What's Up with the Property Taxes? (Houston, Brenham: employment, subdivision, median income)

[Ghost Town]

Originally Posted by donblackie

Sure that is extreme but there are people I know that make $600k and live in a $400k home all day.
Does that still prove the point?

Correct.
That was an extreme, but there are many options in between that will save you more money in TX compared to CA.
Let's go into more details.
State income tax in California: 7.25%.
Property tax rate in Los Angeles county: 0.75%.
Mean house price in Los Angeles county is $650K (what you can get for that is another question...)
https://la.curbed.com/2020/2/28/2115...angeles-report
Let's say you are making 100K in LA (above average). And you own 650K house. That means you have to pay $4875 in property tax + $7250 state income tax = $12100. Good luck finding anything decent for 650K in LA. And can you afford that house with 100K income?
Right now average single family home price in Houston is $310K.
https://www.noradarealestate.com/blo...estate-market/
Let's say your tax rate is 3%. You have to pay $9300 in property tax and no state income tax. Plus you can much easier qualify for that house with 100K income in Houston.
A couple of years ago my friend bought new house for only 150K in Houston. That's less than 5K tax. And NEW construction. Not too bad. I didn't like the area, but it improved significantly lately. Can you save on tax compared to CA in this scenario? Easily

[lipbalm]

Originally Posted by donblackie

My first response gave my background up front. So when you say, "the thumb of the system is holding them down" what do you mean? As stated, i was a refugee from a country. Forget wealth. Very little money. Didnt speak the language. Parents came here and everything was different culturally. Barely spoke the language. We put our heads down and persevered.

If we followed my logic nobody would be a teacher, firefighter or police? How do you mean? I dont get it. You state there is a system in place that benefits the wealthy but doesnt help the common person. If "the system" were so bad, you are correct, we really would have no teachers, firefighters or police. Correct?

If you start to push an opposite way to the extreme, then wouldnt that do the same for people making good money performing brain surgery? They would opt to spend their time on something else.

We all make choices, and we must live with those choices. You chose wisely. I know I could have done better but I am not blaming anyone but myself for it.

[Ghost Town]

Originally Posted by houston-nomad

I'm saying to acknowledge what the system is. Don't pretend that it's not rigged to benefit the rich, then continue to punish the poor for not playing the game as well as the rich. Acknowledge that the rich are benefitting from a system rigged in their favor.

What is your definition of the rich and wealthy?
This system provides a lot of benefits to the poor. Welfare, very low income tax, food stamps, subsidized housing, etc. There are no such benefits for the middle class.
This system is milking the middle class for the favor of the poor.

[3shipguy]

Originally Posted by Ghost Town

What is your definition of the rich and wealthy?
This system provides a lot of benefits to the poor. Welfare, very low income tax, food stamps, subsidized housing, etc. There are no such benefits for the middle class.
This system is milking the middle class for the favor of the poor.

Some use it as a crutch. Others use it as a stepping stone. How do you choose to use it? The system benefits the rich and the poor. The middle class are the ones asked to just bend over.

[clerymary]

Originally Posted by Ghost Town

Correct.
That was an extreme, but there are many options in between that will save you more money in TX compared to CA.
Let's go into more details.
State income tax in California: 7.25%.
Property tax rate in Los Angeles county: 0.75%.
Mean house price in Los Angeles county is $650K (what you can get for that is another question...)
https://la.curbed.com/2020/2/28/2115...angeles-report
Let's say you are making 100K in LA (above average). And you own 650K house. That means you have to pay $4875 in property tax + $7250 state income tax = $12100. Good luck finding anything decent for 650K in LA. And can you afford that house with 100K income?
Right now average single family home price in Houston is $310K.
https://www.noradarealestate.com/blo...estate-market/
Let's say your tax rate is 3%. You have to pay $9300 in property tax and no state income tax. Plus you can much easier qualify for that house with 100K income in Houston.
A couple of years ago my friend bought new house for only 150K in Houston. That's less than 5K tax. And NEW construction. Not too bad. I didn't like the area, but it improved significantly lately. Can you save on tax compared to CA in this scenario? Easily

That is not the correct way to look at it. You are considering different situations. The price of real estate is a different factor. If you want to make a case that TX is better because real estate is cheaper, that's a different argument. But if you want to talk about tax burden, you need to consider identical scenarios.

Real estate is an investment after all, and prices in CA being higher means their properties actually appreciate better, which is partially due to their tax structure. Houses in TX can't run too high because the high property taxes. If you think that's good, that's an opinion. I actually think that's a minus bucause for most people their house is their primary asset and if that stays flat, people don't get wealthier. But again, that's a totally different discussion.

Here, we were talking about property taxes, which dollar for dollar are super high in TX.

[Ghost Town]

Originally Posted by clerymary

That is not the correct way to look at it. You are considering different situations. The price of real estate is a different factor. If you want to make a case that TX is better because real estate is cheaper, that's a different argument. But if you want to talk about tax burden, you need to consider identical scenarios.

Real estate is an investment after all, and prices in CA being higher means their properties actually appreciate better, which is partially due to their tax structure. Houses in TX can't run too high because the high property taxes. If you think that's good, that's an opinion. I actually think that's a minus bucause for most people their house is their primary asset and if that stays flat, people don't get wealthier. But again, that's a totally different discussion.

Here, we were talking about property taxes, which dollar for dollar are super high in TX.

I don't agree with that at all.
You need to compare state income tax + property tax for the same income.
Property values are quite different and there are many ways how to look at it.
I suggested fair comparison taking into account average house prices.
I can give you a lot of realistic examples, all in favor of Houston.
System is system, you know the rules. You can invest differently. There are multiple ways to invest. Personally I would prefer to take advantage of lower real estate prices, pay off house early and have more free cash to invest differently. In LA I would probably prefer to invest in real estate, cause it's different market. You need to navigate between different systems.

[Dopo]

Originally Posted by donblackie

"The system is the system" = isnt that an acknowledgement of the system?
Therefore, if you want to benefit from it wouldnt it make sense to first assess what it takes to gain benefit? IE, start a business, get a high paying job, accumulate wealth etc.

I disagree with what you say
Stop using the “I’m a refugee card” to try to say that anybody can make it in this country.

To move up from the bottom, people need help, that’s just the way it is
I bet a million dollars that lots of people helped you but you just choose to not mention it.

And yes, I’m an immigrant who had to work to pay for my college and become what I am today
The day I graduated from college, my resume was 2 full pages long
So I know how difficult it is to “move up”

[Ghost Town]

Originally Posted by clerymary

Real estate is an investment after all, and prices in CA being higher means their properties actually appreciate better, which is partially due to their tax structure.

Actually not the low property tax rates in CA but Prop 13 combined with the low tax rates makes property values increase like crazy. This is only CA thing. Because of the frozen tax you are not getting priced out of your house. Take a look at other states like FL, DE, LA. With the similar low tax rates their property values don't increase tremendously like in CA. I'm glad we don't have it here in TX.

[clerymary]

Originally Posted by Dopo

I disagree with what you say
Stop using the “I’m a refugee card” to try to say that anybody can make it in this country.

To move up from the bottom, people need help, that’s just the way it is
I bet a million dollars that lots of people helped you but you just choose to not mention it.

And yes, I’m an immigrant who had to work to pay for my college and become what I am today
The day I graduated from college, my resume was 2 full pages long
So I know how difficult it is to “move up”

Well let's agree to disagree then. As I said, you are entitled to your opinion on which state is "better". But if you want to talk about tax burden, especially when it comes to property taxes (which this thread is all about) you need to keep the tax base constant, if you want to make comparisons. You can't compare apples to oranges just because it fits your narrative. I might prefer living in TX (hey I live here) but still hate the property taxes here.

For instance, why do you want to keep income the same? People in CA earn more on average than people in TX. But you decided it was ok to keep that fixed yet allow the housing prices to vary. In finance we call this "ceteris paribus". Look it up!

[clerymary]

I quoted the wrong post. Sorry for that. It was intended for the post above.