[Yankeerose00]

Originally Posted by JayCT

Sorry but if you can't afford $65,000 per year in taxes then you should not be buying a multi-million dollar home. Jay

But I think that the state shoots itself in the foot this way, doesn't it?
I mean, isn't this why people leave the northeast in droves? Honestly, if I had that much money, I'd be really tempted to move to a tax friendlier state. I'd pay high taxes to live on the Upper West Side of Central Park, but not to live in a town. I can see really high taxes in a historic location where housing is limited like Central Park or Beacon Hill.

Plus, I don't like to begrudge anyone their success. If a person can afford a 5M home, then more power to them. If they are living a house that is 5 times the size of my house, then they can pay 5x the amount of taxes. But I don't think it's fair they pay 8 or 10x the amount just because they can. Does that make sense?

[Stratford, Ct. Resident]

Originally Posted by Yankeerose00

Sorry but I have to disagree. Building a spec house post 2006-2007 when the market was clearly slowing down was not the smartest thing to do.

I don't agree that taxes should double and triple because a house is bigger.
If a 3000 square foot house has 8k in taxes, then a 5000 square foot house should have maybe 10k or so. So yes, taxes should be higher, but 65k like this house is, is a joke.

I know there is formula for figuring out the taxes but it seems a little uneven to me when comparing house to house.

For example, using the town of Redding, there are a few homes there with 3,000 square feet and taxes rangng from 10,000-14,0000.
By using this logic, shouldn't a house that is almost 4 times the size (this spec house is 11,000 square feet) have 4 times the taxes? That would make the property taxes between 40-48k a year.

In 2009, we know that it was a bad idea to build on spec in '06 or later. In '07 and '08, there were still plenty of spec builds breaking ground in New Canaan. Why were they doing it? Because they already had their financing lined up, and they thought the market would moderate while they spent ~ 1 year building these homes. Also, historically speaking, the uber high end had been insulated against drastic declines in previous bubble situations.

With regard to that 65K tax bill, it's based upon a value assessment made by the town of Redding. Your estimate that it should be ~20K less may be totally accurate, but perversely enough, it doesn't behoove the builder to appeal the bill. The builder needs reinforcement that his asking price is proper or under market, and the tax assessment helps him to validate that. On the "low-end", the tax assessment would be of no validation because a lender would be the final arbiter of the value of the home, whereas in the "high-end" the lender valuation is less significant because these buyer's generally only finance a small amount relative to the sales price.