Property Tax x 20 (sales, real estate, lease)

[20Hope20]

If i decide to stay in my house for 20 years post retirement, just property tax would cost roughly $500k, even if capped. Isn't it insane?

[urbancuriosity]

True, but you will be paying no income tax on any of your income. Other states have much lower property taxes, but they tax parts of your income. South Carolina has very low property taxes, they do not tax social security and they offer some retirement deductions but they will tax your 401K and pensions beyond those deductions. So you have to evaluate the tradeoffs between high property taxes with no income tax on the one hand and low property tax with some income tax. Which is better depends on the individual.

[astrohip]

Originally Posted by 20Hope20

If i decide to stay in my house for 20 years post retirement, just property tax would cost roughly $500k, even if capped. Isn't it insane?

Not really. That means it's $25,000 a year. which means your property is worth about a million dollars. So over twenty years, you're being taxed on $20 million dollars of value.

If you made $20 million in income, you would pay much MUCH more in income tax, if TX switched to an income based system. Probably around $1 to $2 million.

Pick your devil. Government has to be funded some way.

[TurtleCreek80]

Originally Posted by 20Hope20

If i decide to stay in my house for 20 years post retirement, just property tax would cost roughly $500k, even if capped. Isn't it insane?

You have to live somewhere. I assume your mortgage will be paid off by then. So…do you think you could find a comparable property to lease for $2000/mo?

And you still have a million +++ asset that you can sell. Or you can take a reverse mortgage if you need to in later retirement.


I don’t really see what is so insane about it.

[f4shionablecha0s]

Originally Posted by 20Hope20

If i decide to stay in my house for 20 years post retirement, just property tax would cost roughly $500k, even if capped. Isn't it insane?

No. You're receiving 20 years of service from police, firefighters, roads, and your grandchildren get to go to school.

[Threestep2]

Originally Posted by 20Hope20

If i decide to stay in my house for 20 years post retirement, just property tax would cost roughly $500k, even if capped. Isn't it insane?

Staying in the house or not having paid income tax and used publuc services paid for by real estate tax instead of income tax.

[MurphyPl1]

Congratulations on your creative humble bragging about your million dollar home.

[numbersguy100]

Originally Posted by astrohip

Not really. That means it's $25,000 a year. which means your property is worth about a million dollars. So over twenty years, you're being taxed on $20 million dollars of value.

If you made $20 million in income, you would pay much MUCH more in income tax, if TX switched to an income based system. Probably around $1 to $2 million.

Pick your devil. Government has to be funded some way.

Your analogy does not work. Also, the key part of OP's post is "in retirement". People's retirement income is typically far lower than during their prime working years, so the benefit of being in a low/no income tax state with higher consumption taxes (real estate and sales tax) is far lower in retirement for the vast majority of people.

[Wittgenstein's Ghost]

Originally Posted by astrohip

Not really. That means it's $25,000 a year. which means your property is worth about a million dollars. So over twenty years, you're being taxed on $20 million dollars of value.

If you made $20 million in income, you would pay much MUCH more in income tax, if TX switched to an income based system. Probably around $1 to $2 million.

Pick your devil. Government has to be funded some way.

But there's not $20MM in value. There's $1MM in value that exists for twenty years. Those aren't the same thing, and it's in no way comparable to $20MM in income.

[Wittgenstein's Ghost]

These discussions all come down to the question of how a state should get its income. Of course the state has to get paid. But the question is whether it should be through income or property taxes. For retired persons, income taxes are often preferable.

My guess is that Texas has become significantly less of a low tax burden state in recent years because property taxes have skyrocketed as property value have gone up.

Personally, I think taxes should mirror income, not what you own.