Is C.O.L. in TX really less? (Dallas, Plano: sales, real estate)

[Lakewooder]

mom I am laughing about the Baptist minister (actually we call them pastor or preacher). It even merits a "ROFL"!

[galore]

Of course, the ideal is low property taxes AND no state income tax AND low federal income taxes. But we are living in reality and not some dreamland.

This discussion is not about the virtues of high state income taxes. Duh!

It is about the tradeoff with property taxes. And if you think that paying some 2.5%, which is about $7500/year on a 300k home REGARDLESS of your income on a property that you own is ok then well, you think different from me...

Your income is NEVER secure. But your property tax will ALWAYS be due. Good luck, if something goes wrong with your retirement income and then you have to sell your house that you can own 100% free and clear because if you don't pay the property tax, you'll lose your house.

And sorry, I didn't research the ideology of motley fool. Supportive statistics are also on aarp, like Retirement Planning Survey Among U.S. Adults Age 40 and Older

But I guess aarp is "left wing liberal" too, LOL! Maybe you can enlighten us with some "fair and balanced" data?

[momof2dfw]

Originally Posted by Lakewooder

mom I am laughing about the Baptist minister (actually we call them pastor or preacher). It even merits a "ROFL"!

Yep, I always just said "preacher" but no one ever understood it or they have images of the tv kind. So yes folks, I'm a PGK and my mom is a PK. Oh, and this was back in the day when they made NOTHING!!! In other words the common phrase heard from church members was, "keep'em poor". No retirement of any kind either in that line of work. So they lived very happily on Social Security in a nice decent house(s) in their golden years. Actually their last home was brand new but it was in their hometown which is not in Dallas County but another county not too far from the big city of Dallas. And it was NOT a home that was valued at $300K, YIKES! Not even the house my parents just bought is up to that but it is about $75K more than the one they sold that was paid off.

[momof2dfw]

Another thing to consider about these property taxes is WHAT they pay for. They pay for us to have excellent facilities and city services. Retirees use city services just like everyone else and some even more than the younger citizens. Afterall they have the time to go to the senior center, play golf on the municipal course, take in a play at the local theater, etc. They also want the police and emergency responders to be quick to respond and be top notch. We all want our garbage picked up on the scheduled day and recycling programs are great. We like our streets, alleys and sidewalks to be in good condition. We like to see older neighborhoods, shopping centers and parks being revitalized - all possible because of grants from the city. Yes one of the highest rates is to the public schools. From what I've been reading on these forums is that our public schools are in MUCH better shape than those in states w/ low property taxes. Hmmm, let's see I think I'll take a good public school system w/ a slightly higher property tax rate over low property taxes and a horrible school system. Afterall these kids are our future. So the next time we wonder why our property taxes are what they are you only need to stop and look around at all the things provided to you because of those tax dollars.

[momof2dfw]

" And if you think that paying some 2.5%, which is about $7500/year on a 300k home "


That depends on the area. I looked up on Dallascad to see what homes in the $300K range are paying for 2007 in property taxes and your off. The property value range I looked up for homes in a desireable area backed up to a golf course was from $297K-$309K and their taxes ran the gamut from $5200-$6600. Not a HUGE difference but that is over $1000 LESS.

[lh_newbie]

Originally Posted by dfwyot

That article by"motley fool" is a biased piece of crap. If you call that backing up your point of view you are sorely mistaken. Motley fool is a well known adjuster of the facts and a left wing propaganda machine.

I actually did a little digging around based on that article and found that the median numbers there did jive with government research, so I can vouch that this particular statistic is indeed accurate. I don't usually take one article as a fact - I go to the source of their data to confirm and look for other sources also.

[SprintRider]

I guess I'm letting figures do a little too much dancing in my head, because I'm still a little shocked

People seem to throw out that TX desn't have a state income tax in rebuttal to gripes about the high property taxes. Let's say that TX had a state income tax and it was the same rate as CA.

A single person making 50K per year would pay around 2,500.00.
Now, let's say that since TX now has a state income tax, they've lowered the property tax to that of CA. : 1%

A 300K home would pay appx. 3,000.00

Add that to the 2,500 income tax and you have 5,500.00

Now, let's let's compare that with a 329K home in Cedar Hill for example.

The tax rate is about 2.58%. That would mean a tax of 8,488.00. A homestead exemption brings it down to 7,769.00.

7,769.00 minus 5,500.00 is 2,269.00.

So, although TX doesn't have state income taxes, you are still paying a higher percentage of taxes.

Now, the argument is that you can get a LOT more house in TX for 300K than you can in CA. I wholeheartedly agree!

The problem I have here is that there a are LOT of these 300K homes for sale in TX. AND the appreciation is nowhere near what it is in CA.

Let's take for example the 329K home used above.

It originally sold for 255K 19 years ago and is now selling for 329K.That's a 74K appreciation IF they get the asking price.

Now let's look at a 20 year old home in CA.

I know of a house (there's QUITE a few really, so take your pick) that sold for 125K 20 years ago and recently sold for 575K. That's a 450K appreciation in almost the same time.(By the way, that same home was locked into Prop 13)

I understand that the real estate market in CA right now is ludicrous to say the least and some are saying it's going to crash soon. Even if it DOES recede, it will NEVER do so to the same appreciation level as TX.

Anyway, the point I'm trying to make is that the whole "we don't pay state income taxes" argument doesn't wash. Sure, you CAN get a better home for your money in TX. Why do you think so many Californians are moving there? I'm told that the cost of living is less also but then again, the same people tell me that groceries, etc. are about equal. I'm also told that gas is a lot cheaper there. By how much? I mean, I'd have to buy one whole heck of a lot of gas to make up for the property tax.

After all is said and done, I'm convinced that TX is the place for me because I can sell my house here, buy a nice 300K house in TX and then bank 7-800K. THAT is what is appealing. NOT the fact that TX doesn't have state income tax.

[cdelena]

Originally Posted by SprintRider

I guess I'm letting figures do a little too much dancing in my head, because I'm still a little shocked

People seem to throw out that TX desn't have a state income tax in rebuttal to gripes about the high property taxes. Let's say that TX had a state income tax and it was the same rate as CA.

A single person making 50K per year would pay around 2,500.00.
Now, let's say that since TX now has a state income tax, they've lowered the property tax to that of CA. : 1%

A 300K home would pay appx. 3,000.00

Add that to the 2,500 income tax and you have 5,500.00

Now, let's let's compare that with a 329K home in Cedar Hill for example.

The tax rate is about 2.58%. That would mean a tax of 8,488.00. A homestead exemption brings it down to 7,769.00.

7,769.00 minus 5,500.00 is 2,269.00.

So, although TX doesn't have state income taxes, you are still paying a higher percentage of taxes.

Now, the argument is that you can get a LOT more house in TX for 300K than you can in CA. I wholeheartedly agree!

The problem I have here is that there a are LOT of these 300K homes for sale in TX. AND the appreciation is nowhere near what it is in CA.

Let's take for example the 329K home used above.

It originally sold for 255K 19 years ago and is now selling for 329K.That's a 74K appreciation IF they get the asking price.

Now let's look at a 20 year old home in CA.

I know of a house (there's QUITE a few really, so take your pick) that sold for 125K 20 years ago and recently sold for 575K. That's a 450K appreciation in almost the same time.(By the way, that same home was locked into Prop 13)

I understand that the real estate market in CA right now is ludicrous to say the least and some are saying it's going to crash soon. Even if it DOES recede, it will NEVER do so to the same appreciation level as TX.

Anyway, the point I'm trying to make is that the whole "we don't pay state income taxes" argument doesn't wash. Sure, you CAN get a better home for your money in TX. Why do you think so many Californians are moving there? I'm told that the cost of living is less also but then again, the same people tell me that groceries, etc. are about equal. I'm also told that gas is a lot cheaper there. By how much? I mean, I'd have to buy one whole heck of a lot of gas to make up for the property tax.

After all is said and done, I'm convinced that TX is the place for me because I can sell my house here, buy a nice 300K house in TX and then bank 7-800K. THAT is what is appealing. NOT the fact that TX doesn't have state income tax.

I think your numbers are sound and the logic makes sense to me. Texas has offered good employment and the opportunity for many to buy the home of their dreams...

But the COL is not as low as many want to think. Besides the property tax issue already discussed Texans pay a lot more for electricity (high need and high rates) and on the average more for HO insurance.

In retirement I do have a requirement for no income tax (IRA distributions are taxable) but wanted out of the Texas for a number or reasons and now live in Washington State (no income tax). Housing is about 30% higher than Texas but with lower property taxes, insurance, and utility costs I figure my actual COL is only 5 – 10% more than Texas… and I like the environment here better.

I think this thread has been a pretty informative discussion and will send folks here that have similar questions.

[KantLockeMeIn]

The median family income for Plano is $102,477 and median house price is $228,760. The median income for Irvine, CA is $97,592 and the median house price is 640,000.

Assuming medians, the income tax burden on the CA resident is 4,818.75 and the property tax, assuming new purchase, and 1.15% tax, would be 7,360. Grand total of 12,178.75.

Now in TX, again assuming medians and excluding homestead exemptions, and using a 2.38% tax rate, property tax is 5,444.49.

If you decide to live beyond your means, you'll owe more taxes. If you get a nice raise or promotion, you'll owe no more state taxes.

[Pintea]

I know that these charts can be quite deceiving and should be taken with a grain of salt, but I still can't see why electric bills (considering our kwh charges are very close) to be four and five times in Dallas as it is here.

[/quote]

It's probably the size of the house, the hot weather, and I know I freeze if I go to some people's homes...