Property tax estimate for 2013 (Austin: upper-class, refinance, loans)

[Spike8080]

Originally Posted by atxcio

Well, you are assuming appreciation of the max cap (10%) over the years leading to your tax doubling in 8 years (w/HS exemption). But, your home value would also double in that scenario. So your $200K home would be worth $400K at least to be paying those taxes (even assuming an increase in tax rate). Also, you'd have paid a significant amount of the loan on your home. So your worst-case scenario actually leaves you with a windfall of equity -- assuming you can afford the tax bill each year. Regardless, at that point you could sell, bank the cash and buy another home. Granted, the equivalent home you buy will have that same inflated value, but you'd need to only use as much cash as you want for the down payment, and keep the rest for college funds, vacations, etc.

I can also add some real historical data: my own taxes. In the past 7 years, the actual dollar amount of my property taxes has increased, total, in the range of 10%. Now, I do protest my appraised value every year. But still, they haven't increased anywhere near the magnitude you are concerned about. The market value of the home has probably increased about 20-25% during that same time. Not bad but definitely not doubling in 8 years like your hypothetical.

I agree somewhat however the I would not consider the last 7 years as the norm due to the financial collapse. Also my son is two and private school today is $11,000 not sure what it will be in a few years when he's enrolled. I have a separate college fund set up for him but will have to use it for elementary school soon. Anyway I hope your right and it doesn't hit the 10% cap each year. But at the rate this city is growing and the rate it is projected to grow I don't think its unreasonable to see my home value double in the next 8 years. And yes this is not bad thing and I can probably swing all of the taxes and schooling but I also know many of my neighbors will not be so lucky even at a lower tax increase. I would also like to be able to put more away for my future so maybe a move makes sense.

[je4xff]

Originally Posted by Trainwreck20

You can actually defer your taxes indefinitely (stop paying them) and have the accrued taxes and interest deducted from the property value when you die or move or whatever. I think you need to be retirement age to do this, though.

Never knew that - good to know.

HCAD: Tax Deferral for Homeowners
http://www.statesman.com/news/news/local/more-people-o
http://law.onecle.com/texas/tax/33.0...-of-all/nRmpS/

[CptnRn]

Originally Posted by Trainwreck20

You can actually defer your taxes indefinitely (stop paying them) and have the accrued taxes and interest deducted from the property value when you die or move or whatever. I think you need to be retirement age to do this, though.

Originally Posted by je4xff

Never knew that - good to know.

HCAD: Tax Deferral for Homeowners
http://www.statesman.com/news/news/local/more-people-o
http://law.onecle.com/texas/tax/33.0...-of-all/nRmpS/

The interest rate on that is quite high, 8%. If you can't afford to pay the taxes, you'd probably be better off taking out a home equity loan and get a lower interest rate. Plus you could deduct it from your income taxes. Or maybe look into a reverse mortgage.

[je4xff]

Originally Posted by atxcio

I can also add some real historical data: my own taxes. In the past 7 years, the actual dollar amount of my property taxes has increased, total, in the range of 10%. Now, I do protest my appraised value every year. But still, they haven't increased anywhere near the magnitude you are concerned about. The market value of the home has probably increased about 20-25% during that same time. Not bad but definitely not doubling in 8 years like your hypothetical.

Here's some other real data for actual tax rates (from my tax notices). A comparison of est. tax rates of 2013 with 2008:

2013
AUSTIN ISD 1.242000
CITY OF AUSTIN 0.502900
TRAVIS COUNTY 0.500100
TRAVIS COUNTY HEALTHCARE DISTRICT 0.078946
AUSTIN COMM COLL DIST 0.095100
Total Tax Rate: 2.419046

2008
AUSTIN ISD 1.163
CITY OF AUSTIN .4034
TRAVIS COUNTY .4216
TRAVIS CO HEALTHCARE DIST .0693
AUSTIN COMM COLL DIST .0958
Total Tax Rate: 2.1531

12.35% increase in tax rate.


So you see, even if your property value has stayed exactly the same in the last 5 years, your amount of property taxes have steadily increased.

Now that the austin economy and real estate market are heating up, you can be certain values will continue to increase dramatically over the next 5-10 years. Anyone think the tax rates will drop? Possible, but not likely.

Just take the next bond election as an example - the most expensive bond package in the history of Austin school district is up for election on May 11. It's close to a billion (not a typo) dollars this time, all to be funded by - you guessed it - increased property taxes. Like most Austin bonds, there's little chance it will get voted down.

If it was just the increased value assessments, that would be one thing.

[Trainwreck20]

The interest rate on that is quite high, 8%. If you can't afford to pay the taxes, you'd probably be better off taking out a home equity loan and get a lower interest rate. Plus you could deduct it from your income taxes. Or maybe look into a reverse mortgage.

Yes, the interest rate is high, but the plus is you don't actually HAVE to pay anything if you do not plan to sell. The intent if more to protect the elderly who intend to stay and never sell. Yes, it comes out of the inheritance (if there is any), but the homeowner does not have to pay anything and cannot realistically be 'forced' out of their home due to taxes that make up too much of their fixed income stream.

[Austin97]

Originally Posted by PrimusPilus

They've all gone up but mine has gone up the most which is perplexing because it doesn't stand out from the others. I will certainly research property tax representation companies even though many years ago I had once contested my home appraisal and won. Thanks.

We use austin pro tax, they have been fine.

[Austin97]

Originally Posted by texasgirl1

We just bought a lot last Sept. 2012 and the appraised value went up 40% or $52,000!

We will be protesting because that is 20K more than we paid.

I had a similar thing happen. I bought a lot for 120K, tax value at the time was around 20K. Maybe the sellers were mad so they reported the sales price or something, but the tax value went to 120K. Not much basis to protest on, that hurt though.

[Austin97]

Originally Posted by je4xff

Yes, but...

Some people who have lived in their homes for many years find that it eventually becomes unaffordable to keep their home after taxes have continually increased year after year. Sometimes people's incomes stay stagnant or even go down over the years, yet home payments continue to climb. A home you could once comfortably afford becomes too expensive.

So the only option to control the taxes is to sell the home. The sad thing is - this is your home. It's not just a possession to be tossed aside. It's where lives have been lived, children have grown up, memories have been made. Maybe if your lucky you've paid off your mortgage, but for some, selling the home becomes the only choice.

This is why I'd rather property taxes in Texas be reduced and offset with something else, even a state income tax. This way payments only go up when you have the necessary income, and people aren't forced out of their homes during the course of their 30 year mortgage.

This isnt true. Your taxes going up means the value went up. If the value went up you can take a HELOC to pay taxes and still come out way ahead.

Your house was 100K, you pay 3K taxes/year. Your house jumps to 400K, you now owe 12K/taxes per year. You take out a heloc for 200K and use that to pay taxes for the next X years. During that time, your price (presumably) went up.

[Austin97]

Originally Posted by mimimomx3

The problem now is that we start with revenue (taxes) and then decide how to spend it. We should start with a budget and then divide it out. No tax is fair, but this taxing system is really unfair. Do you think the historic exemptions are fair? A "flat" tax is the only fair way to go- everyone pays the same.

No system is fair. There is no way to compare fair vs unfair. There is no system that is more or less fair than others. There are only systems that create the most economic value, societal stability and stable tax flow for the government.

For example,
It is easy to argue that people who have higher property values are actually receiving more protection from the city as they have more to lose. Therefore they should pay more (ala insurance). If they have a larger house, it will take more firefighters to put it out plus they have more at stake. They benefit more so naturally should pay more.

People who make more money are benefitting more from the system. Who benefits more from the government stabilizing the stock market, rich or poor folks? The rich benefit disproportionately from the stabiity the government provides.

The system that exists is "fair" because that is the system that has been voted into existence by the people. That makes it the "fairest" system.

[10scoachrick]

Originally Posted by Austin97

This isnt true. Your taxes going up means the value went up. If the value went up you can take a HELOC to pay taxes and still come out way ahead.

Your house was 100K, you pay 3K taxes/year. Your house jumps to 400K, you now owe 12K/taxes per year. You take out a heloc for 200K and use that to pay taxes for the next X years. During that time, your price (presumably) went up.

I can come out 'ahead' by borrowing money to pay my increased taxes???

Wow! What a concept!!!