Rising Property Taxes...When will having no state income tax no longer matter? (Houston: real estate, how much)

[lakeside15]

Originally Posted by serger

Kind of getting there. Say house 3x household income, 2.5% property tax rate -> equivalent to 7.5% tax on ALL income. And then factor in the 10% yearly increase.

This exactly. We are already there. A 7.5% income tax in this example would be in the top 10 of highest state income taxes in the country.


Property taxes like we have are terrible for a lot of people. With rising property rates over time, the taxes are guaranteed to go up, even though income may not go up accordingly. For retirees, this burden is even worse, since property taxes continue to rise without any additional earning power, though the school portion of taxes is capped after age 65. And if you ever lose your job or can't work for some reason, the taxes are still due even though you have zero income.


The recent run-up in property values has made property taxes more of an issue politically, but it remains to be seen whether any change will be made. My guess is not.

[BigDGeek]

Originally Posted by CREW747

Agreed...Take a sate like Colorado with a set income tax rate,significantly lower property tax rate,much better weather/scenery,same salary potential.When will people start not choosing this area since the cost of living has changed so drastically in the past few years?

We'd already be there if the job market was better.

Denver's job market is pretty good, but housing costs are very high there and traffic is pretty bad.

Colorado Springs is way cheaper and has like...NO traffic...but its job market is pretty poor (at least for what we do).

SLC (I know it's in Utah) used to be the best of both worlds but its housing costs are skyrocketing.

Honestly, I don't know where we'll end up when we leave. We'll cross that bridge when we come to it. We're not able to leave yet.

[EDS_]

Originally Posted by SolarCoaster

https://www.zillow.com/homes/for_sal...93_rect/10_zm/?


$1,360 a month all in, for a house built in the early 50s in a bad part of town, right at the $220 mark


https://www.zillow.com/homes/for_sal.../12_zm/0_mmm/?


$1,546 a month all in, for a house that is being built as I speak, in a great part of town, at the $340 mark


$200 more a month for a house that's listed at more than 150% the Irving property, and once the house is paid off the property taxes are astronomically cheaper. Factor in the maintenance and repairs saved by having a SIXTY TWO YEAR NEWER house, and the property in CA is better


The sqft difference is meaningless, I live alone and have no friends

Square foot change is not meaningless to most people.

[EDS_]

Originally Posted by lakeside15

This exactly. We are already there. A 7.5% income tax in this example would be in the top 10 of highest state income taxes in the country.


Property taxes like we have are terrible for a lot of people. With rising property rates over time, the taxes are guaranteed to go up, even though income may not go up accordingly. For retirees, this burden is even worse, since property taxes continue to rise without any additional earning power, though the school portion of taxes is capped after age 65. And if you ever lose your job or can't work for some reason, the taxes are still due even though you have zero income.


The recent run-up in property values has made property taxes more of an issue politically, but it remains to be seen whether any change will be made. My guess is not.

The problem is his math is way off. Most people do not fit within his numbers not even close.

[EDS_]

Originally Posted by BigDGeek

We'd already be there if the job market was better.

Denver's job market is pretty good, but housing costs are very high there and traffic is pretty bad.

Colorado Springs is way cheaper and has like...NO traffic...but its job market is pretty poor (at least for what we do).

SLC (I know it's in Utah) used to be the best of both worlds but its housing costs are skyrocketing.

Honestly, I don't know where we'll end up when we leave. We'll cross that bridge when we come to it. We're not able to leave yet.

Take a look at Nashville.

[calgirlinnc]

Originally Posted by CREW747

Texas definitely has a lot more to offer than states like Illinois or New Jersey.But will states like Tennessee and South Carolina start attracting more people than the DFW area due to the rapidly increasing costs of homeownership here?Weather and scenery is better,cost of living is lower...

The areas around Greenville, SC and coastal SC (Charleston, Hilton Head, etc.) have beautiful scenery but the rest of the state does NOT. Between the fall line and the coast it is flatter than Dallas and HOT. Columbia SC has heat and humidity. The upstate of SC has 4 seasons but the rest of SC not so much. So I'm not sure that SC is the best example for you to use.

I really don't understand all the complaints on this board that Texas isn't pretty to look at. Sure it's not the Pacific coast or Tuscany, but don't people WORK? When you're in your office building or wherever, are you really upset because there isn't enough scenery? I personally would love to live in Hawaii, but my husband's line of work is not found in Hawaii.

I didn't particularly care for all the commercial buildings so very visible from the interstate around Dallas, but many of the towns we visited were very nice! Landscaping, an effort to set the stores farther back from the road, new stores...what's not to like?

[serger]

Originally Posted by EDS_

The problem is his math is way off. Most people do not fit within his numbers not even close.

Well, I don't know, for a "middle class" household seems like I reasonable assumption. Now, obviously it does not prorate to very high income levels. If somebody is making 10mil, they don't have to buy a 30 mil house....

[EDS_]

Originally Posted by SolarCoaster

Good thing it's extraneous to the comparison, which is that a house which is 150% more expensive in CA and built today is extremely comparable (and better in most ways) to a 65 year old house here

It's not extraneous in any way. An apples to apples comparison would be to compare overall state imposed tax burdens between Sac. and around here at your income and then apply those results to similar homes in both places in similar cities. You are doing none of that. It may well be that in your particular case your all in home cost would be better in Sac. than around here. However, that isn't the point you are trying to make.

[lakeside15]

Originally Posted by EDS_

The problem is his math is way off. Most people do not fit within his numbers not even close.

Average home price in DFW is $237,500 now compared to average household income of $60k. That's a home value of 4X of income, on average, so the numbers are actually much worse for the DFW area. State-wide, house price to income is more like 3X.


Property taxes in DFW are around 2.2%-2.8%, if you include the homestead exemption discount, so 2.5% is not that far off depending on where you live. Statewide, tax rates are around 2%.


Property taxes are a huge burden, unless your home value is low relative to your income. With rising property values, this ratio is not necessarily under an individual's control even if you were to purchase a lower value house relative to income.

[EDS_]

Originally Posted by lakeside15

Average home price in DFW is $237,500 now compared to average household income of $60k. That's a home value of 4X of income, on average, so the numbers are actually much worse for the DFW area. State-wide, house price to income is more like 3X.


Property taxes in DFW are around 2.2%-2.8%, if you include the homestead exemption discount, so 2.5% is not that far off depending on where you live. Statewide, tax rates are around 2%.


Property taxes are a huge burden, unless your home value is low relative to your income. With rising property values, this ratio is not necessarily under an individual's control even if you were to purchase a lower value house relative to income.

The average effective property tax load in Texas is right at 1.91%. In Dallas it's 2.17 or 2.18% and people are taxed on their assessed value not actual value until a sale. The income numbers don't work either because, depending upon whom one believes home ownership in Texas is around 60% to 65% the rest rent. Renters have much lower incomes than home buyers. Ergo household income versus average home price is a fairly weak metric.

I get your point that property taxes alone can be and usually are a little regressive in nature. That does not change the fact that Texas ranks about 34/35 in overall tax burden as a percentage of income. And Dallas and area residents are taxed on average quite a bit lower than those in most peer cities all in.