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Old 06-17-2012, 02:50 PM
 
Location: The Woods
16,936 posts, read 22,202,288 times
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Even if the appraised value drops, the taxes won't. The town still needs X amount of dollars for their budget. If the appraised value drops, they can just raise the tax rate. The only way to lower the taxes is to lower the budget.
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Old 06-17-2012, 03:19 PM
 
Location: Vermont
530 posts, read 1,181,331 times
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You really have to take a very long view and look at real estate from that perspective. I am 60 years old, and grew up on Long Island, so I have seen many "housing bubbles" and recessions, as well as rampant inflation. The market is terrible now, but unless you subscribe to TEOTWAWKI, chances are it will come roaring back as it has done innumerable times in the past. I wouldn't let property taxes on current assessments deter me from buying a home in Vermont. I moved here in the early 90's, just at the end of a serious housing crisis in the Upper Valley. Prices climbed, as they are wont to do, for almost 15 years. Now there is an adjustment...the market corrects itself, much as stocks do. Interest rates are at historic lows, inventory at historic highs...do the math and take a chance. A house is not only your biggest investment, in the sense that a good deal of your income goes into purchasing and maintaining it, but it is also your home. I would weigh the current assessments and taxes against the total picture, including the dearth of rentals in Vermont. Purchasing a home in Vermont now may not be the sow's ear you imagine, especially when you consider, if you are going to live here anyway, the rental market remains as strong as ever.
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Old 06-17-2012, 04:27 PM
 
Location: Vermont
530 posts, read 1,181,331 times
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Quote:
Originally Posted by angelo129 View Post
They've found many nice-looking condos online, and searching on zillow and trulia shows that these condos have dropped enormously in price over the last couple years. Some that were in the $300,000 range are now closer to $100,000. However, they're still valued, for property tax purposes, at their prior values. The result is that you have $110,000 condos (which, for what it's worth, I think were way overvalued and are now reflecting more like their real worth) with $6,000 a year property taxes. If they were to buy one of these condos, will the property values be adjusted to reflect the price they paid or will they stay the same? Our relatives would be understandably afraid to take on a place with low value and enormous taxes, especially since those taxes are likely to rise. I certainly couldn't advise it and, for them, it would be a deal breaker. Does anyone know the answer?
Can you tell me what condos they are looking at? I have a friend who is a realtor, and she can confirm these price drops. The decrease seems extraordinary to me, as someone who has bought and sold four properties in the area in the latest 12 years, I can't think of any condo that was valued at $300k having lost two-thirds of its value in the last couple of years. Even my house only lost about 10%, and I am curious to know what condos they are looking at.
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Old 06-18-2012, 06:09 AM
 
161 posts, read 239,615 times
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Quote:
Originally Posted by jenny1951 View Post
You really have to take a very long view and look at real estate from that perspective. . . . Interest rates are at historic lows, inventory at historic highs...do the math and take a chance. A house is not only your biggest investment, in the sense that a good deal of your income goes into purchasing and maintaining it, but it is also your home. I would weigh the current assessments and taxes against the total picture, including the dearth of rentals in Vermont. Purchasing a home in Vermont now may not be the sow's ear you imagine, especially when you consider, if you are going to live here anyway, the rental market remains as strong as ever.
I've said this before somewhere on this board, but I think that's a dangerous attitude: just go ahead, take a chance. Lots of people did that during the last housing bubble, and lots of other people encouraged them to spend money they didn't really have. Not very many years before that, at the height of the stock-buying frenzy that also resulted in a crash, I recall hearing a respected money manager (on a PBS program) telling a call-in listener who said he couldn't afford to invest, that he "couldn't afford not to" and should borrow the money to invest with. I think these attitudes are recipes for disaster, but we have extraordinarily short memories and we're eager, with the slightest encouragement, to stick our fingers in the electrical outlet yet again.

I can't be the only person who thinks it's just plain crazy to buy something that you may not be able to afford in a few years. The only way that any ordinary person could expect to pay such enormous property taxes indefinitely is if they have a reasonable expectation of getting a VERY substantial raise every year. Does anybody seriously think that's going to happen, when the world is economy is in chaos and our wages have been flat for years?

My relatives are prudent people, and they won't take on a burden of debt that might become impossible to pay off if their situation should take a downturn. They're not looking for an investment or chance or gamble, they're looking for a place that can be their home for many years. That inevitably means they're looking for a place they can feel confident of being able to afford even if their income doesn't grow much or at all. Taking the long view requires a degree of certainty that you'll be able to afford to pay for the house for the long term. At this point, they're no longer seriously considering buying anything in Vermont. They want to own a home and are looking at some places in Maine at the moment. The taxes are vastly lower, as are the prices of real estate, and we have relatives there who would rent the house in the interim.
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Old 06-18-2012, 09:15 AM
 
Location: Vermont
530 posts, read 1,181,331 times
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Well, if their business doesn't require that they live in Vermont, then there are no end of cheaper COL places to choose from. I wouldn't pay $6k in taxes for a condo, that is crazy to begin with. My taxes are $2700 for a house, and frankly, Windsor has one of the highest property tax rates in the state. Most of the condos in Wilder and Hartford priced around $100k have taxes around $1500. Were they maybe looking at Quechee Lakes, which has a ton of fees for their condos?
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Old 06-18-2012, 10:04 AM
 
161 posts, read 239,615 times
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Quote:
Originally Posted by jenny1951 View Post
Well, if their business doesn't require that they live in Vermont, then there are no end of cheaper COL places to choose from. I wouldn't pay $6k in taxes for a condo, that is crazy to begin with. My taxes are $2700 for a house, and frankly, Windsor has one of the highest property tax rates in the state. Most of the condos in Wilder and Hartford priced around $100k have taxes around $1500. Were they maybe looking at Quechee Lakes, which has a ton of fees for their condos?
I didn't dig too deeply into exactly where they were looking. They're familiar with the area where they'll be living, but had never looked into real estate there. They'll definitely be living in Vermont, but (as of this morning) they've shelved the idea of buying in the state.
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Old 06-19-2012, 07:23 AM
 
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Property taxes in VT arent going to decrease. Towns come thru every 5-10 years and do a complete reassessment of all of the properties in the town. They dont decrease the house's value. I live in Colchester in a house that I bought for $370k in 2006. My property taxes are over $8k a year now. its rediculious. But its the way it is. VT is not a cheap place to live.
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Old 06-19-2012, 12:18 PM
 
Location: Vermont
530 posts, read 1,181,331 times
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Quote:
Originally Posted by angelo129 View Post
I didn't dig too deeply into exactly where they were looking. They're familiar with the area where they'll be living, but had never looked into real estate there. They'll definitely be living in Vermont, but (as of this morning) they've shelved the idea of buying in the state.
If they are going to be in the Upper Valley and renting, they could also consider the other side of the river in NH. That is where I lived when I first moved up here. Lebanon, Plainfield and Cornish are very nice areas to live in. No state income tax in NH, so if renting, it makes sense to live on that side of the river. In any case, regardless of which side they choose to live on, here is a link to rental housing that I have always found helpful in my searches. Landlords pay a fee to list here, but I got two rentals off this site that were both excellent:

Dartmouth Real Estate Office
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Old 06-21-2012, 02:11 PM
 
Location: Vermont
10,281 posts, read 11,168,402 times
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The property tax bill for any property is based on two factors: the assessed value of the property and the budget established by the town. Although the OP is not now a voter in the town, if s/he does move in s/he will be, in a very real sense, voting on her property tax bill.

I am on the Board of Civil Authority for my town and I have heard many tax assessment appeals. In fact, the last time we had a townwide reappraisal I chaired the Board for the 75-80 appeals we heard. It is not true that the process is arduous and expensive. It is true that some taxpayers hire lawyers and appraisers to help prepare their cases, but it is not required; a well-prepared taxpayer can put together a persuasive case without a lawyer.

There may be justification for an appeal of the assessment or for a townwide reappraisal. In this case it is possible that all the condos in a given town or area are assessed too high because they lost more value than single-family homes or other categories of real estate. If this is the case it should be possible to prove this based on sales records. If you can prove that condominiums are overassessed relative to other types of real estate in the town, then it is very possible that you can argue successfully for a reduction in your assessment, which may result in a reduction in your property tax bill.
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Old 06-21-2012, 03:38 PM
 
Location: Vermont
530 posts, read 1,181,331 times
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Quote:
Originally Posted by jackmccullough View Post
The property tax bill for any property is based on two factors: the assessed value of the property and the budget established by the town. Although the OP is not now a voter in the town, if s/he does move in s/he will be, in a very real sense, voting on her property tax bill.

I am on the Board of Civil Authority for my town and I have heard many tax assessment appeals. In fact, the last time we had a townwide reappraisal I chaired the Board for the 75-80 appeals we heard. It is not true that the process is arduous and expensive. It is true that some taxpayers hire lawyers and appraisers to help prepare their cases, but it is not required; a well-prepared taxpayer can put together a persuasive case without a lawyer.

There may be justification for an appeal of the assessment or for a townwide reappraisal. In this case it is possible that all the condos in a given town or area are assessed too high because they lost more value than single-family homes or other categories of real estate. If this is the case it should be possible to prove this based on sales records. If you can prove that condominiums are overassessed relative to other types of real estate in the town, then it is very possible that you can argue successfully for a reduction in your assessment, which may result in a reduction in your property tax bill.

Great information, thanks!
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