Property tax shock--some context?

[madteaparty]

Especially looking for opinions from HCoL areas...

We are moving for high school no matter what, so that DS can attend a brick and mortar. We love current, rural house but there's no local private or public options, really.

I thought I had identified a school district which is decent enough, not the best or near the best in the state, by any stretch. But looking at the property tax bill is giving me pause. I am not anti tax but it just seems fairly illogical. A colleague who bought a place in a different school district (far better, same state, better commute to major city) paid 2.5 times what I'd pay for this house and property tax there (remember, better schools! A train!) is about 2 k less....

I was hoping to buy a "forever" house and while my kids are in school, the tax bill is worth it because still cheaper than two privates... But my youngest graduates when I'm still fairly young... Have more children? Homeschool high school (perish both thoughts, I'm trying to be funny).

How do you deal?

[SparklyUnicorn]

The only way we deal was to buy a cheaper house.  Seriously.  The taxes where I am are INSANE. 

[vonfirmath]

Is this in California? I know they have a weird thing where your property taxes can not go up as fast as real estate values are so people end up with really cheap property taxes if they have been there a while, but when they sell the real rate is put on the new property.

 

(Our taxes (Texas) are pretty high.  About 2/5 of our total monthly payment. But we knew that going in and took it into account in setting a budget.)

 

 

Edited May 25, 2016 by vonfirmath

[madteaparty]

New York.

[JFSinIL]

In Illinois our property taxes are about half of the monthly payment to the mortgage holder (who holds the tax money and pays it twice a year). DD's 20-year-old townhome, her payment is $1,100 a month, and half of that is for property taxes.

Edited May 25, 2016 by JFSinIL

[SparklyUnicorn]

New York.

 

That is where I live.  LOL

[tm919]

We live in a fairly but not really high COL area (300K will buy you a tiny, fixer-upper, MAYBE; but 750K will buy something really nice). Our property tax is about 25% of our mortgage (we had put the typical 20% down). 

[lllll]

We rent.  A tiny, 4-room cabin which has the washer in the dungeon under the house, and I have to go outside and around the house to get to it.  I don't mind though.  I feed my chipmunks and red squirrels at the same time.  :D  And I actually enjoy shoveling snow.  

 

I'm guessing you're fairly young.  Probably too young to plan on staying put in a forever house?

[Guest]

I'm in Texas too and we have high property taxes, in part because we don't have state income tax. I have no idea how this translates in NY- but a couple of things that vary property taxes here are Public Improvement Districts (PIDs) and Municipal Utitlity Districts (MUDs). These go in addition to the city/county/school taxes in many areas. You can be in the same city, same district, but if you fall within the PID or MUD tax areas, you're going to be paying a great deal more in many cases. You might see if there is another house in the same district, but that falls out of those lines- assuming those exist in NY. 

 

We chose to be in a more expensive area with a top school district to protect our property value. We could have had more acregage outside of where we are, but the values are more volatile. I do bitch and moan about the taxes, but to be honest where I live, it's the Wind insurance that really kills us. 

Edited May 25, 2016 by texasmom33

[3 ladybugs]

I live in NJ in the "bad" high school boundaries for this town, and we just deal. It isn't fun. Our monthly taxes are 29% what our mortgage is. The way I see it, you get what you pay for. For where I live I am in almost a 100% walkable area. Now I don't walk, but I could if I wanted to to get basic things. If I lived elsewhere, maybe in South Jersey, I wouldn't have that but might have lower property taxes. It is sort of the nature of the beast. 

 

However in the last year we have had a reduction in our property taxes.

[SparklyUnicorn]

I'm in Texas too and we have high property taxes, in part because we don't have state income tax. I have no idea how this translates in NY- but a couple of things that vary property taxes here are Public Improvement Districts (PIDs) and Municipal Utitlity Districts (MUDs). These go in addition to the city/county/school taxes in many areas. You can be in the same city, same district, but if you fall within the PID or MUD tax areas, you're going to be paying a great deal more in many cases. You might see if there is another house in the same district, but that falls out of those lines- assuming those exist in NY. 

 

We chose to be in a more expensive area with a top school district to protect our property value. We could have had more acregage outside of where we are, but the values are more volatile. I do bitch and moan about the taxes, but to be honest where I live, it's the Wind insurance that really kills us. 

 

In NY we have high property tax rates AND state income tax. We pay more in state income tax than in federal.  We also have relatively high sale's tax. 

[Arcadia]

A friend lost her job in NY and her home is in the schenectady school district area. She found a job in CA and her hubby in NY has high chance of retrenchment due to the company. He is looking for a job in CA.

 

Now she is trying to decide if selling at loss is better than paying the high property tax. Quite a few of her NY neighbors were recently retrenched so it is hard to sell in her immediate area.

 

ETA:

Property tax here is about 1% of house assessed value so not too bad.

Edited May 25, 2016 by Arcadia

[Guest]

In NY we have high property tax rates AND state income tax. We pay more in state income tax than in federal.  We also have relatively high sale's tax. 

 

I'd move. :D Think of how rich you'd be in Texas! 

[madteaparty]

In NY we have high property tax rates AND state income tax. We pay more in state income tax than in federal. We also have relatively high sale's tax.

That and it doesn't seem to be proportionate to quality of schools, which I'd expect and understand! See my colleague example. That is an excellent school district, and a much more $ house and her taxes are less

[SparklyUnicorn]

That and it doesn't seem to be proportionate to quality of schools, which I'd expect and understand! See my colleague example. That is an excellent school district, and a much more $ house and her taxes are less

 

Absolutely.. There is NOTHING impressive about my district.  Although they do literally offer everything.  Meaning they have three levels of sports (JV, V, and modified).  They have tons of clubs, TV station, orchestra, band, etc. etc. etc.  They give everyone free breakfast and lunch.  They have tons of intervention and help. 

 

They just don't have the results to show for it. 

 

Our library spends the bulk of its money on real estate so they can have several locations within walking distance for most people because transportation is an issue for many. 

 

There is a lot of waste in govt. spending because, for example, the city and the school don't share any resources.  In fact we pay 2 separate bills so they don't even share billing services for the taxes.  At one point the library wanted to break away from the city and the school and have yet another self contained entity that would require a separate bill (and no sharing of services).  Thankfully that did not happen.

 

My city has cheap old houses.  But one town over they have big beautiful homes.  But they have equally high taxes so you can't say well it's not so bad because look the home prices reflect the high taxes (by being lower).  They don't.

 

I really don't know what they spend money on here.  Our roads are total crap so I spent a lot of money on issues with my car as a result of lousy roads.  It just stinks. 

[SparklyUnicorn]

Oh, and to add, we don't have any park programs. 

[madteaparty]

It seems to be related to the GEA and to the local tax base. The GEA made it very expensive in the Hudson Valley, because state money doesnt follow the child and the urban poor from the city moved out into the rural towns. To remediate all those children, provide ENL, medical care, McKinneyVento etc, and to give the 4.5% raises during the recession, local taxes went way up and then up again as the seniors and vets voted themselves exemptions and the state failed to fund mandates. I would be looking for something in a district with a larger tax base as farmers and seniors have significant tax breaks. Families here have been moving to NC, GA, and FL looking for affordability.

HV is where I'm looking but maybe I should go to Westchester County at this rate. That way I can maybe commute and be able to work...schools better there anyway. I just love the area. Bummer

[Annie G]

In Illinois our property taxes are about half of the monthly payment to the mortgage holder (who holds the tax money and pays it twice a year). DD's 20-year-old townhome, her payment is $1,100 a month, and half of that is for property taxes.

 

 

What's really bad about Illinois property taxes is that they are crazy high even if you live in a rural area, hours from Chicago.  It's one of the main reasons we're planning to retire to another state. 

[happypamama]

Our COL is still very reasonable, but we bought an older house that needed some work, partly because the taxes were lower than on new homes. And then about three years after we bought it, the entire county did a tax restructuring. They decided that the newer homes were paying too much in taxes compared to older homes (many of which are owned by seniors. . . lots of family homestead places around here, of which ours is one), so they redid everything. They are still taking in the same amount of taxes overall, but it's more proportional now, so newer homes pay less, and older homes pay more. My taxes went up quite a bit. I don't mind the county and local taxes, but I mind the heck out of the school property tax. Every month, I think about what I could do for my kids if I wasn't paying the mediocre school district so much in taxes. I want school choice. If the district will pay for my kids to attend and be bused to the charter schools fifteen miles away, they should cut me a deal because they get to claim my kids as part of their district, but they don't have to pay out a darned thing for them, other than to send me letters to remind me when my homeschool paperwork is due. And I've got kids who would need some special services too; I'm doing them a favor by not making them provide G&T and speech stuff for my kids. Oh, I'm sorry; where was I? Oh, yes.

 

I wouldn't mind the taxes so much if I hadn't bought with lower taxes in mind. Changing the game bugs me a lot. i feel your pain, OP.

[gypsymama]

We considered this among a LOOOONNNNGGGG list of other priorities when picking somewhere to move to. We chose a good area for us with low to moderate cost of living. I actually haven't seen the real hit of taxes since this is our first year in our home but real estate taxes aren't high at all. We do have to pay personal property tax as well and I have NO idea how much that will be or how it is figured. That kind of worries me and I won't see the check on that until spring of next year. Ugh. We do have state income tax and sales tax here but they aren't too bad. Overall I'm not finding living here (MO) to cost us any more than when we lived in MS and it's a MUCH better area with much better services. We did include COL estimates in our decisions though, bought our house in the less desired area of the county and bought a cheap home that was in decent condition while needing some updates. We love our little home and it's made life very affordable.

[Guest]

Property taxes can vary by state (some have higher property taxes because the state has no income tax or no sales tax).  

They can vary by county or municipality or school district as well, because of what the voters in each of these entities have agreed to fund by adding to their property taxes, or by the way they calculate them.  As an example of this last:  we used to live in a house that was 6 houses from Lake Washington.  Our taxes were around $8000.  The house down the street, not the waterfront one, but one similar in house and property size, their property tax was $15,000.  The closer to the lake, the higher the property tax.  But the lady across the street from the $15,000, she paid only $2000, because they grandfathered in owners who had lived there for 40 years (because property values skyrocketed, those on fixed incomes could be forced out of their homes by this sort of thing, so they froze the tax rate for them).  But when that lady died, and her house sold, the taxes went up to the $15,000.

 

Another example:  My friend had a house of similar size, but her property was 3x the size of mine, and it was out in the sticks, but in the same county.  Their property tax was $12,000.  The land is taxed at a different rate than the structure in this county.  I had a much better location, and the value of my house was higher on the market, but the way they calculated the taxes, she paid 1.5x what I did for taxes.

 

All of those things,and more, come into play.  I should note that when we bought our house, the taxes were $4,000.  Two years later, they were $8000...because there was a flurry of tax-raising initiatives that took it to $6,000 one year, and then the increase in property values took it to $8,000.  

[JFSinIL]

What's really bad about Illinois property taxes is that they are crazy high even if you live in a rural area, hours from Chicago.  It's one of the main reasons we're planning to retire to another state.

Yup. We are about 40 miles n/w of Chicago. Hubby inherited his dad's tiny law practice and clients (a lot of Polish immigrants)and it would be next to impossible for him at his age (almost 57) to start over elsewhere. He is already starting over by taking over his dad's practice (which was being shut down at the time) when he lost a Big Deal job at a large firm. Plus our adult son with autism now has state funding (hard to get here) for both a day program/aide AND a group home if we can find a placement close to the day program. So odds are we will never leave Illinois now.

[Pegasus]

Wow!  We pay just under $1,000 annually in property tax in a state without an income tax.  I'll try to stop complaining when the bill comes.   :closedeyes:

[goldberry]

We moved from Texas to Colorado, and were able to buy a much nicer house because the property taxes are lower.  HO insurance was way lower also.

 

ETA, that said, the school system sucks, so hence the homeschooling..  DD was told that the teachers in our county are among the lowest paid in the state.

Edited May 26, 2016 by goldberry

[gardenmom5]

tax assessors are in the business of maximizing taxes paid.  remember that.

 

dh fights our property tax assessment every. single. year.  one  year, he got such a big reduction, the *county* appealed to the state!

 

find out the comps the county uses (they will use the comps that make the property look the most expensive.) - and go after them and undercut their case.

[BarbecueMom]

What's really bad about Illinois property taxes is that they are crazy high even if you live in a rural area, hours from Chicago. It's one of the main reasons we're planning to retire to another state.

We considered moving over to IL when DH was working at Scott AFB, but nope nope nope due to the property taxes. He spent way less money commuting. My dad lives in central IL and pays quadruple what we pay in taxes, for a house that's worth a bit less than mine.

[Ottakee]

Ours is about 1% of our home value. We have the lowest tax rate in the county but we are rural with fewer services.

 

We have a 5 bedroom/4 bath home on 5 acres with a horse barn and pole barn. We considered selling and moving to something smaller in town so our kids could use the public transportation bus (you call for rides) but the taxes would be a lot higher and house much smaller in a tiny lot.

 

 

 

So we stay.

[QueenCat]

We've had low property taxes, we've had high.......... when we had low, I learned what we didn't get from our govt..... dead animals left in roadways, poor libraries, schools with poor performance (in comparison with close by districts with higher property taxes), etc......... you get what you pay for, imho.

[TammyS]

 

 

find out the comps the county uses (they will use the comps that make the property look the most expensive.) - and go after them and undercut their case.

 

Then casually hand them over to the appraiser when you want to refi or sell the house? :coolgleamA:

[Lanny]

Recently, there was a thread, would you buy your childhood house.  I remember thinking about that. We would need to win the super Lotto or something. First, to buy the house, which is now valued at about 2 million dollars (the lot is in a very prestigious location in Southern CA).  But then, the Property Taxes would be way too high for my Retirement Income.  We would need to win the lottery, each and every year, to pay the taxes.  There are places (in the San Diego area, for example) where they will eventually go bankrupt, because several school districts financed new schools, with no up front payments for 20 or 30 years.  When the time for payments arrives,  the Property Taxes in those areas will skyrocket.  There's no free lunch.