How much property tax is too much?

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snackdog
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How much property tax is too much?

Post by snackdog »

Property taxes in the US seem to range between around 0.5% to nearly 3%. In cities with higher prop tax rates, we often struggle to justify considering homes we like after seeing massive property tax liabilities, like, say $50,000/year. This seems excessive for a single home, no matter where you are. We prefer the $10-20K/yr range mostly.

Thoughts?
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ResearchMed
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Re: How much property tax is too much?

Post by ResearchMed »

snackdog wrote: Mon Jun 21, 2021 5:44 pm Property taxes in the US seem to range between around 0.5% to nearly 3%. In cities with higher prop tax rates, we often struggle to justify considering homes we like after seeing massive property tax liabilities, like, say $50,000/year. This seems excessive for a single home, no matter where you are. We prefer the $10-20K/yr range mostly.

Thoughts?
That seems like a bit of an odd way to characterize tax costs.

The tax would depend upon the assessed value of the house. $10-20k could be a horrendous amount at one price point, but a real bargain at another.

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Coachrhino11
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Re: How much property tax is too much?

Post by Coachrhino11 »

snackdog wrote: Mon Jun 21, 2021 5:44 pm Property taxes in the US seem to range between around 0.5% to nearly 3%. In cities with higher prop tax rates, we often struggle to justify considering homes we like after seeing massive property tax liabilities, like, say $50,000/year. This seems excessive for a single home, no matter where you are. We prefer the $10-20K/yr range mostly.

Thoughts?
If you it makes you uncomfortable to pay or it takes up too much of the budget. In Texas, property taxes are ridiculous and Colorado they are low but Texas has no state income tax and Colorado has 4.63%. Who wins? It depends on your situation. If retired and on fixed income Colorado also has perks to further reduce income tax. Texas will freeze school part of property at 65. So, I think Colorado is better if retired and on fixed income.

Many people who have moved from California to the Austin area have freaked out about the ridiculous property taxes on that "paid off house". :confused
livesoft
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Re: How much property tax is too much?

Post by livesoft »

We pay substantially less than $10K a year and live in the state of Texas. While the "percent" rate may be higher than elsewhere, the homes are less expensive than places like New York and California.

I actually do not have a preference, but I do like to get value for what I pay. I think I do get value here. I do not consider them ridiculous.
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JohnBDB
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Re: How much property tax is too much?

Post by JohnBDB »

We pay a little under 6k in Texas with no state income tax home around 330k value. My friend pays about the same but his house double 700k. He pays California state income tax. They get you somehow.
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Re: How much property tax is too much?

Post by Coachrhino11 »

livesoft wrote: Mon Jun 21, 2021 5:55 pm We pay substantially less than $10K a year and live in the state of Texas. While the "percent" rate may be higher than elsewhere, the homes are less expensive than places like New York and California.

I actually do not have a preference, but I do like to get value for what I pay. I think I do get value here. I do not consider them ridiculous.
Agree. Since you are in Texas, do you see value in Austin? Because I sure don't anymore. I have houses selling for 700k on my street that were 350k not long ago, downright stupidity. We absolutely plan on selling and moving to LCOL when we retire. The taxes here on a 350k county appraised house is around 7500-8k per year. You pay off the house but it's never really paid for. THIS...is why Colorado or states with lower property taxes are better IMO.
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Re: How much property tax is too much?

Post by hicabob »

California property tax is weird due to prop13. I have an associate with a 4M or so house in Saratoga that he has owned for 50 yrs or so and his property tax is about 3k/year. If he were to sell it the new owners would be paying about 50k/yr. My associate gets "value". New buyers, not so much.
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Re: How much property tax is too much?

Post by RickBoglehead »

Odd question, since property taxes have to do with assessments, not valuation of house on market, and vary by state, county, city, etc. - all dependent on the services you receive - or don't receive. My taxes include hundreds of dollars for a library system, and over $1,000 for a county community college. If I owned a home worth $5 million, paying $50,000 a year in property taxes would be fine. For my current home, that would be a bargain prorated up.

Any assessment of "taxes" needs to include income taxes, property taxes, personal property taxes, sales taxes, etc.
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Re: How much property tax is too much?

Post by Coachrhino11 »

hicabob wrote: Mon Jun 21, 2021 6:03 pm California property tax is weird due to prop13. I have an associate with a 4M or so house in Saratoga that he has owned for 50 yrs or so and his property tax is about 3k/year. If he were to sell it the new owners would be paying about 50k/yr. My associate gets "value". New buyers, not so much.
I'm sure many here will disagree with me, but I think this is good. All across this country, people who have owned the house for years or have been handed down to children can't afford to stay there because of the astronomical increases in property taxes and what happens? The wealthy IT couple come in and scoop up the inner city home and begin the gentrification process again and again. I do believe this has intentional consequences for many involved.
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Re: How much property tax is too much?

Post by adamthesmythe »

If the property tax is too high, buy a cheaper house.

Only the total cost of your lodging matters, not the individual components.
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Re: How much property tax is too much?

Post by cheese_breath »

snackdog wrote: Mon Jun 21, 2021 5:44 pm Thoughts?
It is what it is. Rants here won't change it. If you don't like the taxes where you live move somewhere else where taxes are less, or rant to your local government.
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quantAndHold
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Re: How much property tax is too much?

Post by quantAndHold »

Coachrhino11 wrote: Mon Jun 21, 2021 6:37 pm
hicabob wrote: Mon Jun 21, 2021 6:03 pm California property tax is weird due to prop13. I have an associate with a 4M or so house in Saratoga that he has owned for 50 yrs or so and his property tax is about 3k/year. If he were to sell it the new owners would be paying about 50k/yr. My associate gets "value". New buyers, not so much.
I'm sure many here will disagree with me, but I think this is good. All across this country, people who have owned the house for years or have been handed down to children can't afford to stay there because of the astronomical increases in property taxes and what happens? The wealthy IT couple come in and scoop up the inner city home and begin the gentrification process again and again. I do believe this has intentional consequences for many involved.
Except that what you’re describing doesn’t do that. What happened here is the young’uns don’t want to live in grandma’s old house, so they take that low, low property tax base and turn it into (depending on the neighborhood) a slumlord rental or an AirBNB. Which is awesome for the person who just inherited grandma’s house, but not good for either the neighborhood or for affordability. It’s probably a big part of why there’s such a disconnect between single family home rental and purchase prices.

I like Prop 13 for keeping our elders in their lifetime homes. As a way to preserve intergenerational wealth though, it has some bad side effects.
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Re: How much property tax is too much?

Post by ram »

>= 3% of market value of property.

In my locality assessed value is about 90% of market value. So >=3.33% of assessed value for my area. Ours is about 2.3% of assessed value.
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Coachrhino11
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Re: How much property tax is too much?

Post by Coachrhino11 »

quantAndHold wrote: Mon Jun 21, 2021 6:55 pm
Coachrhino11 wrote: Mon Jun 21, 2021 6:37 pm
hicabob wrote: Mon Jun 21, 2021 6:03 pm California property tax is weird due to prop13. I have an associate with a 4M or so house in Saratoga that he has owned for 50 yrs or so and his property tax is about 3k/year. If he were to sell it the new owners would be paying about 50k/yr. My associate gets "value". New buyers, not so much.
I'm sure many here will disagree with me, but I think this is good. All across this country, people who have owned the house for years or have been handed down to children can't afford to stay there because of the astronomical increases in property taxes and what happens? The wealthy IT couple come in and scoop up the inner city home and begin the gentrification process again and again. I do believe this has intentional consequences for many involved.
Except that what you’re describing doesn’t do that. What happened here is the young’uns don’t want to live in grandma’s old house, so they take that low, low property tax base and turn it into (depending on the neighborhood) a slumlord rental or an AirBNB. Which is awesome for the person who just inherited grandma’s house, but not good for either the neighborhood or for affordability. It’s probably a big part of why there’s such a disconnect between single family home rental and purchase prices.

I like Prop 13 for keeping our elders in their lifetime homes. As a way to preserve intergenerational wealth though, it has some bad side effects.
Now that you put it that way, I agree with you. It should only be allowed for elders maybe? We are experiencing the insanity of AirBNB since we are going on vacation. Hotels, YES PLEASE. They are really ripping people off on fees.
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Re: How much property tax is too much?

Post by Silly Wabbit »

Coachrhino11 wrote: Mon Jun 21, 2021 6:37 pm
hicabob wrote: Mon Jun 21, 2021 6:03 pm California property tax is weird due to prop13. I have an associate with a 4M or so house in Saratoga that he has owned for 50 yrs or so and his property tax is about 3k/year. If he were to sell it the new owners would be paying about 50k/yr. My associate gets "value". New buyers, not so much.
I'm sure many here will disagree with me, but I think this is good. All across this country, people who have owned the house for years or have been handed down to children can't afford to stay there because of the astronomical increases in property taxes and what happens? The wealthy IT couple come in and scoop up the inner city home and begin the gentrification process again and again. I do believe this has intentional consequences for many involved.
Why should folks with inherited wealth get the breaks?

I try to look at the value I get. I'd gladly pay higher taxes for improved roads and community amenities.

It's too high if I can't afford it or there's a better alternative.
Last edited by Silly Wabbit on Mon Jun 21, 2021 7:11 pm, edited 1 time in total.
Coachrhino11
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Re: How much property tax is too much?

Post by Coachrhino11 »

cheese_breath wrote: Mon Jun 21, 2021 6:55 pm
snackdog wrote: Mon Jun 21, 2021 5:44 pm Thoughts?
It is what it is. Rants here won't change it. If you don't like the taxes where you live move somewhere else where taxes are less, or rant to your local government.
If you want to say that, you can say that about any topic. If everyone sat on their hands and never voiced thoughts, we would never have any positive changes in this country. Thank goodness many of us do stand up and speak out. People should not have to move somewhere else every time they want positive changes.
Normchad
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Re: How much property tax is too much?

Post by Normchad »

Taxes are just another expense. Put it in your budget.

Also note worthy, is that the way property tax can rise over time varies a lot based on location. So it can be one big expense that you have little control over.

I’m considering buying a house in Texas. The property tax rates there are much higher than what I’m used to. But that seems to help suppress prices somewhat.
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Re: How much property tax is too much?

Post by Coachrhino11 »

Silly Wabbit wrote: Mon Jun 21, 2021 7:09 pm
Coachrhino11 wrote: Mon Jun 21, 2021 6:37 pm
hicabob wrote: Mon Jun 21, 2021 6:03 pm California property tax is weird due to prop13. I have an associate with a 4M or so house in Saratoga that he has owned for 50 yrs or so and his property tax is about 3k/year. If he were to sell it the new owners would be paying about 50k/yr. My associate gets "value". New buyers, not so much.
I'm sure many here will disagree with me, but I think this is good. All across this country, people who have owned the house for years or have been handed down to children can't afford to stay there because of the astronomical increases in property taxes and what happens? The wealthy IT couple come in and scoop up the inner city home and begin the gentrification process again and again. I do believe this has intentional consequences for many involved.
Why should folks with inherited wealth get the breaks?
I understand what you are saying. Why should people with inherited poverty NOT get breaks and continue to be pushed out further outside of crummy side of town? Because that's been happening here and every city for too many years.
livesoft
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Re: How much property tax is too much?

Post by livesoft »

Coachrhino11 wrote: Mon Jun 21, 2021 6:02 pmAgree. Since you are in Texas, do you see value in Austin? Because I sure don't anymore. I have houses selling for 700k on my street that were 350k not long ago, downright stupidity. We absolutely plan on selling and moving to LCOL when we retire. The taxes here on a 350k county appraised house is around 7500-8k per year. You pay off the house but it's never really paid for. THIS...is why Colorado or states with lower property taxes are better IMO.
Well, with your homestead exemption your assessed value cannot go up more than 10% a year, so unless you bought recently I don't think your prop taxes reflect what a new buyer would be paying. I do not live near Austin, so I am agnostic about it.

We haven't paid state income taxes since we left New York. Our Texas property taxes helped pay for K-12 for our 2 children and I suppose in a weird way for less expensive college education for one of our children. Other things come to mind as well, but those are probably the topic of future threads.
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Coachrhino11
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Re: How much property tax is too much?

Post by Coachrhino11 »

livesoft wrote: Mon Jun 21, 2021 7:17 pm
Coachrhino11 wrote: Mon Jun 21, 2021 6:02 pmAgree. Since you are in Texas, do you see value in Austin? Because I sure don't anymore. I have houses selling for 700k on my street that were 350k not long ago, downright stupidity. We absolutely plan on selling and moving to LCOL when we retire. The taxes here on a 350k county appraised house is around 7500-8k per year. You pay off the house but it's never really paid for. THIS...is why Colorado or states with lower property taxes are better IMO.
Well, with your homestead exemption your assessed value cannot go up more than 10% a year, so unless you bought recently I don't think your prop taxes reflect what a new buyer would be paying. I do not live near Austin, so I am agnostic about it.

We haven't paid state income taxes since we left New York. Our Texas property taxes helped pay for K-12 for our 2 children and I suppose in a weird way for less expensive college education for one of our children. Other things come to mind as well, but those are probably the topic of future threads.
Agree with much of what you said. But 10% in a year is A LOT! And that can happen annually. The new buyers are overpaying. If we were buying today we most likely would not be able to buy in this neighborhood. Grateful for that I guess. But the people paying 700k will raise all of our taxes moving forward.
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Re: How much property tax is too much?

Post by Jags4186 »

snackdog wrote: Mon Jun 21, 2021 5:44 pm Property taxes in the US seem to range between around 0.5% to nearly 3%. In cities with higher prop tax rates, we often struggle to justify considering homes we like after seeing massive property tax liabilities, like, say $50,000/year. This seems excessive for a single home, no matter where you are. We prefer the $10-20K/yr range mostly.

Thoughts?
Any property in the US that has a $50k property tax bill is a mansion. I live in the highest property tax county, in the highest property tax state in the country. This is what $50k in property taxes gets you: https://www.zillow.com/homedetails/72-L ... 0541_zpid/? I imagine you can get quite a bit more elsewhere at $50k property taxes. Don’t want to pay $50k? Don’t buy a mansion.
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Re: How much property tax is too much?

Post by London »

Jags4186 wrote: Mon Jun 21, 2021 7:23 pm
snackdog wrote: Mon Jun 21, 2021 5:44 pm Property taxes in the US seem to range between around 0.5% to nearly 3%. In cities with higher prop tax rates, we often struggle to justify considering homes we like after seeing massive property tax liabilities, like, say $50,000/year. This seems excessive for a single home, no matter where you are. We prefer the $10-20K/yr range mostly.

Thoughts?

Any property in the US that has a $50k property tax bill is a mansion. I live in the highest property tax county, in the highest property tax state in the country. This is what $50k in property taxes gets you: https://www.zillow.com/homedetails/72-L ... 0541_zpid/? I imagine you can get quite a bit more elsewhere at $50k property taxes. Don’t want to pay $50k? Don’t buy a mansion.
That doesn’t look like a mansion to me.
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Re: How much property tax is too much?

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