Property Taxes

[jne]

quote:Originally posted by rwarn17588

OK, so you paid your mortgage off early.

That means you paid far MORE than the usual monthly payment, no?

Therefore, your property taxes would be even LESS of a proportion from what you were paying extra to retire the note early.

And those values set by the assessor aren't arbitrary; there's a system, and it's not on a whim.

If you had the ability to pay off your mortgage 17 years early, you shouldn't complain about something as relatively trivial as annual property taxes.

I think Steve can afford it, but that doesn't mean that its OK.  The fixed income scenario troubles me.  How about if Steve had an accident at work and wound up on disability.  It sure wouldn't be right to price him out of his own home over time with property taxes.  I've seen a few young folks inherit their parents homes (in these cases the same home they grew up in) and lose hard fought battles to keep up with the property taxes.  They were either not ready for the responsibility or busy trying to get an education.  I'd play a full size violin for some scenarios...

[Wrinkle]

Property Taxes are unique in that they constantly re-rate annually based upon some percieved market value (by formula and sometimes inspection) which is unrealized by the owner.

IMO, real property should be handled similarly to automobiles Excise Tax where the value diminishes over time based upon depreciation.

If one were to improve the property, even inject some needed maintenance, then the value might increase, that's is, regain some of the lost value. Or, actually increase from the purchase price if tangable improvements are made.

But, beyond that, it should fix at the purchase price, and never be more than that until sold.

And, at the time an owner has not provided proper maintenance and upkeep, it would eventually diminish in value to zero (fully depreciated), at which time the City/County could claim it a "hazard" or "derilected" property and demolish it for better use.

Just a thought. Doubt there's a snowball's chance of anything like this unless it initially revenue-neutral.

btw, seems a refinance might need to qualify as a "sell" in this situation, since they are market-value appraisal based transactions. But, not necessarily a 2nd mortgage or home-improvement loan, at least until the tangable results appear.

[cannon_fodder]

Wrinkle, that is kind of the way it is.  They can only raise your assessment so much in an allotted time, often that rate is less than inflation.  So in essence the assessed value can not change much without a sale.

Mine went up because I refinanced my house (with a new super low ARM that only goes to 46% after 6 months, j/k), so it was assessed with a new (and more accurate) market value.

Though, of course, there are examples of communities and situations were property was appreciated for no decent reason but to raise taxes.  Purchase price is the best indicator of market value, then follow area trends (if my neighbors house sold for 10% more than it did 2 years ago, and his neighbors sold for 10% more...), or adjust nominally for inflation.

[Wrinkle]

quote:Originally posted by cannon_fodder

Wrinkle, that is kind of the way it is.  They can only raise your assessment so much in an allotted time, often that rate is less than inflation.  So in essence the assessed value can not change much without a sale.

Mine went up because I refinanced my house (with a new super low ARM that only goes to 46% after 6 months, j/k), so it was assessed with a new (and more accurate) market value.

Though, of course, there are examples of communities and situations were property was appreciated for no decent reason but to raise taxes.  Purchase price is the best indicator of market value, then follow area trends (if my neighbors house sold for 10% more than it did 2 years ago, and his neighbors sold for 10% more...), or adjust nominally for inflation.

Yeah, close, except for the depreciation part.
And, imagine your taxes going down each year instead of up, at least until you paint the place, then it gets close to sale price again.

The 5% cap now is only in amount paid, not in Market Value. So one appraisal puts you in a 5%/year mode for five years before the next appraisal, or some other significant change/improvement.

Remember when they used to come inside your house, look around and appraise your assets? Man, glad that's gone.

[guido911]

quote:Originally posted by rwarn17588

OK, so you paid your mortgage off early.

That means you paid far MORE than the usual monthly payment, no?

Therefore, your property taxes would be even LESS of a proportion from what you were paying extra to retire the note early.

And those values set by the assessor aren't arbitrary; there's a system, and it's not on a whim.

If you had the ability to pay off your mortgage 17 years early, you shouldn't complain about something as relatively trivial as annual property taxes.

So stop b$#ching and pay your taxes Steve. Working hard to pay off that mortgage early with perhaps the notion of saving for retirement or other purchases, or just to be debt free is no accomplishment.

[Double A]

Like I said before, protest it. It's a bit of a pain in the a**, but it will likely be reduced.

[waterboy]

My parents actually moved from a neighborhood they built a home in during their peak income years because it had appreciated so much that when they retired and began living on fixed income, they no longer could afford the increasing taxes. Of course they couldn't afford the maintenance, improvement and repairs either. It was just time to move.

However, the idea that you propose Wrinkle, of adjusting the tax at time of sale, has its own problems. It caused much controversy in California a decade or so back. Seems no one could/would sell their homes once the bubble started to grow in real estate values there because the property tax would skyrocket making the effective price even higher. That stifled tax collections when they were needed most for growing communities and effectively froze new buyers out of established neighborhoods. It fed suburban sprawl and artificially affected the real estate market. Some properties were vacated by the owner who allowed their heirs to move into the property with agreements for transfer after their death thereby delaying needed taxes. People will do a lot of dumb things to avoid taxes.

[Steve]

I can't comment specifically to any post on this thread, because it seems to me that the notion of hard work, savings, thrift, and financial responsibility seems lost on most of you.  Perhaps the comments were made in jest or sarcastically, and if so, then this is not directed to you.

Since when did the concept of thrift, financial responsibility and paying off one's debts become an object of ridicule?  I purchased my home not as an investment, but as a place to live out my life contently, and therefore paid off my mortgage debt as soon as I was able too.  I paid off my mortgage with the idea that I would have less expense in the future.  I saved and sacrificed for 13 years, put every extra $ I made towards paying off the mortgage, and succeeded in paying off my home 17 years early.  I am proud of that and I don't think I should be penalized by rising property taxes, based on fleeting market values.

All you that have critisized and mocked my comments, do as I have done.  Pay off your own home mortgage, live thriftly, expect your expenses to decline, experience the opposite, and then we will talk.  

[TeeDub]

Steve,

Maybe I missed something here.  First, congratulations on paying off your house early.   If it wasn't for the tax advantages I get from paying a mortgage, I would be scrambling trying to pay mine off instead of investing on the side.

Unfortunately the Federal government has actually given the American consumer a valid (and economically advantageous) reason to incur and continue to keep debt.   Other than not having to worry about a house payment, you actually don't get any value from paying off your house early.

As for property taxes, as long as they know how to make them go down when the values go down, they can adjust them all they want.

[Steve]

quote:Originally posted by TeeDub


Unfortunately the Federal government has actually given the American consumer a valid (and economically advantageous) reason to incur and continue to keep debt.   Other than not having to worry about a house payment, you actually don't get any value from paying off your house early.

You make make some valid points, from the real estate investor's point of view.  I bought my home back in 1987, not as an investment, but because I loved the architecture (Lortondale neighborhood) and intended this to be my permanant residence in Tulsa.  And so it has been to this day.  This 8400 sq. ft. plot of former Creek (Muscogee) Indian land (Frances Perryman allotment) is mine for as long as I can afford to pay the taxes.

I have never viewed my home as an investment.  My home is my security, the roof over my head, the one thing no one can ever deprive me of, God willing, now that I don't owe a mortgage.  My home and my maintenance of it has always been an extension of myself and my expression of value to my neighborhood and the Tulsa community.

I will always maintain my property to the best of my ability.  But I take issue with the ever increasing property tax bill, based on paper market values.  Live in your home for 20+ years and then you will truly understand my opinion.

[wenwilwa]

Can someone tell me if our situation is typical...

When our house was purchased five years ago, the market value set by the county was $71,700 (which was comparable to the purchase price). The assessor's office has raised our market value between 2 and 5% over the last four years.

This year, they've raised our market value 54%, fifty-four percent, to $118,000.

We are definitely protesting, and surely they will lower it because we've got an appraisal and comps to back our protest. However, I feel like whoever assessed our property is either incompetent or the assessor's office is trying to gouge homeowners who may get around to protesting in the very short 20 day window.



BTW, this house was built 1958, is under 1500 square feet, has never been remodeled (i.e., same old kitchen and bathrooms since 1958), nor had any square footage added. We are not in a particularly desirable neighborhood (close to the high crime area of 61st and Peoria).

[sgrizzle]

Your value seems high but it may be tired to soem area property prices driving yours up. As I understand it, even if they double your home's assessed value, the amount your taxes goes up per year is still capped.

[jne]

Yeah, but she can expect a 5% increase per year guaranteed for at least the next 11 years. No?

[sgrizzle]

quote:Originally posted by jne

Yeah, but she can expect a 5% increase per year guaranteed for at least the next 11 years. No?

Sounds like it.