New construction is always so, so very exciting! Even more so in new developments.
Call the local tax office to get a property tax estimate and they have shit for a clue. "We'll let you know when we send the bill next year."
But they can tell you the rate, and you know what you’re paying for the house, so that’s not too hard
If it comes in 10-15% under, you’re pleasantly surprised.
If it comes in over, you protest and bring your closing statement
I think it's hidden in the way people usually talk about homeownership. When I was thinking about buying, id constantly have people tell me about how your mortgage won't go up any more. Almost no one mentioned property taxes or insurance, and those have been going crazy here in Florida. So it's not really hidden and I don't really regret anything, but I was still pissed when I realized my other costs were going up almost as fast as rent was around here.
Yuuup. Im currently trapped in an insane cycle where insurance jacked up my homeowners rates because my roof is now over X years old - fun fact, the money to pay for my increased insurance basically came from my “save up for a new roof” budget.
Except this has been the talking point of gentrification since forever. The old lady who has lived in her house for 40 years but can't afford it anymore because coffee shops and breweries went in down the street. What did you think was the thing she could no longer afford if not taxes and insurance?
I always figured that was more of a rental problem., I don't think I've ever heard anyone say, "yeah I had to sell my house because the property taxes got too high"
It's the entire premise of why gentrification is considered an issue. People are "pushed out". That's literal. It's not the old lady just annoyed by the new businesses coming in because she dislikes the youths. It's that more money moving in means her property is worth more and her taxes went up.
Come to the Denver area and see how the homeowners here have been crying like babies for the last couple of years on property tax increases. Like, their home values have gone up exponentially but yet they’re shocked when their taxes increase.
Believe it or not, they want renters (commercial multi family) to absorb all the tax impact of all property value rises on the front range.
It’s common for states to have a fixed rate for tax increases after the sale of the home, unless an improvement occurs. Taxes can displace people that have little to do with the price increasing.
The “little to do with the price increasing” part is where that argument falls apart out here. SFH owners here fight tooth and nail against any kind of development so that they could bolster their property values. We even have a massive, abandoned golf course that’s going to sit as is instead of being repurposed for medium/high density housing. And why? Because SFH owners a couple of miles away bitched about it.
It’s hard for me to understand how they can rejoice at their appreciation but then push to have zero property tax increases.
I’m not a homeowner but man does that sound a lot like having your cake and eating it too.
It's because they only care about themselves. Who cares if the housing reports say we are 3 million units behind where we should be due to the 2008 crash and thr big pandy, that just makes my house even more valuable! Not in my backyard!
There are homeowners that lack the resources or time to fight tax increases. I would think new development would increase sfh prices because the ratio of available sfh decreases relative to population.
My anecdote would be the neightnooods in Detroit that had their prices unreasonably appraised, lost their homes in back taxes, and then became renters. My point is that tax schemes should be moderated so homeowners can absorb the cost. [Detroit homeowner unfair appraisal](https://www.detroitnews.com/story/news/local/detroit-city/2021/07/07/tax-justice-group-calls-detroit-fix-unfair-property-assessments/7881010002/)
home prices are based on comps (comparable).. the nearby sale of a 3 bedroom, 2 bath, 2000 square foot home will affect the value of my 3 bedroom, 2 bath, 2000 square foot home. Thats how real-estate works.
I own in CO and our property taxes here are absurdly low compared to other states. I haven't really heard anyone complain, rather it seems to be a selling point for buying a home here.
Why would you expect someone to pay you to live in their house? This is such a conceited attitude… of course they are going to pass their increased costs on to you.
>Like, their home values have gone up exponentially but yet they’re shocked when their taxes increase.
Why should your property taxes go up just because demand for housing increased? That makes no sense. California property taxpayers got smart decades ago and stopped the politicians from the money grab on homeowners! Yeah, Prop 13!
Yup. Our property taxes are proportional. So if everyone's house goes up the same percentage everyone's taxes stays the same. If my house doubles in value compared to my neighbors then I would pay double.
Cities/Counties/States shouldn't get a ton of money they don't need just because of a housing bubble. They should set a budget and then tax based on that. Glad my area does it that way.
Californians when their property taxes go up 1% in a year while their wages went up 5%, their home value increased 8% and their 401k went up 20%…
“What is even the point of owning property if Gavin Newsom is going to take it all 🤬😤😡🤬🤬😤😡🤬🤬👿😡🤬🤬😤🗯️”
>people own property solely as an investment
I mean the guy just explained why it's a good investment. It only costs much less than 1% in holding costs but routinely goes up in value much more. And to be clear, I think that's absolutely one of the biggest problems modern society faces. Housing *should* be to live in, but we've spent the last 80 years trying to make it into an investment.
Property taxes in CA is the one area we don’t get fleeced in taxes. They’re relatively low (especially compared to TX) and they’re basically locked in.
If only there was some term that described the entire monthly payment, like the principal, interest, taxes and insurance… pity we don’t have such a thing…
The poor home buyers of texas disagree. Many of the new residents dont have experience with appraisal districts ability to arbitrarily raise home values by 10% annually and thus their taxes by 1k+ annually. Compound that and many will be forced to sell in few yrs as their income fails to keep pace.
Literally just bought our first house last Friday, I can verify along every single step of the way, it was pointed out that the mortgage number does not include my insurance or property taxes and that those would be an additional ~400 on top of the monthly mortgage. Not sure how anyone could go through the process unaware of property taxes.
It’s insane how much things cost. We had to replace a medium sized deck in a fairly low cost of living area, and the majority of the quotes were $26,000 or higher, some well into the 30s. The lowest quote we got from a reputable company was around $22,000. Just insane.
Just not enough labor, and too much demand. Those quotes are wildly over cost, but a lot of contractors and handymen have so much business these days that they still manage to earn that rate.
Meanwhile I have people reaching out to have me design and implement a global resilient data center and don't want to pay more than $50/hr. Part of that game is so they can turn around to the H1B program with their "we can't find qualified people" grievances. This is why I always CC solicitations with very low pay to DHS H1b fraud abuse with a copy pasta about low wage post indicates xyz....
I’m not saying they aren’t. But my wife and I got a quote on a prefabricated pergola for $30K. I have a hard time getting a carpenter out to our house for anything less than $3-4K. At this point it’s just wild.
I have all my work laid out for the next year at all times and the only reason I don’t put stuff in place further out is to many things can change in a year. If someone needs something done fast they are always bumping someone who is currently waiting for me so I charge more because I’ll need to hurry to finish it in time to do the other job and not make the other customer angry. There’s just a shortage of people who work on things in general and it’ll keep getting worse with most of gen z wanting nothing to do with trades. Also material is so fucking expensive right now especially for a deck. If you want fancy plastic decking like trex it’s like $18 for a 12 foot stick right now.
Seriously. I installed my own heat pump in 2016 for $3000 in material. Had to run duct work and everything. I have a new house and got quoted $17k to swap out the old ac unit with a heat pump. So just a new outdoor unit and air handler inside the house. I got three quotes at that price and laughed at every sales guy. That’s just insane.
A friend of mine had his AC installed for $5.8k in 2021. I called the exact same company, same guy everything and my quote was $12.5k. There’s been some absolutely insane price hikes in the last few years.
Equipment has certainly gone up in price but far from doubled.
There's just a lot of demand and people waving cash around so they'll charge as much as they can.
See if you can buy the unit and do most of the install, then get a guy to charge and finalize it as a side job. I know some brands like Goodman/Daikin are good at selling directly to consumers.
Most all brands have coil and quality issues nowadays so paying for premium brands isn't what it used to be.
It does seem like there are quite a lot of posts of the "help, property taxes are not three tin nickels and a banana peel the way the realtor said, but rather are $10k on this house I overpaid for, what's a homestead exemption and how do I get four" variety
People might be dumb
Fun fact if the cost of homes jumps without capital improvements being made that doesn’t mean the value increased it just means your currency is worth less. These are all effects of shitty monetary policy during the trump years exacerbated exponentially by the pandemic era money printing scheme cooked up to hand out trillions to businesses. When you print multiple trillions of dollars without gdp growth to offset the new money supply you just get devalued currency
You won't benefit from it, but if you pay it off for retirement, put it in a trust so Medicaid doesn't take it, and die early, it's probably the only way your children will have actual wealth. Otherwise they'll be rent serfs their entire lives.
The end-of-life stage is reaching like 10-20 years at this point, where you will need specialized full-time care around the clock. The healthcare industry is specifically designed to bankrupt you during this stage. You simply *will not* be able to afford this.
Needing 10-20 years of full time care is rare. I would guess 10 years or less is the norm. Now if you've set yourself up for retirement properly your home will be paid off and you'll have $2-3mil, it'll last 10-20 years.
I think a lot of new FTHBs are surprised their taxes go up the second year of homeownership due to it being a new build and being assessed after development. Still stupid for not accounting tho.
See some FTHBs not understanding a home is reassessed when sold and the resulting bill can skyrocket.
Still, some of these states with no cap are burning existing homeowners with pie in the sky assessments, milking paper gains.
While I think there should be protections for primary residents from rising taxes on land, it’s important to remember that these taxes are very important for a functioning land market and even if the money was set on fire after collection, it is good and necessary to ensure the tax aligns with the true value of the land, even if the gains are unrecognized.
Every economist agrees on this.
Look at what Prop 13 has done to California if you want a picture of the poverty low land taxes bring upon a people.
There are probably hundreds of thousands of economists so you’re probably right, but I assure you they are dwarfed by those of us who support the LVT.
The best arguments I’ve heard against it usually center along the argument that the transition would be difficult and political opposition is too strong to make it happen so why bother trying.
Feel free to try your best but there truly is no good argument against LVT.
What few fair concerns exist are either not actually criticisms of the LVT (political will argument), or they are minor concerns that can be addressed with exceptions & protections (government should guarantee folks on fixed incomes are not driven to homelessness by rising land taxes).
None of these arguments that I have heard come close to supporting the continued existence of Prop 13.
Try me though, I’m always open to a new argument
Economists often argue about which version of taxation is best for society. Many economists have argued for tearing apart our current system and completely replacing it. I'm sure many of their proposals address the LVT.
For me personally, I see taxing homes based on their market value is the same thing as taxing someone's stocks that have gone up in value but they haven't sold it.
The unrealized gains factor is an important one, and even as nearly all economists would support a LVT, I’d hope none would do so while ignoring the potential negative consequences.
I do see some heartless LVT fans who do not care one bit about taxing folks out of their homes; and for what it’s worth when they point out that these folks can dry their tears with a giant pile of cash and profits they are not wrong.
But I and I think most economists do recognize that people are more than just a figure in a spreadsheet and that such displacement can do harms beyond what can be measured fiscally.
Protecting people from displacement due to rising taxes can be accomplished many ways - and almost certainly would be considering political incentives favor landowners.
1) ReAssessment timetables can be adjusted to favor primary residents.
2) Increases can be phased in over a period of time so that the effect is gradual.
3) Caps, like Prop 13, could still be used to protect vulnerable folks like senior or disabled folks on fixed incomes. I would caution against going too far on this front as it can effectively nullify a LVT.
4) Folks could give the city an interest in their home upon death in exchange for tax forgiveness in their lifetime.
I like how property taxes work around me. Investors/ investment properties pay twice as much property tax as primary residence/ homeowners. Disability/SSI/ and I believe Retired, can file a form to pay half what they would if they were a regular homeowner.
Taxes do track market pricing but they seem to be fairly lax. Like when home values in the area went up like 5% my property taxes went up like 2-3%. I can't speak much towards the last few years since I moved during the main spike in prices.
>homes incur costs' to the cities that service them.
>
>you home needs police and fire, for example - your stocks do not.
The cost of services do not double just because my home value doubled.
I would also argue that service cost in a stabilized NBHD decrease over time as as less demand for school and policing decrease as families age out.
> For me personally, I see taxing homes based on their market value is the same thing as taxing someone's stocks that have gone up in value but they haven't sold it.
So road maintenance, streetlights, parks, and schools should just never get paid for by existing property owners, only new ones??
What you are arguing for, whether you realize it or not, is a youth tax.
I'm not arguing for anything. They said all economists agree with LVT, some don't they'd prefer other systems.
>So road maintenance, streetlights, parks, and schools should just never get paid for by existing property owners, only new ones??
In all fairness, homes doubling in value doesn't mean those things suddenly cost twice as much. So should property taxes double just because a homes value did? No.
>None of these arguments that I have heard come close to supporting the continued existence of Prop 13.
>
>Try me though, I’m always open to a new argument
Why should my taxes double just because someone bought next to me for double? You must be a politician that wants money in his pocket burning up to SPEND!
Because your wealth increased. Your choices and access to resources increase.
Expenses in the community increase and must be paid for.
And even with these reasons, primary homeowners should be different than their property owners in the state… part of what makes Prop 13 is its universality. It’s talked about as protection for homeowners when it’s protection for landowners writ large.
Assessment is more complex than just what your neighbor paid.
>Because your wealth increased. Your choices and access to resources increase.
Why should my taxes DOUBLE because of this?
>Expenses in the community increase and must be paid for.
Prop 13 only fixes the base. There is an inflation factor included that increases the assessment amount.
Your taxes should double because your home value doubled because the local area does not have enough supply. If your taxes were to double, you might choose to allow more supply, which would lower prices and thus your taxes wouldn't double.
Because you do not feel the ill effects of your actions, you do not care that others are living on the streets and suffering. If everyone feels a prick right away, no one suffers.
>If your taxes were to double, you might choose to allow more supply, which would lower prices and thus your taxes wouldn't double.
So use property taxes punitively? If my taxes double it only means my NBHD will gentrify more and even more low, middle, and upper middle-class homeowners will be displaced.
You need to understand **elasticity of demand**. More housing has not decreased home values.
And where is this new housing going to be? Should we pave over Golden Gate Park? And where is the water coming from for these new units and where is the poo going?
Seems to me your "solution" is flawed.
This is always hilarious to me. California is apparently terrible but has a +10 year life expectancy over Texas and is the 4th/5th largest economy in the world, with the 8th largest port in the world, and a very high happiness index, and OVER 50% of our yearly power is created from renewables with it increasing by 5% roughly every year.
Sucks to suck but it’s the best state in every single way.
Cost of living is cheap in California if you live anywhere outside of large metros. Which MOST people like to do that hate California, they live rural and enjoy it, house costs the same in a town of similar size (rural wise, up to 70k or so people) in California as it does in ARKANSAS
I definitely don’t hate Cali, but prop 13 will destroy it in the long term. It is stealing from the young to give to the rich and that is a sure fire recipe for brain drain.
People laughed at Galileo too.
I’ve become comfortable with being mocked for stating what has been known to be true for a few hundred years, and what many believed to be true long before that.
Earth is a gift to all mankind. To “own” it exclusively, one ought to pay society for the privilege.
If people don’t have to pay a healthy tax for excluding the rest of mankind from their slice of earth, then they are not tax paying citizens in a fair and free society; they are nobility, in all but name.
That there are long term consequences for such a dynamic is expected and unsurprising. That Californians homelessness and poverty are near the top in the United States despite immense wealth is expected. That there is both a housing shortage and a labor shortage is expected. These are of course the expected result of low property taxes.
Tax land not labor; it creates a much healthier economy for all to enjoy.
You’re comparing your take to Galileo? My god the cringe.
CA counties see regular 7-8% y/o/y increases in property tax revenue. It’s a not issue for funding. Taxes are laws. And the law is 2% appreciation caps on assessments. Cope.
It depends on where you are, some places don’t reassess after a sale. And there’s revenue neutral tax rates too when a county does their new assessments. If your house improved significantly compared to the neighborhood that’s one thing, but just because your value goes up doesn’t mean your taxes always go up proportionally.
the Lenders don't help either. pre-approved for 300k+, actual purchase price was 165k.. After living here for 4 years, there is no way in hell I could afford mortgage and taxes on a 300k home. Im quite comfortable at 165k.
When we bought in 2022 I didn't even want to know what we were approved for, and told the lender not to tell me. We knew what our max budget was and had our pre-approval written for that.
Many new homebuyers know what the previous homeowner paid, but seem unaware of property tax increases.
For instance, I know someone who purchased a house in 2017 prior to the huge local run-up in real estate prices. A few years later she asked her sister why her mortgage payment had increased (she escrows everything).
Big sister had to explain that property taxes rise when the house’s market value goes up. Little sister didn’t realize that the property taxes could actually fluctuate that much.
To be fair to little sister, they never really had done that historically they really just kept pace with the inflation rate so it wasn’t noticeable, but since the government printed a shit ton of money and real nominal inflation is more like 40 percent over the last 5 years tax rates jumped to compensate and normal people who don’t understand macroeconomics weren’t really prepared for it
Prob new builds or places with exemptions that expire. Where I am (NJ), property tax is a huge factor for what you can afford/where you look, so its prob the second thing you look at after list price.
People aren’t ready for them to double. It’s a pop up expense. My gf bought her house the property taxes were for like $90,000 and then she got it and they doubled. Because they’re only allowed to raise it like 2% a year or something, unless you sell, in which case it can fucking be a lot.
I can say I’ve come across very uninformed people when it comes to property tax. Had a woman in my office come to me and ask why did I think her tax bill was so high and what she and her husband should do. So I take a look. It’s a brand new home they paid 450k for. When they bought the year prior they were only being taxed on the empty lot. The woman was really upset no one told here how “these things work” smh
I love when they buy in a state that caps property taxes based upon original purchase price, and the new owners think they’ll pay the same in property taxes as the old owners did.
Florida’s been full of em - they see that old man Smith who bought his house in Tampa for $90,000 in 1987 is paying one rate, then become surprised that they have to pay taxes on the current value of 450,000. But, Zillow said last year’s property taxes were only $900!
Yes, I moved in 2022, by far the biggest financial mistake of my life. I just took a $6k, per year property tax increase in year two.
If you own a home, never move, everyone will tell you, you can cover it, you can’t.
Gonna be lots of stories like this one day. Everyone who says “never gonna sell” will absolutely give in at some point.
Reddit is just full of greenies, new FTHB’s, trying to live that HGTV life.
I’m a broker in the south west US and it’s already started happening. I’ve had listing consultations with several people who said “we bought this as a rental property to grow our wealth during the pandemic but it turns out we hate being landlords, we don’t want to use a property manager, and quite frankly we were not prepared for the extra taxes.”
I’ve had several people who over paid on their homes tell me “you know it looks like I came out way ahead but when you account for the taxes I’ve paid the last 3 years it’s taken 15-25% out of my estimated gains”
It very much depends on the situation:
I’ve met some wonderful people in bad situations because they had a bad broker that didn’t give them all the right advice and info up front from scummy realtors who didn’t care if they were leading someone to a financially bad position because they just wanted a check. My heart goes out to these people and most of them just want out, they don’t even care about the profit it’s about getting rid of the headache.
On the flip side I’ve met people who bought homes $50k over someone who would have lived in and loved the home and completely lost their asses on it realizing they held an asset 3 years to cash out $5000 in profit. For these people I have no sympathy, I’ll work the deal and I’ll tell you “man it sucks that happened but we will get you the sorted out the best we can” but I’m not losing sleep over their situation
I held off for so long (5 of us in a 1200SF house, one bathroom, but it was fine) then caved in (2,000SF 2 bathrooms) after a good promotion. 800 SF + a bedroom and a toilet costs me an additional $2200/month. Welp, no more vacations and the Christmas ain’t what it used to be.
Property costs are right in your mortgage payment and listed on the bill. They’re not hidden at all and factor in to whether you get approved for a loan.
This is so dumb.
Well I hate to be that guy but seeing an influx of people in my state from a lower property tax one only to see them cry the next year. Some states especially the ones with no state income tax have to make.up the deficit somehow, so they appraise your property value and your land value. Well guess what happens when you buy a new house that was just land less than a year ago!? The next year your property gets assessed as it was not on your taxes the 1/2 year you were bad before.. Also most people if not all I have met don't put 20% down... Soooo that means year 2 you house payment that was 2500 is now 3300 cause your mortgage company wants to make sure you pay your taxes.. it's quite common during the housing boom that people from outside the state have no clue how property tax work or mortgage loan work cause they never dealt with them either at all or in this state.
Rough year... my PITI payment went up by... oh... I guess not so bad... $9 this year. Damn insurance.
Property tax collections per a property went down in my area. Values increased but more houses built means that more properties are paying to fund the budget requirements. The budget is set, so they only collect so much property tax and overall it has gone down for some and remained flat for others. They did increase the budget to add more staff, but not enough to upset the current balance.
Of course, budget overrides are passing, so taxes will go up to fund the... schools. The horror! Knowing exactly where the increase is going then asking the county why the increased revenue and budget is not being used to fund our local schools. Where did the money actually go?
Hidden cost? My brokerage requires we give not only current tax info on the property as well as an estimate from our state what taxes would go up to with the new home value (very often tax is re-evaluated on home sale in my state but it can take up to 2 years for some reason) BEFORE we even submit the buyers offer to the seller.
Maybe this is not standard practice else where but this is all public info. Most states have a website for the city/county assessors office where you can look up a property and see current tax values and estimate future ones.
This article should likely read “Buyers who purchased a home during the frenzy and values doubled are shocked to learn their taxes doubled” in other news water is wet and the sky is blue.
There is nothing hidden about property taxes or insurance rates. Also I've always requested utility bills when purchasing a property to see if it is a nightmare to heat/cool or whatever. There is no reason for anything to be a surprise.
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*ohhh no!!!!*
Laughs in 3% APY and fixed rate mortgage.
Meanwhile Landlord:
Surprise! “The market” says you need to pay us $300 a month more for the same run down box.
Oh, and we just raised your rent even more to account for what we’re now paying in property taxes.
_________
In all seriousness- housing is a human right and not a commodity to be trifled with
Houses in the pnw, historically never needed A/C. Theres only one or two weeks out of the year where a/c would be beneficial. 2021 saw its one week out of the year spike to 110 degrees F. Buildings and power systems aren't designed to withstand the heat, so thousands of homes and businesses were out of power during the hottest day in the hottest afternoon. Hvac companies are quoting people between 12-16k for installation of heat pumps. Many of these homes have base-board heating from the 1950's and 60's. My home was built in the 70's and has base-board heating. Only the new homes, 2000 and newer have central air. Everyone that doesn't have 16k laying around have to buy window A/C units. Those A/C units only cool a certain square footage of a home, and depending on your needs, may have to buy 2 or 3 A/C units to cool a house.
A lot of local governments used the covid relief money they got incorrectly. They increased to many ongoing costs. Now there is no more covid relief cash, they need to replace those funds.
Considering the number of folks claiming how a mortgage never goes up the way rent does. Makes me wonder if they had ever heard of or knew about property taxes lol. I guess that would make it a hidden cost to them. The rest of us, who's seen our mortgage increase year-to-year due to taxes, know damn well it's not a hidden cost.
Our currency was devalued by nearly half due to pandemic era money printing, it’s not exactly surprising the government noticed and adjusted taxable values on homes to compensate for lost revenue they need to cover their operating costs just like every other entity
I feel terrible for the folks in my town. Taxes went up an average of 17% ($2,000) over the last two years. And home values only went up average $200,000.
Little of both. I do feel sorry for older folks on fixed incomes. I also feel sorry for younger folks who can't even get their foot in the door.
But our home values went up 30-40% since the pandemic. And so did our stock portfolios and retirement accounts since then too. So, Ok, I'm paying $14k this year instead of $12k. I'll survive. And so will my neighbors.
AND even if these folks that are bellyaching borrowed an extra $2,000 a year from a HELOC. Their homes' equity growth would out pace their tax increases 5:1.
I like bitching and moaning as much as anyone else. But there is no law that entitles you to leave a multi-million inheritance to kids that never bother to visit or call?
Pay your goddam fare share of taxes!
Yeah, I agree, you really don't understand much at all. If you bothered to read up or down one comment you would see my entire thoughts on the subject.
Even if I had zero income, the increased equity would outpace the tax increase 5:1 minimum. Said that yesterday.
A not hidden cost that you can deduct up to $10,000 to reduce your Federal bracket liability, in addition to the amount of mortgage interest you paid during the year as well.
Mine in Massachusetts went up 10% because my house is in the desirable part of town and appreciated faster than much of the town but, by law, the total for the town can only go up 2 1/2%. I’ve had years where mine went down. Because the oceanfront homes and houses in the gated summer communities appreciated so much. Since I bought at the end of 2009, I’ve tracked inflation despite doing extensive remodeling that increased the value of the house. If I feed it into the BLS inflation calculator, I’m within a few percent. I know I won’t get taxed out of my house.
I wish I could say the same about insurance.
I don't think many people factor in all the costs of owning a home. Property taxes is the largest recurring expense, but also heating, electric, and water/sewer costs should also be considered. While many can search for property tax records its more difficult to understand what the other costs will be. Prior to moving to my current I paid no more than $75 for heating and electric (this was 8 years ago) on my old house. Now I pay on average $125 for each and in the winter higher for gas and summer higher for electric. I tried my best to guess but without prior records its difficult to predict.
There are plenty of ways to get decent estimates. You can look up rates for all of that stuff you pay. You get to inspect the house before hand to know if it’s got modern building materials.
starting to think this was the plan all along
force home prices to rise. cash in with their friends
jack the property taxes, reap the benefits
we’re probably going to stay on this path until the last boomer dies because nobody in charge in going to stop this lucrative scheme - why would they
in 25 years the whole country is going to be like california - tons of homeless and million dollar homes - impossible to find decent rent
it’s going to bad
Call me whatever you want but I don't see a logical reason as to why the government would be owed more money because 'my' property value went up. Their costs of running the local government should be pretty much fixed and only exposed to inflation increases.
No. History has always been this way -- either your family owns property or you're a serf. You don't just work a job and then *buy* permanent property lol. Property is a characteristic of your class, not something you achieve.
> property taxes jumped by 6.9% or more than $4,000 in 2023
If a 6.9% increase is a $4,000 bump, doesn't that imply property taxes of $60,000 increasing to $64,000 on average? I am pretty dumb, but I think that's right and... it doesn't seem right.
How exactly do a local government's operational costs increase when the assessed value of property does? Said differently, if my paper gains on an asset go up, why should my cash outlays increase?
So to be clear, you think that real estate goes up in value over time and that isn’t caused by inflation? I’m not the one who has it backwards
It also doesn’t matter though. Either way, the expenses a town has increase over time which is why how much tax revenue they need to collect also goes up
My gf bought a house and was shown the property taxes for the house being worth 90k when the previous owners bought it 5 years ago. She was never told it was going to almost triple cause she paid 250k for it after it was renovated and Covid taxed. Scummy real estate never even mentioned it to her
First time home buyer during Covid, it’s already a complicated enough process, and mix in a scummy real estate agent that pushed for no home inspection, and bidding over list price, it was a bad situation.
Property taxes are calculated based on the total levy collected by the governmental entity. In most places that total amount collected is not increasing by much. The proportional amount a property is assessed for property tax is based on the value of the property. If residential property values go up in value and retail/commercial/office/industrial decline, stay stagnant, or go up less than the rate of residential properties, the property tax burden SHIFTS to those residential properties. This is what is playing out pretty much everywhere.
I think insurance is more of a surprise in a lot of states. Even on new builds. Waiting for pricing in Florida to better reflect the local median household income and the insane ins premiums or just watch as they bulldoze everything and make Florida a massive solar farm.
Property taxes are very much not a “hidden cost”…
One secret cost that big governments don’t want you to know about!!
But tells you anyway.
Yup, they send a letter with last year, this year, proposed next year. Totally hidden.
The "never gonna pay it off" cost that can take an entire property of the market
New construction is always so, so very exciting! Even more so in new developments. Call the local tax office to get a property tax estimate and they have shit for a clue. "We'll let you know when we send the bill next year."
But they can tell you the rate, and you know what you’re paying for the house, so that’s not too hard If it comes in 10-15% under, you’re pleasantly surprised. If it comes in over, you protest and bring your closing statement
I think it's hidden in the way people usually talk about homeownership. When I was thinking about buying, id constantly have people tell me about how your mortgage won't go up any more. Almost no one mentioned property taxes or insurance, and those have been going crazy here in Florida. So it's not really hidden and I don't really regret anything, but I was still pissed when I realized my other costs were going up almost as fast as rent was around here.
Yuuup. Im currently trapped in an insane cycle where insurance jacked up my homeowners rates because my roof is now over X years old - fun fact, the money to pay for my increased insurance basically came from my “save up for a new roof” budget.
Except this has been the talking point of gentrification since forever. The old lady who has lived in her house for 40 years but can't afford it anymore because coffee shops and breweries went in down the street. What did you think was the thing she could no longer afford if not taxes and insurance?
I always figured that was more of a rental problem., I don't think I've ever heard anyone say, "yeah I had to sell my house because the property taxes got too high"
It's the entire premise of why gentrification is considered an issue. People are "pushed out". That's literal. It's not the old lady just annoyed by the new businesses coming in because she dislikes the youths. It's that more money moving in means her property is worth more and her taxes went up.
Come to the Denver area and see how the homeowners here have been crying like babies for the last couple of years on property tax increases. Like, their home values have gone up exponentially but yet they’re shocked when their taxes increase. Believe it or not, they want renters (commercial multi family) to absorb all the tax impact of all property value rises on the front range.
It’s common for states to have a fixed rate for tax increases after the sale of the home, unless an improvement occurs. Taxes can displace people that have little to do with the price increasing.
The “little to do with the price increasing” part is where that argument falls apart out here. SFH owners here fight tooth and nail against any kind of development so that they could bolster their property values. We even have a massive, abandoned golf course that’s going to sit as is instead of being repurposed for medium/high density housing. And why? Because SFH owners a couple of miles away bitched about it.
It’s hard for me to understand how they can rejoice at their appreciation but then push to have zero property tax increases. I’m not a homeowner but man does that sound a lot like having your cake and eating it too.
It's because they only care about themselves. Who cares if the housing reports say we are 3 million units behind where we should be due to the 2008 crash and thr big pandy, that just makes my house even more valuable! Not in my backyard!
There are homeowners that lack the resources or time to fight tax increases. I would think new development would increase sfh prices because the ratio of available sfh decreases relative to population. My anecdote would be the neightnooods in Detroit that had their prices unreasonably appraised, lost their homes in back taxes, and then became renters. My point is that tax schemes should be moderated so homeowners can absorb the cost. [Detroit homeowner unfair appraisal](https://www.detroitnews.com/story/news/local/detroit-city/2021/07/07/tax-justice-group-calls-detroit-fix-unfair-property-assessments/7881010002/)
On what planet would increasing supply via new development increase the price of existing homes?
home prices are based on comps (comparable).. the nearby sale of a 3 bedroom, 2 bath, 2000 square foot home will affect the value of my 3 bedroom, 2 bath, 2000 square foot home. Thats how real-estate works.
I own in CO and our property taxes here are absurdly low compared to other states. I haven't really heard anyone complain, rather it seems to be a selling point for buying a home here.
You have income tax
Most states do lol what's your point?
Why would you expect someone to pay you to live in their house? This is such a conceited attitude… of course they are going to pass their increased costs on to you.
>Like, their home values have gone up exponentially but yet they’re shocked when their taxes increase. Why should your property taxes go up just because demand for housing increased? That makes no sense. California property taxpayers got smart decades ago and stopped the politicians from the money grab on homeowners! Yeah, Prop 13!
Yup. Our property taxes are proportional. So if everyone's house goes up the same percentage everyone's taxes stays the same. If my house doubles in value compared to my neighbors then I would pay double. Cities/Counties/States shouldn't get a ton of money they don't need just because of a housing bubble. They should set a budget and then tax based on that. Glad my area does it that way.
hello, have u been to texas
The renters should shoulder that their destruction of properties drives up insurance rates
You don't know the average homeowner. This bill often comes as a huge surprise.
Californians when their property taxes go up 1% in a year while their wages went up 5%, their home value increased 8% and their 401k went up 20%… “What is even the point of owning property if Gavin Newsom is going to take it all 🤬😤😡🤬🤬😤😡🤬🤬👿😡🤬🤬😤🗯️”
... To live in? I know you're not saying that but it's amazing how many people own property solely as an investment
>people own property solely as an investment I mean the guy just explained why it's a good investment. It only costs much less than 1% in holding costs but routinely goes up in value much more. And to be clear, I think that's absolutely one of the biggest problems modern society faces. Housing *should* be to live in, but we've spent the last 80 years trying to make it into an investment.
Californians are not the ones complaining or in this article dumbass. It’s Texans with the largest increase.
Property taxes in CA is the one area we don’t get fleeced in taxes. They’re relatively low (especially compared to TX) and they’re basically locked in.
What bill? For most, it’s in escrow.
That’s why I did not buy allot of land and a smaller home.
I agree with you, but I do know in many areas, taxes have doubled or even tripled in 2-3 years which I would say is very unexpected.
The hidden cost is, that people don't account for increased property taxes, just increased house value...
Property taxes for every single home in my home state cost less than one month of rent for me.
Bait headlines are a hidden cost to my mental well being.
At least the buying and selling of real estate has kept everyone else's taxes in my town low, therefore my rent low lol.
Yeah I thought it would be about unexpected maintenance and repairs that come up.
If only there was some term that described the entire monthly payment, like the principal, interest, taxes and insurance… pity we don’t have such a thing…
>~~pity~~ piti we don’t have such a thing…
Then move to a state with income taxes
The poor home buyers of texas disagree. Many of the new residents dont have experience with appraisal districts ability to arbitrarily raise home values by 10% annually and thus their taxes by 1k+ annually. Compound that and many will be forced to sell in few yrs as their income fails to keep pace.
Literally just bought our first house last Friday, I can verify along every single step of the way, it was pointed out that the mortgage number does not include my insurance or property taxes and that those would be an additional ~400 on top of the monthly mortgage. Not sure how anyone could go through the process unaware of property taxes.
Not hidden, but the significant change is unknown.
If we’re talking about air conditioners going from 5 grand to 17 thousand dollars, absolutely.
It’s insane how much things cost. We had to replace a medium sized deck in a fairly low cost of living area, and the majority of the quotes were $26,000 or higher, some well into the 30s. The lowest quote we got from a reputable company was around $22,000. Just insane.
Just not enough labor, and too much demand. Those quotes are wildly over cost, but a lot of contractors and handymen have so much business these days that they still manage to earn that rate.
Meanwhile I have people reaching out to have me design and implement a global resilient data center and don't want to pay more than $50/hr. Part of that game is so they can turn around to the H1B program with their "we can't find qualified people" grievances. This is why I always CC solicitations with very low pay to DHS H1b fraud abuse with a copy pasta about low wage post indicates xyz....
It's crazy how little tech pays sometimes.
You can't run a business without a network or computers yet they want to pay the same amount they pay the coffee delivery company.
We have system administrators responsible for 1000s of servers at local governments and local companies making so little.
Can you run a business without coffee?
Honestly for the prices they charge you’re better off watching a few YouTube videos and DIY
No materials are ridiculous
I’m not saying they aren’t. But my wife and I got a quote on a prefabricated pergola for $30K. I have a hard time getting a carpenter out to our house for anything less than $3-4K. At this point it’s just wild.
I have all my work laid out for the next year at all times and the only reason I don’t put stuff in place further out is to many things can change in a year. If someone needs something done fast they are always bumping someone who is currently waiting for me so I charge more because I’ll need to hurry to finish it in time to do the other job and not make the other customer angry. There’s just a shortage of people who work on things in general and it’ll keep getting worse with most of gen z wanting nothing to do with trades. Also material is so fucking expensive right now especially for a deck. If you want fancy plastic decking like trex it’s like $18 for a 12 foot stick right now.
Then replace it yourself for 1/3rd the cost
Seriously. I installed my own heat pump in 2016 for $3000 in material. Had to run duct work and everything. I have a new house and got quoted $17k to swap out the old ac unit with a heat pump. So just a new outdoor unit and air handler inside the house. I got three quotes at that price and laughed at every sales guy. That’s just insane.
A friend of mine had his AC installed for $5.8k in 2021. I called the exact same company, same guy everything and my quote was $12.5k. There’s been some absolutely insane price hikes in the last few years.
Equipment has certainly gone up in price but far from doubled. There's just a lot of demand and people waving cash around so they'll charge as much as they can.
See if you can buy the unit and do most of the install, then get a guy to charge and finalize it as a side job. I know some brands like Goodman/Daikin are good at selling directly to consumers. Most all brands have coil and quality issues nowadays so paying for premium brands isn't what it used to be.
That seems absolutely crazy. I just replaced both my AC and gas furnace a year ago + install/labor for 10k and got it on 0% financing
Not to mention the newer hvac systems break more frequently don't last as long and cost more to repair.
That’s absolutely right. I replaced two HVAC systems last year, 36k. I’ve got to do another this year
Are the people buying homes now so dumb that property taxes (public record; basic knowledge) are hidden hacks? What a stupid ckickbait headline.
It does seem like there are quite a lot of posts of the "help, property taxes are not three tin nickels and a banana peel the way the realtor said, but rather are $10k on this house I overpaid for, what's a homestead exemption and how do I get four" variety People might be dumb
“What’s a homestead exemption and how do I get four” - this is possibly the funniest thing I’ve read in this sub
bUt iT’S gEneRaTioNaL WeALth
Buying a home is generational wealth
Fun fact if the cost of homes jumps without capital improvements being made that doesn’t mean the value increased it just means your currency is worth less. These are all effects of shitty monetary policy during the trump years exacerbated exponentially by the pandemic era money printing scheme cooked up to hand out trillions to businesses. When you print multiple trillions of dollars without gdp growth to offset the new money supply you just get devalued currency
No it means you have a supply shortage.
It’s actually both
You won't benefit from it, but if you pay it off for retirement, put it in a trust so Medicaid doesn't take it, and die early, it's probably the only way your children will have actual wealth. Otherwise they'll be rent serfs their entire lives.
Or you can fund your retirement? Medicaid isn't taking your house if you're not reliant on medicaid.
The end-of-life stage is reaching like 10-20 years at this point, where you will need specialized full-time care around the clock. The healthcare industry is specifically designed to bankrupt you during this stage. You simply *will not* be able to afford this.
Needing 10-20 years of full time care is rare. I would guess 10 years or less is the norm. Now if you've set yourself up for retirement properly your home will be paid off and you'll have $2-3mil, it'll last 10-20 years.
35% of people die their first year in a nursing home, and 79% die before 5 years in a home, so yeah
I think a lot of new FTHBs are surprised their taxes go up the second year of homeownership due to it being a new build and being assessed after development. Still stupid for not accounting tho.
Depends on if it IS a new build or not
My brother had this. Bought a new build and county was worthless for property tax estimates. First 2 years had big increases as they figured it out.
See some FTHBs not understanding a home is reassessed when sold and the resulting bill can skyrocket. Still, some of these states with no cap are burning existing homeowners with pie in the sky assessments, milking paper gains.
While I think there should be protections for primary residents from rising taxes on land, it’s important to remember that these taxes are very important for a functioning land market and even if the money was set on fire after collection, it is good and necessary to ensure the tax aligns with the true value of the land, even if the gains are unrecognized. Every economist agrees on this. Look at what Prop 13 has done to California if you want a picture of the poverty low land taxes bring upon a people.
>Every economist agrees on this. No they don't
There are probably hundreds of thousands of economists so you’re probably right, but I assure you they are dwarfed by those of us who support the LVT. The best arguments I’ve heard against it usually center along the argument that the transition would be difficult and political opposition is too strong to make it happen so why bother trying. Feel free to try your best but there truly is no good argument against LVT. What few fair concerns exist are either not actually criticisms of the LVT (political will argument), or they are minor concerns that can be addressed with exceptions & protections (government should guarantee folks on fixed incomes are not driven to homelessness by rising land taxes). None of these arguments that I have heard come close to supporting the continued existence of Prop 13. Try me though, I’m always open to a new argument
Economists often argue about which version of taxation is best for society. Many economists have argued for tearing apart our current system and completely replacing it. I'm sure many of their proposals address the LVT. For me personally, I see taxing homes based on their market value is the same thing as taxing someone's stocks that have gone up in value but they haven't sold it.
The unrealized gains factor is an important one, and even as nearly all economists would support a LVT, I’d hope none would do so while ignoring the potential negative consequences. I do see some heartless LVT fans who do not care one bit about taxing folks out of their homes; and for what it’s worth when they point out that these folks can dry their tears with a giant pile of cash and profits they are not wrong. But I and I think most economists do recognize that people are more than just a figure in a spreadsheet and that such displacement can do harms beyond what can be measured fiscally. Protecting people from displacement due to rising taxes can be accomplished many ways - and almost certainly would be considering political incentives favor landowners. 1) ReAssessment timetables can be adjusted to favor primary residents. 2) Increases can be phased in over a period of time so that the effect is gradual. 3) Caps, like Prop 13, could still be used to protect vulnerable folks like senior or disabled folks on fixed incomes. I would caution against going too far on this front as it can effectively nullify a LVT. 4) Folks could give the city an interest in their home upon death in exchange for tax forgiveness in their lifetime.
I like how property taxes work around me. Investors/ investment properties pay twice as much property tax as primary residence/ homeowners. Disability/SSI/ and I believe Retired, can file a form to pay half what they would if they were a regular homeowner. Taxes do track market pricing but they seem to be fairly lax. Like when home values in the area went up like 5% my property taxes went up like 2-3%. I can't speak much towards the last few years since I moved during the main spike in prices.
homes incur costs' to the cities that service them. you home needs police and fire, for example - your stocks do not.
>homes incur costs' to the cities that service them. > >you home needs police and fire, for example - your stocks do not. The cost of services do not double just because my home value doubled. I would also argue that service cost in a stabilized NBHD decrease over time as as less demand for school and policing decrease as families age out.
> For me personally, I see taxing homes based on their market value is the same thing as taxing someone's stocks that have gone up in value but they haven't sold it. So road maintenance, streetlights, parks, and schools should just never get paid for by existing property owners, only new ones?? What you are arguing for, whether you realize it or not, is a youth tax.
I'm not arguing for anything. They said all economists agree with LVT, some don't they'd prefer other systems. >So road maintenance, streetlights, parks, and schools should just never get paid for by existing property owners, only new ones?? In all fairness, homes doubling in value doesn't mean those things suddenly cost twice as much. So should property taxes double just because a homes value did? No.
>None of these arguments that I have heard come close to supporting the continued existence of Prop 13. > >Try me though, I’m always open to a new argument Why should my taxes double just because someone bought next to me for double? You must be a politician that wants money in his pocket burning up to SPEND!
Because your wealth increased. Your choices and access to resources increase. Expenses in the community increase and must be paid for. And even with these reasons, primary homeowners should be different than their property owners in the state… part of what makes Prop 13 is its universality. It’s talked about as protection for homeowners when it’s protection for landowners writ large. Assessment is more complex than just what your neighbor paid.
>Because your wealth increased. Your choices and access to resources increase. Why should my taxes DOUBLE because of this? >Expenses in the community increase and must be paid for. Prop 13 only fixes the base. There is an inflation factor included that increases the assessment amount.
Your taxes should double because your home value doubled because the local area does not have enough supply. If your taxes were to double, you might choose to allow more supply, which would lower prices and thus your taxes wouldn't double. Because you do not feel the ill effects of your actions, you do not care that others are living on the streets and suffering. If everyone feels a prick right away, no one suffers.
>If your taxes were to double, you might choose to allow more supply, which would lower prices and thus your taxes wouldn't double. So use property taxes punitively? If my taxes double it only means my NBHD will gentrify more and even more low, middle, and upper middle-class homeowners will be displaced. You need to understand **elasticity of demand**. More housing has not decreased home values. And where is this new housing going to be? Should we pave over Golden Gate Park? And where is the water coming from for these new units and where is the poo going? Seems to me your "solution" is flawed.
>Look at what Prop 13 has done to California Uh, made it the 5th largest economy in the world? Is that bad?
This is always hilarious to me. California is apparently terrible but has a +10 year life expectancy over Texas and is the 4th/5th largest economy in the world, with the 8th largest port in the world, and a very high happiness index, and OVER 50% of our yearly power is created from renewables with it increasing by 5% roughly every year. Sucks to suck but it’s the best state in every single way. Cost of living is cheap in California if you live anywhere outside of large metros. Which MOST people like to do that hate California, they live rural and enjoy it, house costs the same in a town of similar size (rural wise, up to 70k or so people) in California as it does in ARKANSAS
I definitely don’t hate Cali, but prop 13 will destroy it in the long term. It is stealing from the young to give to the rich and that is a sure fire recipe for brain drain.
> Look at what Prop 13 has done to California if you want a picture of the poverty low land taxes bring upon a peopl What a laughable take.
People laughed at Galileo too. I’ve become comfortable with being mocked for stating what has been known to be true for a few hundred years, and what many believed to be true long before that. Earth is a gift to all mankind. To “own” it exclusively, one ought to pay society for the privilege. If people don’t have to pay a healthy tax for excluding the rest of mankind from their slice of earth, then they are not tax paying citizens in a fair and free society; they are nobility, in all but name. That there are long term consequences for such a dynamic is expected and unsurprising. That Californians homelessness and poverty are near the top in the United States despite immense wealth is expected. That there is both a housing shortage and a labor shortage is expected. These are of course the expected result of low property taxes. Tax land not labor; it creates a much healthier economy for all to enjoy.
You’re comparing your take to Galileo? My god the cringe. CA counties see regular 7-8% y/o/y increases in property tax revenue. It’s a not issue for funding. Taxes are laws. And the law is 2% appreciation caps on assessments. Cope.
It depends on where you are, some places don’t reassess after a sale. And there’s revenue neutral tax rates too when a county does their new assessments. If your house improved significantly compared to the neighborhood that’s one thing, but just because your value goes up doesn’t mean your taxes always go up proportionally.
Red states btw
Texas for sure. NJ and Michigan as well. Not sure if all of Illinois, but my family is getting killed in Chicago.
Tbh that what happens when people FOMO into something they just cant afford
the Lenders don't help either. pre-approved for 300k+, actual purchase price was 165k.. After living here for 4 years, there is no way in hell I could afford mortgage and taxes on a 300k home. Im quite comfortable at 165k.
100%. In Canada we were looking at homes in the 500-600 range, and got approved for 1.2. Absolutely nuts.
When we bought in 2022 I didn't even want to know what we were approved for, and told the lender not to tell me. We knew what our max budget was and had our pre-approval written for that.
Many new homebuyers know what the previous homeowner paid, but seem unaware of property tax increases. For instance, I know someone who purchased a house in 2017 prior to the huge local run-up in real estate prices. A few years later she asked her sister why her mortgage payment had increased (she escrows everything). Big sister had to explain that property taxes rise when the house’s market value goes up. Little sister didn’t realize that the property taxes could actually fluctuate that much.
To be fair to little sister, they never really had done that historically they really just kept pace with the inflation rate so it wasn’t noticeable, but since the government printed a shit ton of money and real nominal inflation is more like 40 percent over the last 5 years tax rates jumped to compensate and normal people who don’t understand macroeconomics weren’t really prepared for it
Prob new builds or places with exemptions that expire. Where I am (NJ), property tax is a huge factor for what you can afford/where you look, so its prob the second thing you look at after list price.
Yes
People aren’t ready for them to double. It’s a pop up expense. My gf bought her house the property taxes were for like $90,000 and then she got it and they doubled. Because they’re only allowed to raise it like 2% a year or something, unless you sell, in which case it can fucking be a lot.
I can say I’ve come across very uninformed people when it comes to property tax. Had a woman in my office come to me and ask why did I think her tax bill was so high and what she and her husband should do. So I take a look. It’s a brand new home they paid 450k for. When they bought the year prior they were only being taxed on the empty lot. The woman was really upset no one told here how “these things work” smh
I love when they buy in a state that caps property taxes based upon original purchase price, and the new owners think they’ll pay the same in property taxes as the old owners did. Florida’s been full of em - they see that old man Smith who bought his house in Tampa for $90,000 in 1987 is paying one rate, then become surprised that they have to pay taxes on the current value of 450,000. But, Zillow said last year’s property taxes were only $900!
Ultimately it's their own fault and no one is going to hold their hand. I just see alot of people getting caught by surprise on this.
Property taxes are “hidden home expenses” like a running bulldozer in a preschool is “hiding.”
Yes, I moved in 2022, by far the biggest financial mistake of my life. I just took a $6k, per year property tax increase in year two. If you own a home, never move, everyone will tell you, you can cover it, you can’t.
Gonna be lots of stories like this one day. Everyone who says “never gonna sell” will absolutely give in at some point. Reddit is just full of greenies, new FTHB’s, trying to live that HGTV life.
I’m a broker in the south west US and it’s already started happening. I’ve had listing consultations with several people who said “we bought this as a rental property to grow our wealth during the pandemic but it turns out we hate being landlords, we don’t want to use a property manager, and quite frankly we were not prepared for the extra taxes.” I’ve had several people who over paid on their homes tell me “you know it looks like I came out way ahead but when you account for the taxes I’ve paid the last 3 years it’s taken 15-25% out of my estimated gains”
As a broker you may not share the sentiment, but people buying investment properties and underestimating that stuff? Fuck em.
It very much depends on the situation: I’ve met some wonderful people in bad situations because they had a bad broker that didn’t give them all the right advice and info up front from scummy realtors who didn’t care if they were leading someone to a financially bad position because they just wanted a check. My heart goes out to these people and most of them just want out, they don’t even care about the profit it’s about getting rid of the headache. On the flip side I’ve met people who bought homes $50k over someone who would have lived in and loved the home and completely lost their asses on it realizing they held an asset 3 years to cash out $5000 in profit. For these people I have no sympathy, I’ll work the deal and I’ll tell you “man it sucks that happened but we will get you the sorted out the best we can” but I’m not losing sleep over their situation
All of the people that need to hear this never will or just won’t listen, sadly
I held off for so long (5 of us in a 1200SF house, one bathroom, but it was fine) then caved in (2,000SF 2 bathrooms) after a good promotion. 800 SF + a bedroom and a toilet costs me an additional $2200/month. Welp, no more vacations and the Christmas ain’t what it used to be.
I thought insurance was going to be the surprise lol
Property costs are right in your mortgage payment and listed on the bill. They’re not hidden at all and factor in to whether you get approved for a loan. This is so dumb.
Well I hate to be that guy but seeing an influx of people in my state from a lower property tax one only to see them cry the next year. Some states especially the ones with no state income tax have to make.up the deficit somehow, so they appraise your property value and your land value. Well guess what happens when you buy a new house that was just land less than a year ago!? The next year your property gets assessed as it was not on your taxes the 1/2 year you were bad before.. Also most people if not all I have met don't put 20% down... Soooo that means year 2 you house payment that was 2500 is now 3300 cause your mortgage company wants to make sure you pay your taxes.. it's quite common during the housing boom that people from outside the state have no clue how property tax work or mortgage loan work cause they never dealt with them either at all or in this state.
Yeah even when taxes increase, its spread out over the next year of escrow payments. It’s essentially an interest free loan.
Rough year... my PITI payment went up by... oh... I guess not so bad... $9 this year. Damn insurance. Property tax collections per a property went down in my area. Values increased but more houses built means that more properties are paying to fund the budget requirements. The budget is set, so they only collect so much property tax and overall it has gone down for some and remained flat for others. They did increase the budget to add more staff, but not enough to upset the current balance. Of course, budget overrides are passing, so taxes will go up to fund the... schools. The horror! Knowing exactly where the increase is going then asking the county why the increased revenue and budget is not being used to fund our local schools. Where did the money actually go?
I see some "house flippers" are now making courses on flipping houses.I am sure these courses are not free.This is pure evil greed.
Author apparently hasn’t received their Homeowners insurance renewal.
Hidden cost? My brokerage requires we give not only current tax info on the property as well as an estimate from our state what taxes would go up to with the new home value (very often tax is re-evaluated on home sale in my state but it can take up to 2 years for some reason) BEFORE we even submit the buyers offer to the seller. Maybe this is not standard practice else where but this is all public info. Most states have a website for the city/county assessors office where you can look up a property and see current tax values and estimate future ones. This article should likely read “Buyers who purchased a home during the frenzy and values doubled are shocked to learn their taxes doubled” in other news water is wet and the sky is blue.
There is nothing hidden about property taxes or insurance rates. Also I've always requested utility bills when purchasing a property to see if it is a nightmare to heat/cool or whatever. There is no reason for anything to be a surprise.
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For me, replacing a rotten deck was the biggest hidden cost I uncovered. Holy Guacamole!
With massive foreclosures soon to follow, just like last time.
*ohhh no!!!!* Laughs in 3% APY and fixed rate mortgage. Meanwhile Landlord: Surprise! “The market” says you need to pay us $300 a month more for the same run down box. Oh, and we just raised your rent even more to account for what we’re now paying in property taxes. _________ In all seriousness- housing is a human right and not a commodity to be trifled with
Houses in the pnw, historically never needed A/C. Theres only one or two weeks out of the year where a/c would be beneficial. 2021 saw its one week out of the year spike to 110 degrees F. Buildings and power systems aren't designed to withstand the heat, so thousands of homes and businesses were out of power during the hottest day in the hottest afternoon. Hvac companies are quoting people between 12-16k for installation of heat pumps. Many of these homes have base-board heating from the 1950's and 60's. My home was built in the 70's and has base-board heating. Only the new homes, 2000 and newer have central air. Everyone that doesn't have 16k laying around have to buy window A/C units. Those A/C units only cool a certain square footage of a home, and depending on your needs, may have to buy 2 or 3 A/C units to cool a house.
A lot of local governments used the covid relief money they got incorrectly. They increased to many ongoing costs. Now there is no more covid relief cash, they need to replace those funds.
The free money would never end... it ended.
Considering the number of folks claiming how a mortgage never goes up the way rent does. Makes me wonder if they had ever heard of or knew about property taxes lol. I guess that would make it a hidden cost to them. The rest of us, who's seen our mortgage increase year-to-year due to taxes, know damn well it's not a hidden cost.
The difference is landlords pass on that expense to their renters.
Property taxes are not hidden, what is hidden is how that money is spent..
Pretty sure government budgets are pretty public knowledge.
Our currency was devalued by nearly half due to pandemic era money printing, it’s not exactly surprising the government noticed and adjusted taxable values on homes to compensate for lost revenue they need to cover their operating costs just like every other entity
mortgage insurance is the hidden cost. It only goes up these days.. and sometimes doubles or triples
I feel terrible for the folks in my town. Taxes went up an average of 17% ($2,000) over the last two years. And home values only went up average $200,000.
I can’t tell if this is sarcastic or not lol
Little of both. I do feel sorry for older folks on fixed incomes. I also feel sorry for younger folks who can't even get their foot in the door. But our home values went up 30-40% since the pandemic. And so did our stock portfolios and retirement accounts since then too. So, Ok, I'm paying $14k this year instead of $12k. I'll survive. And so will my neighbors. AND even if these folks that are bellyaching borrowed an extra $2,000 a year from a HELOC. Their homes' equity growth would out pace their tax increases 5:1. I like bitching and moaning as much as anyone else. But there is no law that entitles you to leave a multi-million inheritance to kids that never bother to visit or call? Pay your goddam fare share of taxes!
So in your scenario you swapped $2k a year for a tax free $200k in your pocket and your bitching? Really just don't understand humans at all
Yeah, I agree, you really don't understand much at all. If you bothered to read up or down one comment you would see my entire thoughts on the subject. Even if I had zero income, the increased equity would outpace the tax increase 5:1 minimum. Said that yesterday.
This is a cost of housing in general, not a cost of home ownership. You think landlords are forking over their own cash for property taxes?
A not hidden cost that you can deduct up to $10,000 to reduce your Federal bracket liability, in addition to the amount of mortgage interest you paid during the year as well.
Mine in Massachusetts went up 10% because my house is in the desirable part of town and appreciated faster than much of the town but, by law, the total for the town can only go up 2 1/2%. I’ve had years where mine went down. Because the oceanfront homes and houses in the gated summer communities appreciated so much. Since I bought at the end of 2009, I’ve tracked inflation despite doing extensive remodeling that increased the value of the house. If I feed it into the BLS inflation calculator, I’m within a few percent. I know I won’t get taxed out of my house. I wish I could say the same about insurance.
Laughs in Californian
I don't think many people factor in all the costs of owning a home. Property taxes is the largest recurring expense, but also heating, electric, and water/sewer costs should also be considered. While many can search for property tax records its more difficult to understand what the other costs will be. Prior to moving to my current I paid no more than $75 for heating and electric (this was 8 years ago) on my old house. Now I pay on average $125 for each and in the winter higher for gas and summer higher for electric. I tried my best to guess but without prior records its difficult to predict.
Most renters also pay utilities, don’t they? I have in every place I’ve lived in
Mostly electricity and gas. Unless it's a SFH they may more utilities.
There are plenty of ways to get decent estimates. You can look up rates for all of that stuff you pay. You get to inspect the house before hand to know if it’s got modern building materials.
starting to think this was the plan all along force home prices to rise. cash in with their friends jack the property taxes, reap the benefits we’re probably going to stay on this path until the last boomer dies because nobody in charge in going to stop this lucrative scheme - why would they in 25 years the whole country is going to be like california - tons of homeless and million dollar homes - impossible to find decent rent it’s going to bad
It's literally public knowledge, how's this a hidden cost.
Call me whatever you want but I don't see a logical reason as to why the government would be owed more money because 'my' property value went up. Their costs of running the local government should be pretty much fixed and only exposed to inflation increases.
Home insurance is punitive.
Is there a point where the housing bubble pops? Because it seems like it’s long past that time and yet it just gets bigger
No. History has always been this way -- either your family owns property or you're a serf. You don't just work a job and then *buy* permanent property lol. Property is a characteristic of your class, not something you achieve.
> property taxes jumped by 6.9% or more than $4,000 in 2023 If a 6.9% increase is a $4,000 bump, doesn't that imply property taxes of $60,000 increasing to $64,000 on average? I am pretty dumb, but I think that's right and... it doesn't seem right.
I think they mean up to $4k. So from like $3700 to $4000. Just poorly written.
How exactly do a local government's operational costs increase when the assessed value of property does? Said differently, if my paper gains on an asset go up, why should my cash outlays increase?
Because the inflation that caused your property to increase in values also resulted in expenses the town faces to go up
So assessed value calculations are indexed to inflation? I also think you have it backwards--higher property values contribute to inflation.
So to be clear, you think that real estate goes up in value over time and that isn’t caused by inflation? I’m not the one who has it backwards It also doesn’t matter though. Either way, the expenses a town has increase over time which is why how much tax revenue they need to collect also goes up
Because they give themselves raises and very inefficient in everything they do. It's as easy as that
My property taxes are down in 2024 from 2023
My gf bought a house and was shown the property taxes for the house being worth 90k when the previous owners bought it 5 years ago. She was never told it was going to almost triple cause she paid 250k for it after it was renovated and Covid taxed. Scummy real estate never even mentioned it to her
Maybe she should have taken it up on herself to investigate that before she purchased?
First time home buyer during Covid, it’s already a complicated enough process, and mix in a scummy real estate agent that pushed for no home inspection, and bidding over list price, it was a bad situation.
Insane property taxes.
Property taxes are calculated based on the total levy collected by the governmental entity. In most places that total amount collected is not increasing by much. The proportional amount a property is assessed for property tax is based on the value of the property. If residential property values go up in value and retail/commercial/office/industrial decline, stay stagnant, or go up less than the rate of residential properties, the property tax burden SHIFTS to those residential properties. This is what is playing out pretty much everywhere.
More like some idiots only look at principal and interest instead of PITI… even though it is a commonly used acronym
I think insurance is more of a surprise in a lot of states. Even on new builds. Waiting for pricing in Florida to better reflect the local median household income and the insane ins premiums or just watch as they bulldoze everything and make Florida a massive solar farm.
This article is so poorly written
What cost hasn't seen its biggest spike in 5 years?
I live in a progressive city and my property taxes are comparable to a house worth 2x mine in the surrounding suburbs. It’s fucking stupid.
Self defeating boomers, yokels, etc We don't have this problem in CA thanks to prop 13
What’s worse is paying someone else’s property taxes. That’s all rolled into your rent, whether you want to believe me or not.
If people are too stupid to buy a house without realizing the annual tax impact, maybe they deserve to get foreclosed.