How does anyone afford the property taxes? (Dallas, Fort Worth: apartment, lease)

[CHRockwell]

Originally Posted by Sunbather

I'm oversimplifying the situation and applying the nationwide median state property tax of ~1%, NOT accounting for a change in home pricing with the locales. And even still DFW looks better on paper considering both property tax and income tax. The cities you listed above where property tax is lower than 1% are typically going to cost you more to get the same house.

PS perhaps you misunderstood my post. I believe we are relatively on the same side of this debate..

You said if you owned "that house" (speaking of a median prices house in Richardson for example) it would be $2500-$3000 in similar type cities who Dallas competes with. "That house" has far higher property taxes in the places I listed for those cities in which Dallas competes with. I looked up "that house" in the various cities and the taxes were way higher for many.

[Sunbather]

Originally Posted by CHRockwell

You said if you owned "that house" (speaking of a median prices house in Richardson for example) it would be $2500-$3000 in similar type cities who Dallas competes with. "That house" has far higher property taxes in the places I listed for those cities in which Dallas competes with. I looked up "that house" in the various cities and the taxes were way higher for many.

By 'that house' I meant a $275k house and used a flat median 1% property tax for an oversimplified example. I am well aware, and have acknowledged a few times, that the same physical house here will cost you more other places, even if the property tax rate is lower.

Thus, it pushes my argument even more in favor of the property tax and zero income tax scenario we see in Dallas. The point I was trying to make is that, even using very high-level analysis, DFW still came out better. Add the actual cost of buying that same house in another market and DFW looks even better still (as you pointed out).

Again, we are on the same side here. Property tax + income tax in most similar cities will be more than property tax alone for people here. People tend to easily forget that and focus in on property tax alone.

[EDS_]

Originally Posted by CHRockwell

You said if you owned "that house" (speaking of a median prices house in Richardson for example) it would be $2500-$3000 in similar type cities who Dallas competes with. "That house" has far higher property taxes in the places I listed for those cities in which Dallas competes with. I looked up "that house" in the various cities and the taxes were way higher for many.

Compare the overall state and local imposed, "tax wedge" per city (state, county, city income taxes + sales taxes + property taxes) for a far better picture.

It simply astonishes me that people fixate on property taxes when the overall burden is what matters.

[CHRockwell]

Originally Posted by EDS_

Compare the overall state and local imposed, "tax wedge" per city (state, county, city income taxes + sales taxes + property taxes) for a far better picture.

It simply astonishes me that people fixate on property taxes when the overall burden is what matters.

Very true. I am always amazed how fixated people are on a % rather than actual $ they pay.

[mastershake575]

Originally Posted by puente0101

With the housing prices in Dallas no longer the bargain they were 10-15 years ago, we've been trying to find a house in a neighborhood that's in our budget. The prices are higher than we'd like, but the price itself doesn't seem to be the main problem. What seems to be the killer is not so much the price of the house itself, but the taxes!

Sounds like an oxymoron. "We have upper middle class income and can easily afford a half million dollar house but it's the taxes that is killing us".......

If you can realistically afford a half million dollar house (175k+ a year income) then your not worrying about property taxes......

Originally Posted by puente0101

When you could get a 2000 square foot house for around $185-200k, taxes were still high percentage-wise vs other states, but they were still manageable since the house was valued much lower. Now that the same house is selling for $450k-$500k or more, the taxes are just insane.

If a 10+ year old house that's only 2000 square feet is selling for half a million then your probably buying into a neighbhorhood that's mostly upper class income. Sounds like your trying to squeeze into a predominantly upper class neighbhorhood on an upper middle class budget

Originally Posted by puente0101

I don't understand how any regular person who's not in a highly paid profession can own a home here anymore, even if they can afford the initial purchase price to buy it. Not unless they're from California with $2MM after cashing out the house they bought for $22,000 in 1973, or bringing non-US foreign money.

Huge exaggeration. Sounds like your chasing after flashy houses or you don't know where to look.

Plenty of working class houses in Tarrant County (Arlington, Grand Praire, Euless/Bedford), Garland, Carrollton, Eastern Plano, Irving, Mesquite

Even solid income with the desire for good schools but not rich there's tons of options in Allen, Wylie, Richardson, Central Plano, McKinney....ect

[HP48G]

Originally Posted by techoin

most of the property taxes go towards school district..what puzzles me more is - you have kids going to school or not, irrespective of numbers of kids have to pay same level of taxes...feels like you are sponsoring someone else kids to go to school...not sure what's rationale behind it...

That’s how public system works. You don’t get to opt out. You contribute because you still benefit from living in a city with educated people.

[HP48G]

Originally Posted by DFWUser1

Ideally I would say they should cap it when someone buys the home.
Similarly, ideal way should be to cap it at the time of purchase, keep the same rate as long as the owner keeps the home. And may be introduce some tax on any gains at the time of sale of property. Same thing should apply even if the value goes down. .

No.

The costs of maintaining, and upgrading infrastructure and services are not capped or frozen in time, so why should property taxes be capped at time of purchase? It doesn’t work.

[kscott462]

Originally Posted by albert648

That's also a bad idea. States like NY and NJ have high income taxes AND high property taxes (in Westchester County the property tax rate is something along the lines of 2-3%). This increase your overall tax burden. In California, your property tax rate is 1% but your house costs triple what it does in Texas, AND you have a moderate to high state income tax. High property taxes also serve to suppress demand for housing, which keeps prices under control. No speculator is going to pay $12k in tax on a $500k house in DFW when they can get a house worth twice that in LA or NY (and probably fetch a higher rent). California also made it impossible for anyone to build anything anywhere through red tape and regulation so supply is artificially constrained - I wouldn't touch that market with a ten-foot pole as a buyer.

If they want to institute an income tax, property tax has to go to zero on primary residences for it to be palatable. I would actually support a 3-4% state income tax+no property tax on your primary residence. However, chances are if this happens, housing prices will go up to make up the difference.

I've done the math based on the expected income in my profession, housing prices, income taxes, and property taxes. The numbers indicate clearly that I'm ahead in TX even paying 2.5% property tax on a primary residence. Mostly because the income differential doesn't make up for the difference in cost of living.

I live in the Socialist Republic of New York and you don't want a State Income tax as property taxes will NEVER GO DOWN. Property taxes here on Long Island have people paying 18K a year (1,500 a month) on a 2,000 sq ft house and NEVER go down when house prices decline. Then you have the progressive state income tax so you don't want Texas to get started with that because you will become the next Socialist State along with California.

I thought I wanted to relocate to Texas until I saw how high & how fast your property taxes are going up and I say
no thanks, 20 years of High property taxes are enough for me. 5 years from now property taxes in Texas will rival NY and that is just plain scary!

[DFWUser1]

Originally Posted by HP48G

No.

The costs of maintaining, and upgrading infrastructure and services are not capped or frozen in time, so why should property taxes be capped at time of purchase? It doesn’t work.

That's how stocks work too. No tax on paper increases or decreases every year because government expenses are increasing. You pay the tax or write-off on loss when you sell. The whole exercise of valuations, hearings is waste of effort every year. May be add tax at the time of sale of property when the gains or losses are actually realized? If other expenses are increasing, I am sure there can be lot of other options that can be reasonably considered. One way could be some small income tax to off-set the property tax increases. Because no state income tax tends to favor double income families or higher earners disproportionately. With a small component of state income tax, the more you earn, you pay proportionately. Only to off-set, something like AZ. Not like CA. Or NY/NJ/CT type where people struggle with high property and income taxes.

Also as I mentioned, people buy homes hoping for a fixed monthly budget, unlike rents that increase every year. No one can assume that taxes can go that high like it happened over the last few years. Then add ever increasing HOA, Insurance every year. But the incomes do not necessarily increase in that proportion. Eventually that can make the home unaffordable even though one bought a home within or lower than their budget only a few years ago.

Again, as I mentioned in my post that's just one thought for discussion on pros and cons..

[dfwtallducks]

Originally Posted by EDS_

Compare the overall state and local imposed, "tax wedge" per city (state, county, city income taxes + sales taxes + property taxes) for a far better picture.

It simply astonishes me that people fixate on property taxes when the overall burden is what matters.

this! it is not productive to complain about high property tax rates without evaluating income tax burdens for other states.

let's take for example a comparison of virginia (a state with below avg prop taxes) v the dfw area (tx is a state with above avg prop taxes) and let's say we're looking at property that is worth $500k with an income of of $200k.

for va:
the property tax rate on avg is 0.8%. the state income tax rate is 5.75%.
with the above criteria in place, your take home salary becomes ~$136k and you're paying about $4k in prop taxes. $136k - $4k = $132k effective left.

for dfw:
the property tax rate is about 2.2%. the state income tax rate is 0%.
with the above criteria in place, your take home salary becomes ~$147k and you're paying about $11k in prop taxes. $147k - $11k = $136k effective left.

in these scenarios, despite the fact that dfw prop taxes rates are high, you still take home more money at the end of the day. of course, there are a few caveats you should keep in mind:

- i'm using a random scenario and everyone should do these calculations carefully based on what they make and the value of house they have / are looking to purchase (also be smart about the amount of house you can afford v your income level)
- as previously mentioned, if you live in an expensive house and / or have a lot of disposable wealth, but have no income, then dfw probably doesn't make the most sense to live in, economically speaking, due to high property taxes and no state income taxes
- the amount and type of house you'll get in dfw v other areas will be differently priced. ie a $500k home in dfw will definitely be above $1mill in seattle

tldr; you gotta do your research to figure out if the income + property tax numbers for tx work out in your favor. the good news is that there are tons of resources out there to calculate your income taxes (smartasset.com) and property tax rates for cities and states