Property taxes...buying a home...help!

[10scoachrick]

Originally Posted by Aquitaine

Which is just another way of saying 'somebody else should pay my share.'

You freeze your rate, my rate has got to go higher.

Somehow you believe the 'shares' are perfectly calculated. IF the mansion next door to the fish shack never gets built, the city never gets the $35,000 in taxes from it...the fish shack remains at, say, $200K valuation and they pay ~$5K in taxes. How is it their 'share' to pay double that a few years later after the mansion does get built? IF the mansion NEVER gets built, the value of the fish shack increases(given the Austin climate) in a more organic fashion. Does it somehow put a burden of their 'share' on someone else if the fish shack property doesn't explode in 'value'?

[Aquitaine]

Originally Posted by 10scoachrick

Somehow you believe the 'shares' are perfectly calculated. IF the mansion next door to the fish shack never gets built, the city never gets the $35,000 in taxes from it...the fish shack remains at, say, $200K valuation and they pay ~$5K in taxes. How is it their 'share' to pay double that a few years later after the mansion does get built? IF the mansion NEVER gets built, the value of the fish shack increases(given the Austin climate) in a more organic fashion. Does it somehow put a burden of their
'share' on someone else if the fish shack property doesn't explode in 'value'?

It seems like your complaint here is with market forces and not the property tax system. Of course they're not perfectly calculated. What price is perfectly calculated? What does 'perfectly calculated' even mean in an industry where 100 people can walk through your house and declare it costs too much, and then the 101st pays asking price? Are those 100 people wrong, or is the 101st wrong and just paying too much?

The economic meaning of a mansion being built anywhere is that people with millions of dollars don't build mansions just anywhere. They build them in desirable areas, and despite the eccentricity and bizarre taste any one mansion-owning rich person has, that they would choose the spot next to your fish shack is communicating something about real estate in that area: it says 'mansions should go here - not fish shacks.' If you were going to build a mansion, you're not going to re-invent the wheel - you're going to build in a neighborhood that is either already nice (and pay the premium for it) or in a neighborhood that you may be reasonably certain will meet whatever standards you have for it.

Same thing if some other desirable thingambob goes in down the road. Anything worth mentioning in an real estate ad has the same effect. Community pool. Tennis court. Park. The actual 'value' these things add to nearby property is of course arbitrary, but pricing and assessing real estate is the art of the interpreting dozens if not hundreds of such signals in a more or less consistent manner.

I don't know what you mean here by 'organic fashion,' as if plopping down a mansion next door is somehow an artificial influence on value rather than an 'organic' one. Almost any change in the real estate market is the result of external and artificial action - I guess wildfires burning down all the trees nearby could be considered 'organic' but I don't know what 'organic appreciation' means unless it's just another way of describing the 'housing prices are unfair' complaint that comes up when demand skyrockets - a complaint whose only real solution is added supply, which in places like Austin happens slowly or on the fringes but in a place like San Francisco happens barely at all, because many of the same people complaining about housing values are also demanding historic preservation for every cute Victorian SFH in town. As George Carlin says...'BUILD MORE PRISONS! ...but not here.'

[whalersfan1974]

Here is an interesting look at Texas property tax rates.

[Ultrarunner]

Originally Posted by CBB_bear

Usually I'm not a fan of Texas' lack of any sort of progressive tax structure, but I think this time I'm with Rynldsbr. If you are curious what happens when the government tries to enforce a cap on property taxes, take a look at the effects of proposition 13 in California, which limits increases on property taxes to such a low level that people pay essentially the same amount on a house until it changes ownership or they refinance. So someone who bought a house for 300K in 1991 is essentially paying less than an inflation adjusted amount of property tax on a 300K house from 1991, even though it might be worth, say, 1.8 million today (which in certain areas, like the SF bay area, that level of appreciation is common).

This has completely messed up the state's finances and ability to bring in revenue, caused a lot of issues with funding to schools and the UC system, and completely distorted the real estate market.

Not exactly...

Prop 13 uses the value at the time of transfer to determine the base year... and then limits annual increases to 2% plus voter approved measures.

Refinancing has no effect on property tax.

Prop 13 became law in 1978... 37 years ago.

No one that owned a home in 1978 is still paying essentially the same amount 37 years later...

Remember the cap as stated is reset upon sale/transfer under Prop 13.

In the neighborhood where I was raised... almost no one from 1978 still owns... some homes have changed hands several time.

As to school funding... Prop 13 was in direct response to the Serrano Priest decision in where the State took over public school funding... the same thing was tried in Texas and failed.

It is not the job of voters or citizens to provide inflation adjusted revenue to government...

[Ultrarunner]

Originally Posted by centralaustinite

Yes, prop 13 was and is an utter disaster for the state of California. Real estate is an asset and if property tax is the main source of revenue, then it makes sense to assess its value every year.

I've been in my central house for over ten years and the property tax I pay has nearly doubled, but so has my equity. You are unlikely to see that sort of appreciation in Cedar Park but I wouldn't expect your property tax to stay level either. Plan for an annual increase.

Property Tax is only one source of revenue... California is well versed in the many ways to collect revenue... sales tax, income tax, property tax, excise tax, user fees, etc...

[CptnRn]

Originally Posted by whalersfan1974

Here is an interesting look at Texas property tax rates.

As I posted in your Texas thread...

That is not reporting on the total property taxes for an area. For instance, in Austin it reports an effective tax rate of 0.4606. Which is probably correct for last year's rate for the City of Austin ONLY. But that is only about 26% of the total tax. It does not include any taxes for the following property taxing entities.

Austin ISD
Teravis County
Travis County Healthcare District
Austin Comm Coll Dist.

For many properties in Texas you can go to the County Appraisal District website and look up the total tax bill for a property. Such as this one Travis Central Appraisal District