Property taxes: how do you cope? (Seymour: foreclosed, for rent, mortgages)

[KathrynAragon]

Originally Posted by Lowexpectations

I pay roughly 1k a month in property taxes and it's just a cost of doing business. I'd rather that than state income tax though

Right on.

[Lowexpectations]

Originally Posted by KathrynAragon

So itemize - it's not difficult to do. It's a one page form. Super easy to fill out.

I'm aware but in order for it to be of benefit you have to exceed the standard deduction and a lot of homeowners do not thus the deductions are entirely irrelevant. Its close half of mortgage holders who do not itemize. Even when you itemize you only see a benefit at the point of which your deductions exceed the standard deduction not from the first dollar

[Trainwreck20]

Originally Posted by Lowexpectations

I'm aware but in order for it to be of benefit you have to exceed the standard deduction and a lot of homeowners do not thus the deductions are entirely irrelevant. Its close half of mortgage holders who do not itemize. Even when you itemize you only see a benefit at the point of which your deductions exceed the standard deduction not from the first dollar

We pay our taxes twice in one year and skip the next. In the year we don't pay taxes, we use the standard deduction and itemize in the year we double up. Interest is also deductible, so along with miscellaneous deductions it comes out quite beneficial for us.

[RooCeleste]

Originally Posted by Trainwreck20

We pay our taxes twice in one year and skip the next. In the year we don't pay taxes, we use the standard deduction and itemize in the year we double up. Interest is also deductible, so along with miscellaneous deductions it comes out quite beneficial for us.

This is an interesting concept.....I'm tempted to try it.

[leorah]

Originally Posted by Trainwreck20

We pay our taxes twice in one year and skip the next. In the year we don't pay taxes, we use the standard deduction and itemize in the year we double up. Interest is also deductible, so along with miscellaneous deductions it comes out quite beneficial for us.

We do the same thing; doubling up on taxes and carefully timing charitable contributions works well for us too.

[JH6]

TN may be a better deal for some folks. TX may be a better deal for some folks. Bottom line is are you happy where you are living?

I grew in in NY. We had highest taxes and expenses in the country (maybe second to NJ, but still high).

Coming to TX was a good move for us.

No income tax, saves me about 4-5k per year.

Property tax is $2800 on a 168k house with homestead. In NY, I was paying $2800 for a house that was valued at 48k (we lived in buffalo, not NYC). A family member just bought a house in NY valued at 70k, taxes are over $3500.

It is not uncommon to have a $8000-$10000 per year property tax bill for a decent house.

Also, NY has School Tax, Local Tax, Municipality Tax. TX property tax is one bill per year.

There are pros and cons. Pros are very low utility rates (not water but everything else). Cheap gas prices.

Seem to be higher food costs down here, and very high water rates.

To the folks saying to rent an apartment to avoid paying property taxes, that doesn't make sense in my case.

Bought my house in TX 5 years ago for 120k. Worth 168k now. Refinanced said house recently and pay $885 per month total payment with escrow.

Have friends who are struggling with increased rent costs, $1000-$1500 for pretty much basic housing in a safe area.

We take the deduction, and we take the appreciation of property value.

[Lowexpectations]

Originally Posted by Trainwreck20

We pay our taxes twice in one year and skip the next. In the year we don't pay taxes, we use the standard deduction and itemize in the year we double up. Interest is also deductible, so along with miscellaneous deductions it comes out quite beneficial for us.

That's certainly an option and you can also make two mortgage payments in December depending on the timing so you get another mont's worth of interest in the year you've paid two years worth of taxes. While that's a good option is likely a difficult one for the nearly half of homeowners with a mortgage who don't itemize as they'd have to have the savings/cashflow to front a years worth of taxes and/or pay late fees.

The larger point is often in the real estate game homeownership is pushed and one of the most common lines is to tell someone that the interest and property taxes are deductible. While true nearly half of homeowners with a mortgage dont itemize and therefore receive no benefit.

[Lowexpectations]

Originally Posted by JH6

TN may be a better deal for some folks. TX may be a better deal for some folks. Bottom line is are you happy where you are living?

I grew in in NY. We had highest taxes and expenses in the country (maybe second to NJ, but still high).

Coming to TX was a good move for us.

No income tax, saves me about 4-5k per year.

Property tax is $2800 on a 168k house with homestead. In NY, I was paying $2800 for a house that was valued at 48k (we lived in buffalo, not NYC). A family member just bought a house in NY valued at 70k, taxes are over $3500.

It is not uncommon to have a $8000-$10000 per year property tax bill for a decent house.

Also, NY has School Tax, Local Tax, Municipality Tax. TX property tax is one bill per year.

There are pros and cons. Pros are very low utility rates (not water but everything else). Cheap gas prices.

Seem to be higher food costs down here, and very high water rates.

To the folks saying to rent an apartment to avoid paying property taxes, that doesn't make sense in my case.

Bought my house in TX 5 years ago for 120k. Worth 168k now. Refinanced said house recently and pay $885 per month total payment with escrow.

Have friends who are struggling with increased rent costs, $1000-$1500 for pretty much basic housing in a safe area.

We take the deduction, and we take the appreciation of property value.

What deduction do you take? If you pay 2800 in property tax and your total mortgage payment is under 900.00 a month what are you itemizing to get above 12600.00?

[lepoisson]

Originally Posted by JH6

TN may be a better deal for some folks. TX may be a better deal for some folks. Bottom line is are you happy where you are living?

This is true. I suspect that high income folks will be better off in a state without income tax. But people with a modest income might be better off in a state with low property tax, but with the addition of income tax.

[StealthRabbit]

Originally Posted by lepoisson

This is true. I suspect that high income folks will be better off in a state without income tax. But people with a modest income might be better off in a state with low property tax, but with the addition of income tax.

everything 'depends'

such as in Oregon 'low income' is not much help, (They have no sales tax, but state funds / schools are in really bad shape)
Oregon Taxable Income Rate
$3,350 - $8,400 7.00%
$8,400 - $125,000 9.00%
$125,000+ 9.90%


Always do the math!

I will NOT join the folk on this thread that are using 'deductibility' as a way of dealing with High TX property taxes.

Say you are in a 15% tax bracket... you will be getting spending $10,000 and getting a mere $1500 'back' (if you get any).

I try to deal with all my expenses by offsetting them with INCOME. Thus in TX, I keep an extra rental property to provide enough extra income to pay for ALL my TX property taxes. In WA, I rent out my 1800SF daylight basement to 'help' pay for property taxes.