Property taxes - Why so high? (Austin, Lakeway: houses, safe area, to buy)

[woodinvilleguy]

IMHO, I prefer the tax structure we have. I knew the tax burden and chose the amount I want to pay by choosing the value of the house I live in. It was the responsible thing to do. Income tax sucks big time, basically you are penalized if you make more rather than a usage tax based on what you use. A national sales tax and now income tax would be my option.

I never quite understood the steal from the rich to pay for the poor in Robin Hood either.

[hoffdano]

Skeptical - I think the distaste Texans have for a state income tax is driven primarily by a desire to always make it hard for legislators to spend money. If we believed it was possible to enact - say a 2% income tax - and keep it there - maybe Texans would accept that as a tradeoff against other taxes.

But many of us don't trust legislators - and do not want them to spend any more money than necessary.

You mention deductibles. Honestly I don't think there should be any. Modifying behavior, rewarding certain tax schemes, etc. is a distateful part of today's government. I think you should buy a house because you want one, not because you get a tax deduction. Why should both the federal government and state government offer deductions for the same thing? You already get to deduct state income taxes from the federal return. It is simply another contributor to a ridiculously complex tax code.

[TexasHorseLady]

Originally Posted by austin-steve

Skeptical,

Just curious, were you attracted to Austin because you have family here? (That's what brought my parents here after retirement).

If not, why Austin? You are articulate and certainly demonstrate the capacity to analyze and evaluate cost/benefit questions, and somehow Austin, even with high property taxes, beat out all the other places you could have chosen, including ones that have a total tax structure more to your liking.

Steve

This. And, if Arizona is so much better, why are you here?

By the way, this moving to a place and then trying to change it to suit your personal preferences over the way the folks already there are happy with it smacks more than a little of someone marrying a person with the idea that they are going to somehow change them into something preferable.

[Skeptical]

Originally Posted by TexasHorseLady

This. And, if Arizona is so much better, why are you here?

By the way, this moving to a place and then trying to change it to suit your personal preferences over the way the folks already there are happy with it smacks more than a little of someone marrying a person with the idea that they are going to somehow change them into something preferable.

Moderator cut: personalI'm in Texas because of family, nothing else. Also, status quo is not always the best for everyone. Things change, although some people apparently do not!

Skeptical

[Skeptical]

Originally Posted by woodinvilleguy

IMHO, I prefer the tax structure we have. I knew the tax burden and chose the amount I want to pay by choosing the value of the house I live in. It was the responsible thing to do. Income tax sucks big time, basically you are penalized if you make more rather than a usage tax based on what you use. A national sales tax and now income tax would be my option.

I never quite understood the steal from the rich to pay for the poor in Robin Hood either.

I, too, would prefer a national sales tax. But corporations don't like it because it cuts into sales and their profits. So, as long as corporations are running the country as they seem to be now, a national sales tax is nothing but a pipe dream.

And, I'm not advocating steal from the rich to pay for the poor. I'm merely saying let's make the burden a little more equitable.

Skeptical

[jobert]

Originally Posted by Skeptical

Coming from Phoenix, where I was employed, my state income tax and property tax combined was less than my property tax alone in Texas.

...and this is part of the reason why the state of Arizona had to auction off government buildings last December (at firesale prices) to avoid default - nice.

Originally Posted by Skeptical

The house in Phoenix was worth twice my house in Austin that I just purchased and my income was more than 5 times what it is now.

and what is that house worth now?

Is that awesome 5X salary job that you're bragging about still exist?

[Skeptical]

Originally Posted by jobert

...and This is why the state of Arizona had to auction off government buildings last December (at firesale prices) to avoid default - nice.

I'm sure that's the ONLY reason they had to auction off government buildings...

and what is that house worth now? Is that awesome job you're bragging about still exist?

I retired... wasn't bragging about the job, just making a point...

Skeptical

[austin-steve]

Let's simmer down. I like the questions Skeptical is raising and the points he's making. I don't necessarily agree, but it's an interesting discussion if it remains on topic.
Steve

[Trainwreck20]

a) Two income family in a modest house - property tax is a win situation.
b) One income family in a big/valuable house - property tax is a lose situation.

Then there are all the other permutations, but in any case, we chose option 'a' and are more than happy with the tax situation when we look at the big picture. Yes, I hate to think I will never stop 'paying' on my house, but I do like that I will not be paying state income tax ever (I hope). I did the math a while back, and although I forget the specific results, my family comes out way ahead with the property tax approach.

My in-laws are both retiring in the upcoming year and moving to central Texas (to be near the grandkids, mainly, but they have planned to retire here from long before that ), and property tax IS a big concern for them. They may end up paying more or less than where they are now (total tax burden), but currently they pay state income taxes in two states (using some wierd weighting method), an 'industrial park' income tax (ouch), and I think a city income tax, to go along with (much smaller than Texas) property tax. If nothing else, the Texas state property tax is more straight forward. Currently, there is a complex ratio of where they pay their taxes.

Personally, retiring to Texas does not look like a good idea from a strictly financial perspective - the 'freeze' on property taxes only applies to the school tax (I think) and only on your appraised value (not on the tax rate). Your income will presumably be less, so the income tax savings will be smaller. All in all, though, I will probably end up retiring here, seeing as I am somewhere right around the mathematical 'mid-life' point and haven't left yet .

My only gripe with the property tax in Texas is that the homeowners exemption should be much larger, maybe around 100k. This would mean that the tax rate would have to go up to maintain the same tax flow, but lower income families would see some relief. Or, the value of houses my shift somewhat naturally due to the tax change and that would result in more property tax money w/o a rate change.

[hound 109]

There's no way I'd live in Austin if (& when) i retire. The property tax rates along with the higher appraised values (relative to smaller towns outside of Austin) make it a no brainer for me.

I live here for work & because my kid is getting a private school quality education. When either of these things change (at most 8 years), I'll re-locate to someplace with a lower tax rate & where 150K buys me what 300K buys me here. (& i won't care as much about the schools).

Seperate, but kind of related topic - what gets me is that even with appraised values going up over the past decade & a half (understandable)...the RATE stays constant. (One would think that the rate would go down a little so the dollars paid would stay somewhat consistent....but no).

My opinion is that all current homeowners are subsidizing builders (&/or NEW home buyers) who are creating present or future infrastructure needs. (Mostly schools, but also roads, police, water etc.). If an infrastructure tax was paid by developers (or by the homebuyer of a new home at closing) then the tax RATE of existing homeowners would be more reasonable (& maybe nice people wouldn't have to move out of their rapidly appreciating home).

But i'm probably the only one who sees it this way. Builders build, create a need, & then everyone ELSE pays for the items that satisfies those needs. But i shouldn't let it bother me anymore, because i'll probably be out of here.