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Anyone ever done a cost projection with their property taxes, to see “what the future holds” at the current rate of year over year increases? Given an average historical year over year total tax bill increase of 5.5% (a not un-typical percentage), this is what will likely appear as the December tax bill on a house whose most recent tax bill (Dec. 2013) was $9424. (Amounts are the true taxes before any kind of STAR or other individual exemption might be applied. It also assumes that nothing has been added to the house that would increase the assessed valuation.)
2014 $9942
2015 $10,489
2016 $11,065
2017 $11,674
2018 $12,316
2019 $12,993
2020 $13,708
2021 $14,462
2022 $15,257
2023 $16,096
2024 $16,981 (ten years out = approximately a 70% increase)
2026 $18,900
2027 $19,939 (100% increase; taxes have now literally doubled in twelve years)
2028 $21,035
2029 $22,192
2030 $23,413
2031 $24,700
2032 $26,059
2033 $27,492
2034 $29,004 (twenty years out = taxes have almost tripled [$9942 x 3 = $29,826] )
2035 $30,599
2036 $32,281
2037 $34, 057
2038 $35,930
2039 $37,906
2040 $39,991 (twenty-six years out = taxes have quadrupled [$9942 x 4 = $39,768] )
If someone bought that house in 2014 with a 25-year mortgage, by the time they write the final check in early 2040 their true property taxes, under an annual 5.5% overall increase, will have quadrupled.
Seems impossible, doesn’t it? After all, it’s merely a 1300 sq ft, 3-bedroom, 2 bath, 1-car garage ranch on ½ acre… not even an inground pool… in a middle-class residential neighborhood, scarcely the Taj Mahal or a Gold Coast mansion. The notion of it EVER being taxed at almost $40K/yr is completely and utterly ridiculous. And yet… I’ve had personal experience of exactly this kind of creeping tax burden, on not one house but two, both built in the very early 1960s. On the first, which we bought in 1973 at a $2400 tax bill, the taxes were $10,300 when sold in 2002. Not a thing about the house was changed. On the second, the taxes literally doubled in 11 years; again, no taxable assessment changes. Both houses had their taxes grieved at least once; no reductions, because the assessment was deemed “fair”.
This kind of uncontrolled tax increase is what continues to push us baby boomers out of our homes/neighborhoods and off Long Island, away from our children and grandchildren. And aside from that, who in their right mind would WANT to pay twenty or thirty thousand dollars a year in taxes for that kind of a house, even if their salary could support it?!? It would be insane. The LI housing market would implode before that point. We would have inexorably become the new foreclosure capital of the USA, following in the footsteps of Las Vegas, Stockton CA, and parts of Florida. Yet, how could this scenario be avoided? Any thoughts?
Anyone ever done a cost projection with their property taxes, to see “what the future holds” at the current rate of year over year increases? Given an average historical year over year total tax bill increase of 5.5% (a not un-typical percentage), this is what will likely appear as the December tax bill on a house whose most recent tax bill (Dec. 2013) was $9424. (Amounts are the true taxes before any kind of STAR or other individual exemption might be applied. It also assumes that nothing has been added to the house that would increase the assessed valuation.)
2014 $9942
2015 $10,489
2016 $11,065
2017 $11,674
2018 $12,316
2019 $12,993
2020 $13,708
2021 $14,462
2022 $15,257
2023 $16,096
2024 $16,981 (ten years out = approximately a 70% increase)
2026 $18,900
2027 $19,939 (100% increase; taxes have now literally doubled in twelve years)
2028 $21,035
2029 $22,192
2030 $23,413
2031 $24,700
2032 $26,059
2033 $27,492
2034 $29,004 (twenty years out = taxes have almost tripled [$9942 x 3 = $29,826] )
2035 $30,599
2036 $32,281
2037 $34, 057
2038 $35,930
2039 $37,906
2040 $39,991 (twenty-six years out = taxes have quadrupled [$9942 x 4 = $39,768] )
If someone bought that house in 2014 with a 25-year mortgage, by the time they write the final check in early 2040 their true property taxes, under an annual 5.5% overall increase, will have quadrupled.
Seems impossible, doesn’t it? After all, it’s merely a 1300 sq ft, 3-bedroom, 2 bath, 1-car garage ranch on ½ acre… not even an inground pool… in a middle-class residential neighborhood, scarcely the Taj Mahal or a Gold Coast mansion. The notion of it EVER being taxed at almost $40K/yr is completely and utterly ridiculous. And yet… I’ve had personal experience of exactly this kind of creeping tax burden, on not one house but two, both built in the very early 1960s. On the first, which we bought in 1973 at a $2400 tax bill, the taxes were $10,300 when sold in 2002. Not a thing about the house was changed. On the second, the taxes literally doubled in 11 years; again, no taxable assessment changes. Both houses had their taxes grieved at least once; no reductions, because the assessment was deemed “fair”.
This kind of uncontrolled tax increase is what continues to push us baby boomers out of our homes/neighborhoods and off Long Island, away from our children and grandchildren. And aside from that, who in their right mind would WANT to pay twenty or thirty thousand dollars a year in taxes for that kind of a house, even if their salary could support it?!? It would be insane. The LI housing market would implode before that point. We would have inexorably become the new foreclosure capital of the USA, following in the footsteps of Las Vegas, Stockton CA, and parts of Florida. Yet, how could this scenario be avoided? Any thoughts?
Make Nassau have 1 unified school district and Suffolk have 1 unified school district too. Enough with all this village/town/city crap too. It should be 2 counties comprised of a couple hundred neighborhoods and that's it. It sounds cute on paper, but that's why you guys pay so much in taxes. One school district, one fire department, one police department, etc.
Also, focus on building up Hempstead and Riverhead.
__________________
"The man who sleeps on the floor, can never fall out of bed." -Martin Lawrence
I also think cracking down on illegal rentals needs to happen. There is too much of a tax burden for anyone to be able to send their kids to public school without paying their share of taxes.
And what will your total household income be in 25 years??
As a retiree who is living on Social Security plus (starting in five years) the minimum annual required distribution from a smallish IRA, I know what my income is going to be in any given year. I ran those numbers as part of my research on where to relocate from LI after seeing what's going to happen to the property taxes.
In 2027 when the projected taxes on the house are $19,939 my total gross income will be $40,574 which would leave me about $20K for everything else: food, gasoline, electricity, heat, medical expenses not covered by insurance, car repairs, home repair and maintenance, and all the stuff that hits us unexpectedly in our normal lives. A "normal' LI winter entails heating oil bills in the four figure range, as we all know.
And when that $39,991 tax bill would theoretically hit, in 26 years in 2040? Total income would be $44,413 because by that time all of what remains of my nest egg would be used up in trying to close the cash flow gap between income and cost of living including the property taxes.
I did the same projection using a hypothetical location elsewhere with current property taxes of $3000, at the same 5.5% annual increase, same income (because that will be the same no matter where I live), and even using the same high cost of living as we have here on LI. The taxes in that test location in 2040 will be $12,709. I wouldn't even have to start dipping into savings until 2031, whereas on LI all that money will be gone ten years after that point... eaten up by the taxes, mostly.
Make Nassau have 1 unified school district and Suffolk have 1 unified school district too. Enough with all this village/town/city crap too. It should be 2 counties comprised of a couple hundred neighborhoods and that's it. It sounds cute on paper, but that's why you guys pay so much in taxes. One school district, one fire department, one police department, etc.
Also, focus on building up Hempstead and Riverhead.
Unifying the school districts will not eliminate the root cause -- salaries, benefits, and pensions.
1. declare bankruptcy
2. clean house, revoke all liabilities.
3. start over
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