Property tax issues (San Diego: section 8, sales, real estate)

[wCat]

Having done plenty of public records research over ten years, I have run across more than just a few people claiming HS (Homestead exemptions) for houses they are not living in (second home/vacation home) or are flat out renting. This is especially bad when it involves people from out of state where it's hard to verify property ownership....IE....owning HOMESTEADS elsewhere, and moving here buying and renting and claiming HS here. Real estate prices are climbing here and honest homeowners don't have saftey nets like proposition 13 (in California) to protect us from excalating property taxes. It's robbing the tax base here of valuable money for schools and other social services.

Anyone have any suggestions on how to correct this problem? Sylvia Romo's office has definitely gotten better with more info being available online and verifying deed records with the assessed property.....but there is still quite a bit of fraud.

I had a former landlady who put her second home in the name of her AWOL husband and not only claimed it was his Homestead (HS) but also got Disabled Vet (DV) and OV65 (Over 65) exemptions. He was in Nam came back to the states and never came home! That one took the cake.....I suppose she thought she deserved the break.

[jjuranko]

I'm from California and looking to move to SA for many reasons. One big drawback, (that will not stop me), is the property taxes. Wow! I am no politician, but couldn't Texas come up with a more equal way of raising money for schools and services? From what I understand there is no state income tax in Texas. But would it not be more equal if property taxes were lowered and state income taxes assessed so that everybody that works would share the burden of paying for all the schools and services needed, instead of just home owners? After all people who rent also use the schools and services and ect. Maybe I don't understand the way taxes in Texas are used. Anyway, other then the taxes I love SA and can not wait to live their!

[Steel Man]

wCat,

How about every other year you have to send a copy of your drivers license with the address of the place where you live to the county office?

jjuranko,

The largest chunk of property taxes (school) will be going down again this year. They are going down from $1.50 per $100 assessed value to $1.00. Of course, property values are going up each year, so that just about negates the lower school rate. Strange, but it seems most people in the Northside ISD area keep voting for bond issues every 3 years. Currently we're paying $0.275cents per $100 to pay off the last bond issue.

[EdgarAllanPogi]

Originally Posted by jjuranko

I'm from California and looking to move to SA for many reasons. One big drawback, (that will not stop me), is the property taxes. Wow! I am no politician, but couldn't Texas come up with a more equal way of raising money for schools and services? From what I understand there is no state income tax in Texas. But would it not be more equal if property taxes were lowered and state income taxes assessed so that everybody that works would share the burden of paying for all the schools and services needed, instead of just home owners? After all people who rent also use the schools and services and ect. Maybe I don't understand the way taxes in Texas are used. Anyway, other then the taxes I love SA and can not wait to live their!

Properties tax are pretty high over here! I just recently moved to SA from CA and my monthly property tax bill will be close to $900 That's almost like 2 mortgages!

I realize there is no state income tax here, but in CA state tax is practically nothing. Looking at my wifes paystub with a $1420 net, CA state tax deduction is a whopping $9. I was paying only $3000/yr for property tax on a $700k home. Sales tax in San Diego is also cheaper @ 7.75%. I just don't get it.

I know there is a future tax reduction coming up, but I don't really see any savings because of yearly assessments. Oh well.

[hello13685]

Yes, I hope Texas finds another way to tax people. I think that an income tax would be an excellent idea. Jjuranko, I believe that taxes are factored into rent rates, so renters are paying too.

[fierce_flawless]

Originally Posted by hello13685

Yes, I hope Texas finds another way to tax people. I think that an income tax would be an excellent idea. Jjuranko, I believe that taxes are factored into rent rates, so renters are paying too.

I'm pretty sure they are. I can't imagine owning a rental property and NOT factoring that into the rental rates. Rent is decent but once you need a 3 bedroom or larger forget it, it's cheaper to buy, or about equal anyway.

Of course I guess if someone has a paid-for property then they can charge less in rent and still cover the property taxes...

but yeah, I'm looking at super cheap, very modest homes to buy, and the property taxes have scared me away from more than one home already. I'll find equal square footage, equal price, but one in a "trendier" area with DOUBLE the yearly property tax. When you are paying $75,000 for a house, $200 a month towards taxes is a lot, proportionately!! If I buy something for $75000 and put $10,000 down and have a payment of $454 on the loan, then pay another $200 in taxes and insurance...well, I dunno, but that seems crazy! It's half of another house payment.

I do know of people who have paid their homes off after 30 years and entered retirement, had some trouble, and lost their homes for lack of ability to pay the taxes, even with HS and Over 65 exemptions. That's sad.

[EdgarAllanPogi]

Originally Posted by hello13685

Yes, I hope Texas finds another way to tax people. I think that an income tax would be an excellent idea. Jjuranko, I believe that taxes are factored into rent rates, so renters are paying too.

Tenants do not pay for the property tax. And if they were factored in you wouldn't be able to rent it out bacause it would be out of the range of comparables. That's why owning rental property in TX is a cash flow killer due to the high taxes.

[fierce_flawless]

Originally Posted by m95roadster

Tenants do not pay for the property tax. And if they were factored in you wouldn't be able to rent it out bacause it would be out of the range of comparables. That's why owning rental property in TX is a cash flow killer due to the high taxes.

How do you figure this, if your rental property is mortgaged, you gotta pay the mortgage and taxes and make some over and above that (plus repairs)....??

This makes no sense. There are plenty of people with rental properties that carry a mortgage. The trick seems to be to refuse to fix anything unless forced to by the courts.. Texas is very tenant-unfriendly.

Buy it cheap, do marginal repairs, factor in property taxes and the mortgage and still make a profit because you are the only one in town with a 3 bedroom available....

or do like my last landlady, and go Section 8 even though it in no way qualifies (unsafe, code violations) so you can charge $850 a month for your 3 bedroom hellhole.

Even if your property isn't financed and you paid it off or paid cash for it, how can you *not* factor property taxes into how much you'll charge? You have to at least cover the taxes AND make some money or what's the point? Public service?

[EdgarAllanPogi]

Originally Posted by fierce_flawless

How do you figure this, if your rental property is mortgaged, you gotta pay the mortgage and taxes and make some over and above that (plus repairs)....??

This makes no sense. There are plenty of people with rental properties that carry a mortgage. The trick seems to be to refuse to fix anything unless forced to by the courts.. Texas is very tenant-unfriendly.

Buy it cheap, do marginal repairs, factor in property taxes and the mortgage and still make a profit because you are the only one in town with a 3 bedroom available....

or do like my last landlady, and go Section 8 even though it in no way qualifies (unsafe, code violations) so you can charge $850 a month for your 3 bedroom hellhole.

Even if your property isn't financed and you paid it off or paid cash for it, how can you *not* factor property taxes into how much you'll charge? You have to at least cover the taxes AND make some money or what's the point? Public service?

There's more expenses than just PITI. If you go with say the median price in SA of about $140k with 20% down, you're looking at negative cashflow.

Purchase price: $140,000 with 20% down
Mortgage Balance: $112,000

Rental income: $1200/mo - $14400/yr

Expenses:
Debt Service (mortgage): $745/mo - $8940/yr
Taxes: $4200/yr
Insurance: $960/yr
Vacancy Factor of 5% (conservative): $720/yr
Total: $14820
Cash Return: -$420

Keep in mind this does not include repairs/maintenance, management, advertising, water utilities, accounting, legal expenses, and most importantly your time.

I am not trying to be negative here, but this is the reality of owning rental property.

[Navshirereeve]

If you have 500,000 bexar county homeowners paying an average of $3000 in property taxes, that comes out to $1,500,000,000. I mean, damn, with that kind of money, the streets should be paved in gold but yet the infrastructure of the freeways are just awful. With a population of about 26 million and half of them being homeowners, and with the property taxes they pay, this state should never be in the red but yet somehow it is.