Property taxes...buying a home...help! (Austin, Howe: sale, neighborhood, school district)

[AustinDude360]

Originally Posted by sojourner77

If we lower the property tax rate, what would happen? Home values would rise of course, and the tax receipts would remain the same because of those higher valuations. Zero-sum.

Who does that lower-tax/higher value arrangement benefit? Not the homeowners who remain or move within town, they would just slosh the equity around.

Current homeowners that move out of Austin and take their money with them, would be the ones to see the benefit from lower tax rates. If we lower the tax rate, we will be just like California, as people leave and export their enhanced equity to other parts of the country.

At that point, we're screwed if we ever need to raise property taxes, just like CA.

When we screw ourselves over in TX we will move like Californians to areas like Arkansas, Tennessee, Georgia, etc and drive cost of living way up there .

[DMfan]

Originally Posted by sojourner77

I would prefer that we increase property tax revenue through higher rates, then ask voters which projects they want to spend that finite amount towards. The gratuitous bond elections are ridiculous.
.

The city did set up a system to get input on the types of projects that should receive more or less funding. They called it budget-in-a-box and had a few workgroups throughout the city and an online poll.
https://www.austintexas.gov/budgetbox



I did the online poll thing and thought it was a good start, but it didn't break down actual projects enough. It simply asked "should we spend more or less $$ on housing/roads/emergency services." Plus, in my mind, it's not what we spend the money on nor how much, but HOW EFFECTIVELY that money is used that is the real kicker. That's what our local government really needs to focus on.


Infographic of the results:
https://www.austintexas.gov/sites/de...phic_final.pdf

[scm53]

The city did set up a system to get input on the types of projects that should receive more or less funding. They called it budget-in-a-box and had a few workgroups throughout the city and an online poll.

Results:

There were no service areas where the most common funding decision was to pay 5% less than the current rate.

Which shows the banality of such undertakings.

[CBB_bear]

Originally Posted by 10scoachrick View Post
The money could come from somewhere else. What about all those so-called 'historic' properties and the commercial properties that are valued well below market? Why clobber a long-time homeowner just because the area around them has increased in popularity? What is it about their 50 year old homestead that makes them deserving of a disproportionate tax burden? Do they use more services? Receive special fire and police protection?
They own a valuable financial asset that has increased in value. Believe me, I know it sucks, the value of my home has exploded and for the first time, I could see possibly having to leave the house due to the tax burden over the next 20 years, but the chances of an income tax or VAT are very low, if you are going to run a system on property taxes . . . then, this is probably the way to do it. Texas and Austin in particular, have very few historic properties. Scrap the tax break and it wouldn't make any difference. Commercial properties are a different matter. But be careful what you wish for, might drive many local, iconic businesses out and leave us with nothing but chains backed by deep-pocketed corporations.

Yeah, I mean I think some combo of income tax, property tax, and VAT would probably work the best (and is more in line with how many other states do it), but also agree the chances of that happening are low. I guess what I find hard to sympathize with those people who have lived in their house for the past 50s years and feel feel the tax increases are "unfair" is that it is also "unfair" that they have won the game of real estate appreciation. A close in house bought 50 years ago would have cost maybe 20K, and now often might cost upwards of 700K, which means it has appreciated 4.5x the rate of inflation. They could sell and buy a house in a cheaper area (or even downsize to a condo in austin) easily and pay in cash, and just generally have the options that come with an increase in wealth.

[Aquitaine]

(and is more in line with how many other states do it

No state has a VAT (as opposed to a sales tax, which only applies at the point of sale)

Plenty of states have income taxes. They go up very easily...tough to get them down. Ask any of the horde of people who have fled states with 7, 8, 9, 10% tax rates and encyclopedia-sized tax forms to come to Texas.

Much as I can ever complain about my TCAD bill, it fits on a postcard.

[TexasHorseLady]

Originally Posted by CBB_bear

Yeah, I mean I think some combo of income tax, property tax, and VAT would probably work the best (and is more in line with how many other states do it), but also agree the chances of that happening are low. I guess what I find hard to sympathize with those people who have lived in their house for the past 50s years and feel feel the tax increases are "unfair" is that it is also "unfair" that they have won the game of real estate appreciation. A close in house bought 50 years ago would have cost maybe 20K, and now often might cost upwards of 700K, which means it has appreciated 4.5x the rate of inflation. They could sell and buy a house in a cheaper area (or even downsize to a condo in austin) easily and pay in cash, and just generally have the options that come with an increase in wealth.

So, if they've lived in their house for 50 years, have established a community, their friends and support system are all in the community THEY built, just like with gentrification, if they get pushed out of the life they've built due to dramatically higher taxes caused by people wanting to move into their community, your idea is that they should feel lucky because they can sell their house, uproot themselves from everything that makes their life worth living, and move somewhere cheaper? That about cover it?

[FalconheadWest]

Originally Posted by TexasHorseLady

So, if they've lived in their house for 50 years, have established a community, their friends and support system are all in the community THEY built, just like with gentrification, if they get pushed out of the life they've built due to dramatically higher taxes caused by people wanting to move into their community, your idea is that they should feel lucky because they can sell their house, uproot themselves from everything that makes their life worth living, and move somewhere cheaper? That about cover it?

If they have lived there 50 years, they have the over 65 exemption on the house which froze much of the higher taxes (as school taxes are typically the highest rate in every area), and they probably also requested for deferred tax payments so they don't have to pay them until they sell the house or die, so they won't get pushed out of the community.

[TexasHorseLady]

Originally Posted by FalconheadWest

If they have lived there 50 years, they have the over 65 exemption on the house which froze much of the higher taxes (as school taxes are typically the highest rate in every area), and they probably also requested for deferred tax payments so they don't have to pay them until they sell the house or die, so they won't get pushed out of the community.

Really? My experience as an actual over-65 with lots of friends who are likewise is that, yes, there's the over-65 freeze but I don't know of anyone personally who has taken the deferred tax payments, pushing that burden onto their heirs. You probably haven't run the figures on retirement expenses as recently as we have, if at all (you're still in the chlidrearing stage of life, after all, with its own priorities and even if you did, things will be very different by the time its applicable for you), but trust me, a lot of people are either having to sell or, in some cases I know, just figuring they're never going to be able to retire.

[sojourner77]

Retirees use the same services we all do. How should they be taxed?

[TexasHorseLady]

My point, which two of you missed so it clearly wasn't stated well enough, was that saying "They should be delighted that their house is worth so much more" doesn't take into account the fact that that "worth so much more" is of no value to them unless they sell and move. So if someone is established in the neighborhood and doesn't want to move after having lived there for 50 years and having a community and support system there, but may be forced to do so because of high taxes, that "worth so much more" is of no real benefit to them and is, in fact, a very real problem. Yes, services must be paid for, pretty much anyone who's lived in a house (or a society) for 50 years gets that and has probably been paying for them for longer than a lot of people in these discussions have been on the planet. But that doesn't mean that this particular situation is something they should be delighted about.