so they don't get as much money for a comparable property even with the higher rates.

Northwestie

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Re: Property Taxes Killing Me
« Reply #119 on: October 04, 2016, 01:32:59 PM »
My property taxes are around $550/month.  It doesn't bother me because we have great schools and services.  Great schools are very important to me, and not just for my own kids.

Our total annual property taxes are ~$750 for a ~2000 sq ft house at the edge of town near a school built a few years ago. In flyover country. Our house payment is about ~$900.

I don't see how you good people make ends meet.

Likewise, I could never live where the topography is flatter than piss on a plate. :)

My property taxes in AZ are similar, and AZ is not flat.  There are other options.

The money near NYC is much better, though....so here I am.

Everyone has priorities - Seattle for me (for now) and access to great climbing, backcountry skiing, mt. biking, sea kayaking, and hiking is good.  Taxes not so bad.  The density of the city certainly is not going down.

Was in Tucson recently - nice town and great hiking. But no snow!

JLee

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Re: Property Taxes Killing Me
« Reply #120 on: October 04, 2016, 01:36:57 PM »
My property taxes are around $550/month.  It doesn't bother me because we have great schools and services.  Great schools are very important to me, and not just for my own kids.

Our total annual property taxes are ~$750 for a ~2000 sq ft house at the edge of town near a school built a few years ago. In flyover country. Our house payment is about ~$900.

I don't see how you good people make ends meet.

Likewise, I could never live where the topography is flatter than piss on a plate. :)

My property taxes in AZ are similar, and AZ is not flat.  There are other options.

The money near NYC is much better, though....so here I am.

Everyone has priorities - Seattle for me (for now) and access to great climbing, backcountry skiing, mt. biking, sea kayaking, and hiking is good.  Taxes not so bad.  The density of the city certainly is not going down.

Was in Tucson recently - nice town and great hiking. But no snow!
Not in Tucson, but ~40 miles away: http://www.skithelemmon.com/

;)

Northwestie

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Re: Property Taxes Killing Me
« Reply #121 on: October 04, 2016, 01:58:41 PM »
Looks cool.  I've rock climbed at Lemon, haven't been there in winter.

infogoon

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Re: Property Taxes Killing Me
« Reply #122 on: October 04, 2016, 02:51:25 PM »
I think it's just people that haven't lived many places.  If they did, they would realize there are lots of places with low taxes and good schools, and places with high taxes and terrible schools. 

I live in one of the poorest cities in America. Our local "failing" school district is heavily subsidized by the state, and spends more per-student than any of the suburban district for far worse results. Hey, our high school graduation rate finally broke 60%! Let's throw a party!

The correlation between school district spending and performance is coincidental at best. Results are far more tightly correlated with the student's household income and parental academic achievement than anything else.

Goldielocks

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Re: Property Taxes Killing Me
« Reply #123 on: October 04, 2016, 06:16:59 PM »
    DA, those numbers are horrifying.  Basically you could rent a modest apartment in many fairly desirable locations in southern Europe for the same price as your monthly property tax.  Btw, if California had not passed Prop. 13 in 1978, I have no doubt that we'd have many similar stories.  (not that its a perfect law by any means, but its saved countless homeowners from massive property tax increases).

But doesn't this just shift the tax burden on the younger generation/new buyers?
Yep, prop 13 really distorts things in unfair ways.  Neighbors with identical houses can pay drastically different taxes for identical services.  The money has to come from somewhere, so the new arrivals and young folks get the shaft.  Somehow you'd think that would run afoul of the equal protection clause, but apparently it does so only by the spirit of the law.

Here in Oregon we have a somewhat more sane system.  The taxes don't reset after a sale, so only new houses get the full brunt of full property taxes in a hot market rather than just new buyers (property taxes for the prior year are listed in the adverts).  Our 35 year old house is assessed at about 80% of fair market value for property taxes, so the relative disparity is much less than California.

On the downside Oregon has much less progressive income tax, only the first $5k is taxes at the lower 5%, the rest is 9% (9.9% for very high earners).  I'll pay 1/4 the state income taxes if I retire to California instead of Oregon, but properly taxes might make up for the delta.

On the whole I don't mind paying my fair share of taxes, I just wish the system we had was more uniform and progressive.

Sounds like I'm in the minority in support of 13.

I figured an early retirement blog would really be in favor since it prevents your property taxes from exploding in a bubble. I'm part of the "younger" generation and would prefer to have my property tax set when I buy my house rather than see what happens in the future. Seems comparable to the certainty of a fixed rate mortgage vs. an ARM.

I'm torn, as a Californian.

I think originally it was intended to prevent the elderly from being priced out of their homes.  I don't necessarily think that's a bad thing.  When you are on a fixed income, taxes can easily start to eat up what you need to live on.  (My husband is from NY state, and houses in his home town are CHEAP but taxes are not.  I've done some back of the envelop math, and taxes would make being a real estate investor difficult.)

So, that's a positive thing - a limit on the increase of taxes.

On the other hand, there are negatives.

In my area, you will have two houses right next to each other with vastly different taxes.  I will give an example of two friends who are next door neighbors. Same size houses, both currently worth about $1.2M.

House #1, taxes in 2006 (peak, which is when they bought the house): $12,000.  Taxes now (because the county / city reassessed): $8000.
House #2, taxes in 2006: $918.  Taxes now: $1149.

Uhhh...that's a big difference.  And it really REALLY hurts the schools.  I just had a conversation with the old guys at the gym this morning, about how their "property taxes are outrageous and they are voting against the school bonds."  I said "that's nice, do you realize the state of the schools?  Backed up plumbing, leaking roofs, deteriorating portables, broken windows, etc."  As expected, when schools get old, things break.  But maybe a guy whose "outrageous" property taxes at $3500 a year doesn't want to pay an additional $400 because his kids are grown - and the state of his grandkids schools?  Eh, who cares.

(Not to say that there shouldn't be transparency in budgets and how money is spent, both on infrastructure, administrative salaries, etc.  There should be.)
Not a fan, it is not tied in any way to CPI, or even to cost of city services, which is higher than CPI, but a fixed low number like 2%. This means that those owners pay a smaller and smaller share of the city services.  After decades, ends up with terrible tax rates for new buyers.

sol

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Re: Property Taxes Killing Me
« Reply #124 on: October 04, 2016, 06:52:19 PM »

This means that those owners pay a smaller and smaller share of the city services.  After decades, ends up with terrible tax rates for new buyers.

Exactly.  I'm also mystified as to why we spend so much money trying to "protect" the elderly from being priced out of their homes by rising taxes.  If your home is worth two million dollars, then it is worth two million dollars regardless of who owns it, or what they paid for it.  And I think it should be taxed accordingly. 

We NEED elderly people to be priced out of their homes, just like we need poor people to be priced out of gentrifying neighborhoods.  This is capitalism at work.  I think there's a strong argument to be made that the greater social good is met when resources are reallocated to most efficiently reflect their market values.

Roland of Gilead

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Re: Property Taxes Killing Me
« Reply #125 on: October 04, 2016, 07:07:17 PM »

This means that those owners pay a smaller and smaller share of the city services.  After decades, ends up with terrible tax rates for new buyers.

Exactly.  I'm also mystified as to why we spend so much money trying to "protect" the elderly from being priced out of their homes by rising taxes.  If your home is worth two million dollars, then it is worth two million dollars regardless of who owns it, or what they paid for it.  And I think it should be taxed accordingly. 

We NEED elderly people to be priced out of their homes, just like we need poor people to be priced out of gentrifying neighborhoods.  This is capitalism at work.  I think there's a strong argument to be made that the greater social good is met when resources are reallocated to most efficiently reflect their market values.

I can see your point but also understand how pissed off some people would be if they have lived in a home their entire life of 70 years only to be priced out because some dot com millionaires decided that area would be a cool place to build 12,000sq ft homes.

sol

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Re: Property Taxes Killing Me
« Reply #126 on: October 04, 2016, 07:20:23 PM »
I can see your point but also understand how pissed off some people would be if they have lived in a home their entire life of 70 years only to be priced out because some dot com millionaires decided that area would be a cool place to build 12,000sq ft homes.

Sure, that's no mystery to me.  They feel entitled to keep things the way they were, rather than as they are now.  They don't like change.  My own grandfather was priced out of his home in CA.

Some of those same people also feel that America itself has gone to hell, and rising property taxes are just another symptom.  "There are darkies at the country club now!  Men can't even keep their wives from working!"  My grandfather, in addition to being a kind and generous man, was also a raging sexist and a horrible bigot.

His solution to these parallel "problems" was to sell his expensive California home and buy an estate in rural Arkansas, where taxes are low and "people know their place".  Good riddance, Grandpa.  RIP, but the world is ready to move on without you.

dilinger

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Re: Property Taxes Killing Me
« Reply #127 on: October 04, 2016, 07:34:04 PM »

This means that those owners pay a smaller and smaller share of the city services.  After decades, ends up with terrible tax rates for new buyers.

Exactly.  I'm also mystified as to why we spend so much money trying to "protect" the elderly from being priced out of their homes by rising taxes.  If your home is worth two million dollars, then it is worth two million dollars regardless of who owns it, or what they paid for it.  And I think it should be taxed accordingly. 

We NEED elderly people to be priced out of their homes, just like we need poor people to be priced out of gentrifying neighborhoods.  This is capitalism at work.  I think there's a strong argument to be made that the greater social good is met when resources are reallocated to most efficiently reflect their market values.

I can see your point but also understand how pissed off some people would be if they have lived in a home their entire life of 70 years only to be priced out because some dot com millionaires decided that area would be a cool place to build 12,000sq ft homes.

It's just heartbreaking to imagine them wiping away those tears with the millions of dollars that they got by selling.

Paul der Krake

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Re: Property Taxes Killing Me
« Reply #128 on: October 04, 2016, 07:58:22 PM »
Homes are funny. Pretty much everyone agrees that you should pay taxes on that dirty capital gains money you made in the stock market. Home triples in value? That wasn't blind luck, it was a smart responsible decision for cleaning the gutters every Saturday. Let's find a way to make sure these hard-working hearty folks get that massive homestead exclusion.

moof

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Re: Property Taxes Killing Me
« Reply #129 on: October 04, 2016, 08:41:12 PM »
    DA, those numbers are horrifying.  Basically you could rent a modest apartment in many fairly desirable locations in southern Europe for the same price as your monthly property tax.  Btw, if California had not passed Prop. 13 in 1978, I have no doubt that we'd have many similar stories.  (not that its a perfect law by any means, but its saved countless homeowners from massive property tax increases).

But doesn't this just shift the tax burden on the younger generation/new buyers?
Yep, prop 13 really distorts things in unfair ways.  Neighbors with identical houses can pay drastically different taxes for identical services.  The money has to come from somewhere, so the new arrivals and young folks get the shaft.  Somehow you'd think that would run afoul of the equal protection clause, but apparently it does so only by the spirit of the law.

Here in Oregon we have a somewhat more sane system.  The taxes don't reset after a sale, so only new houses get the full brunt of full property taxes in a hot market rather than just new buyers (property taxes for the prior year are listed in the adverts).  Our 35 year old house is assessed at about 80% of fair market value for property taxes, so the relative disparity is much less than California.

On the downside Oregon has much less progressive income tax, only the first $5k is taxes at the lower 5%, the rest is 9% (9.9% for very high earners).  I'll pay 1/4 the state income taxes if I retire to California instead of Oregon, but properly taxes might make up for the delta.

On the whole I don't mind paying my fair share of taxes, I just wish the system we had was more uniform and progressive.

Sounds like I'm in the minority in support of 13.

I figured an early retirement blog would really be in favor since it prevents your property taxes from exploding in a bubble. I'm part of the "younger" generation and would prefer to have my property tax set when I buy my house rather than see what happens in the future. Seems comparable to the certainty of a fixed rate mortgage vs. an ARM.
I would like to live in a fair system first, and pay lowest possible taxes second.  I would be OK paying higher taxes if that was what it took to have a system that truly worked for the best interests and betterment of the citizenry.  The aim of Prop 13 is fine, but it throttled things too much, and resets with property sales which leads to unequal tax burdens beyond what is fair or healthy.  Two identical families in identical houses, yet one family can pay several times more than the other purely based on when they moved in.  In Oregon taxes are throttled, but don't reset when sold, which I find more fair.

Goldielocks

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Re: Property Taxes Killing Me
« Reply #130 on: October 05, 2016, 05:44:06 AM »

This means that those owners pay a smaller and smaller share of the city services.  After decades, ends up with terrible tax rates for new buyers.

Exactly.  I'm also mystified as to why we spend so much money trying to "protect" the elderly from being priced out of their homes by rising taxes.  If your home is worth two million dollars, then it is worth two million dollars regardless of who owns it, or what they paid for it.  And I think it should be taxed accordingly. 

We NEED elderly people to be priced out of their homes, just like we need poor people to be priced out of gentrifying neighborhoods.  This is capitalism at work.  I think there's a strong argument to be made that the greater social good is met when resources are reallocated to most efficiently reflect their market values.

I can see your point but also understand how pissed off some people would be if they have lived in a home their entire life of 70 years only to be priced out because some dot com millionaires decided that area would be a cool place to build 12,000sq ft homes.
Here, seniors can apply to defer property taxes until the sale of the home.  If taxes increase because their location rockets in value, it still works because the home sale increase is greater than tax increases.

The city would lose out for many years if everyone did this, but it is so far only a few, at staggered years.

nobodyspecial

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Re: Property Taxes Killing Me
« Reply #131 on: October 05, 2016, 06:49:45 AM »
Here, seniors can apply to defer property taxes until the sale of the home.  If taxes increase because their location rockets in value, it still works because the home sale increase is greater than tax increases.

The city would lose out for many years if everyone did this, but it is so far only a few, at staggered years.
It's common in one super expensive region of Vancouver - but at the same time the cost of the city services declines when your average citizen is >70 and a property multi-millionaire.

MasterStache

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Re: Property Taxes Killing Me
« Reply #132 on: October 05, 2016, 07:04:44 AM »

This means that those owners pay a smaller and smaller share of the city services.  After decades, ends up with terrible tax rates for new buyers.

Exactly.  I'm also mystified as to why we spend so much money trying to "protect" the elderly from being priced out of their homes by rising taxes.  If your home is worth two million dollars, then it is worth two million dollars regardless of who owns it, or what they paid for it.  And I think it should be taxed accordingly. 

We NEED elderly people to be priced out of their homes, just like we need poor people to be priced out of gentrifying neighborhoods.  This is capitalism at work.  I think there's a strong argument to be made that the greater social good is met when resources are reallocated to most efficiently reflect their market values.

I can see your point but also understand how pissed off some people would be if they have lived in a home their entire life of 70 years only to be priced out because some dot com millionaires decided that area would be a cool place to build 12,000sq ft homes.

I actually saw this happen in a northern part of Kentucky. A small family owned farmhouse with quite a bit of land was ought out by a very wealthy developer. They didn't want to move but did so after being offered a couple millions dollars. I think they originally purchased for 20-30K. The developer built quite literally a castle on the property (seriously has a moat).

I would love for some millionaire to build multi-million dollar homes right next to me. I would immediately sell my house for a hefty profit. And not worry about tax rates.   

Papa Mustache

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Re: Property Taxes Killing Me
« Reply #133 on: October 05, 2016, 07:53:40 AM »
My property taxes are around $550/month.  It doesn't bother me because we have great schools and services.  Great schools are very important to me, and not just for my own kids.

Our total annual property taxes are ~$750 for a ~2000 sq ft house at the edge of town near a school built a few years ago. In flyover country. Our house payment is about ~$900.

I don't see how you good people make ends meet.

Likewise, I could never live where the topography is flatter than piss on a plate. :)

Me neither. See the Appalachian mtns for an idea of where I live. Plenty of beautiful places here without the fear of random banjo music echoing out of the woods... ;)

Papa Mustache

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Re: Property Taxes Killing Me
« Reply #134 on: October 05, 2016, 09:28:48 AM »
Wow. We pay just over 4k/annum for TWO properties per year and I was thinking it was a little much. What do your states do with the money?

Waste, mismanagement, law suits, unrealistic benefits for public employees and list goes on.

My city spent $440,000 for a sign on the way into town with the city's name on it.  I can't for the life of me figure out how it could cost that much....

Someone's BiL owns the sign company... j/k

mm1970

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Re: Property Taxes Killing Me
« Reply #135 on: October 05, 2016, 09:48:12 AM »

This means that those owners pay a smaller and smaller share of the city services.  After decades, ends up with terrible tax rates for new buyers.

Exactly.  I'm also mystified as to why we spend so much money trying to "protect" the elderly from being priced out of their homes by rising taxes.  If your home is worth two million dollars, then it is worth two million dollars regardless of who owns it, or what they paid for it.  And I think it should be taxed accordingly. 

We NEED elderly people to be priced out of their homes, just like we need poor people to be priced out of gentrifying neighborhoods.  This is capitalism at work.  I think there's a strong argument to be made that the greater social good is met when resources are reallocated to most efficiently reflect their market values.

I can see your point but also understand how pissed off some people would be if they have lived in a home their entire life of 70 years only to be priced out because some dot com millionaires decided that area would be a cool place to build 12,000sq ft homes.

It's just heartbreaking to imagine them wiping away those tears with the millions of dollars that they got by selling.
You know, I suppose they could do a reverse mortgage to pay the taxes...

DA

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Re: Property Taxes Killing Me
« Reply #136 on: October 05, 2016, 11:39:44 AM »
I think it's just people that haven't lived many places.  If they did, they would realize there are lots of places with low taxes and good schools, and places with high taxes and terrible schools. 

I live in one of the poorest cities in America. Our local "failing" school district is heavily subsidized by the state, and spends more per-student than any of the suburban district for far worse results. Hey, our high school graduation rate finally broke 60%! Let's throw a party!

The correlation between school district spending and performance is coincidental at best. Results are far more tightly correlated with the student's household income and parental academic achievement than anything else.

Bingo. 

Northwestie

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Re: Property Taxes Killing Me
« Reply #137 on: October 05, 2016, 11:48:19 AM »
I saw a good study that showed (but can't find it now!) that the strongest predictor of a school's student body performance was the percentage of kids on the free and reduced cost meal program.   I've always found it odd that we expect teachers to perform miracles when they are but one influence on a kid.

Jack

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Re: Property Taxes Killing Me
« Reply #138 on: October 05, 2016, 11:56:42 AM »
I saw a good study that showed (but can't find it now!) that the strongest predictor of a school's student body performance was the percentage of kids on the free and reduced cost meal program.   I've always found it odd that we expect teachers to perform miracles when they are but one influence on a kid.

On a related note, I'd love to see a study comparing educational outcomes for kids in schools with a high free/reduced price lunch percentage but who are not eligible for that themselves vs. kids in schools with a low free lunch percentage who also are not eligible themselves (i.e., "do the kids with the good homes do well even at the 'bad' schools?"), as well as the inverse (i.e., "do the kids from bad homes do poorly even at the 'good' school?").

lizzzi

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Re: Property Taxes Killing Me
« Reply #139 on: October 07, 2016, 09:00:12 AM »
My property taxes are around $550/month.  It doesn't bother me because we have great schools and services.  Great schools are very important to me, and not just for my own kids.

Our total annual property taxes are ~$750 for a ~2000 sq ft house at the edge of town near a school built a few years ago. In flyover country. Our house payment is about ~$900.

I don't see how you good people make ends meet.

Likewise, I could never live where the topography is flatter than piss on a plate. :)

Me neither. See the Appalachian mtns for an idea of where I live. Plenty of beautiful places here without the fear of random banjo music echoing out of the woods... ;)

Not to hijack, but I just can't let that one go by. So what is wrong with banjo music coming out of the woods? And on my road, you'll hear a couple of us jamming on our mountain dulcimers. (Which we bought with savings from our low taxes.) Country roads, take me home.

Jack

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Re: Property Taxes Killing Me
« Reply #140 on: October 07, 2016, 09:28:35 AM »
So what is wrong with banjo music coming out of the woods?

It's a Deliverance reference (and by extension, a reference to the stereotype of people in Appalachia being dangerous rednecks).

mm1970

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Re: Property Taxes Killing Me
« Reply #141 on: October 07, 2016, 12:52:54 PM »
I saw a good study that showed (but can't find it now!) that the strongest predictor of a school's student body performance was the percentage of kids on the free and reduced cost meal program.   I've always found it odd that we expect teachers to perform miracles when they are but one influence on a kid.

On a related note, I'd love to see a study comparing educational outcomes for kids in schools with a high free/reduced price lunch percentage but who are not eligible for that themselves vs. kids in schools with a low free lunch percentage who also are not eligible themselves (i.e., "do the kids with the good homes do well even at the 'bad' schools?"), as well as the inverse (i.e., "do the kids from bad homes do poorly even at the 'good' school?").

I don't have a "study", but I did do an analysis and some graphing of our local schools, because my district and the three next door have vastly different percentages of students who are English learners and on reduced/ free lunch.

In short: kids from good homes at "bad" schools do as well on standardized tests and kids from good homes who go to good schools.  For the most part.  (When the % of kids in a particular demographic gets below a certain percentage, they don't break it out for you.)  In our school, the teachers mostly go out of their way to challenge the bright kids, while trying to teach the kids who are 2-3 grade levels behind.

The poor kids at a "good" school actually perform better than poor kids at a "poor" school.  Overall.  I don't know if it's because they are pushed harder, or they are expected to keep up with the rest of the class, or that their parents cared enough to transfer them in to the "better" school.  Some of it is that these "better" schools raise hundreds of thousands of dollars, that goes to pay for classroom aides.  More teachers in the classroom (better ratios) = better outcomes.

BTDretire

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Re: Property Taxes Killing Me
« Reply #142 on: October 07, 2016, 02:07:22 PM »
I have not heard of anyone who willingly pays high property taxes and NOT brag about how great their schools are.
Then let me brag about my $1200 a year, property tax and schools the educated my two children to the point where they qualified for a Bright Futures Scholarship. Then both were accepted to THE University of Florida. < - < -
Low property taxes doesn't mean you can't get a quality education.

Spitfire

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Re: Property Taxes Killing Me
« Reply #143 on: October 07, 2016, 02:34:38 PM »
Mine are about 1% on my condo, would be 1.7% without the homestead exemption. I'm in South Florida in a very good school district. The homestead exemption makes property tax here very progressive and doesn't apply to investment property. No income tax and 6% sales tax.

MrMoogle

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Re: Property Taxes Killing Me
« Reply #144 on: October 07, 2016, 02:53:23 PM »
When I owned my home, I was paying $600/year on a $135k home.  5% income.  8-9% sales (they bumped up to 9% in the last few years, after I sold the home).

I grew up here, my high school class had at least one person going to each Ivy league school.  I personally graduated with over 60 hours of college credit through AP courses and a few dual enrollment classes.  TBH, that had more to do with the parents (lots of engineers) than the funding I'd guess.

That has changed from what I understand.  Evidently someone high ups in education misused tax dollars and the system is hurting because of it.  I haven't really followed it though.

lizzzi

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Re: Property Taxes Killing Me
« Reply #145 on: October 07, 2016, 03:32:29 PM »
So what is wrong with banjo music coming out of the woods?

It's a Deliverance reference (and by extension, a reference to the stereotype of people in Appalachia being dangerous rednecks).

Oh, OK, I get it now. Thanks. (Dangerous rednecks ??!! Hahahahahahahahahahaha. Love it.)

sol

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Re: Property Taxes Killing Me
« Reply #146 on: October 07, 2016, 06:18:46 PM »
(Dangerous rednecks ??!! Hahahahahahahahahahaha. Love it.)

Most of us coastal elites live in constant fear of uneducated white country folks.  Rednecks are scary.  That movie is about 80% to blame.

lizzzi

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Re: Property Taxes Killing Me
« Reply #147 on: October 07, 2016, 07:51:48 PM »
(Dangerous rednecks ??!! Hahahahahahahahahahaha. Love it.)

Most of us coastal elites live in constant fear of uneducated white country folks.  Rednecks are scary.  That movie is about 80% to blame.

Well, gol dang it, roll me in cornmeal and fry me for a catfish! I'll have to take all the money I save in my low tax area, put my (imaginary) shotgun in my (imaginary) pickup truck, and take a drive out to the PNW to take a gander at some of you coastal elites. I have a little education, so I reckon you don't have to be afeard of me, by gum.

nobodyspecial

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Re: Property Taxes Killing Me
« Reply #148 on: October 07, 2016, 08:16:46 PM »
So what is wrong with banjo music coming out of the woods?

It's a Deliverance reference (and by extension, a reference to the stereotype of people in Appalachia being dangerous rednecks).

Oh, OK, I get it now. Thanks. (Dangerous rednecks ??!! Hahahahahahahahahahaha. Love it.)
I think the preferred term is Appalachian-Americans

Radagast

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Re: Property Taxes Killing Me
« Reply #149 on: October 07, 2016, 10:43:06 PM »
So what is wrong with banjo music coming out of the woods?

It's a Deliverance reference (and by extension, a reference to the stereotype of people in Appalachia being dangerous rednecks).

Oh, OK, I get it now. Thanks. (Dangerous rednecks ??!! Hahahahahahahahahahaha. Love it.)
I think the preferred term is Appalachian-Americans
When I actually saw this movie I was surprised at all the misconceptions about it. Apparently even though everyone talks about it no one actually sees it.
-This movie is the origin of "Dueling Banjos". Yes, THE "Dueling Banjos". That is the banjo reference.
-The banjos are played by a protagonist and a kid sitting on the porch at a gas station. No trees.
-Actually it is more of a moral dilemma movie than a scary movie.
-Most of the rednecks are ok. Just 2 bad ones.
If you already saw it, carry on about property taxes :).