Property values compared to Texas - What am I missing? (sales, new home)

[winkosmosis]

Originally Posted by JohnSoCal

You cannot make generalizations about taxes and costs in California vs Texas. It depends on many factors including location, housing development, etc. Our son and his family lived in Wichita Falls TX for 4 years. We considered moving there to be near our grandchildren. We are retired. After researching it thoroughly, it would have been far more expensive for us to live there in Texas than here in California. The cost for a comparable home in Wichita Falls TX was more expensive than here and the property tax was triple in Texas. The difference in the property tax was $4500 more than what I pay in California state income tax. However it was resolved as our son and his family moved to Monterey CA.

Having said that, it applies in our particular situation which is an upper middle income retiree who lives in an area with reasonable housing prices and low property tax. Now I can move less than 10 miles to another neighborhood with comparable homes and my effective property tax would increas by $5,000 because of the additional fees. They pay a 2.9% total rate and I pay 1.15% even though our homes are in the same county in comparable neighborhoods built at the same time ( 2002 ).

The house in question that the OP posted is in Pasadena which is a very expensive area.

Isn't property tax capped? How can you have 2.9% in California?

[JohnSoCal]

Originally Posted by winkosmosis

Isn't property tax capped? How can you have 2.9% in California?

Property tax is 1% of the assessed value by state law. The initial assessed value is the purchase price of the home and the assessed value cannot increase more than 2% annually.

That is the basic property tax. However there can be additional fees to pay for the infrastructure, schools. These costs are either paid for by the developer and included in the price of the home or are paid for by the buyer by bonds. These are generally referred to as the Mello Roos fees.

Mello-Roos - Wikipedia, the free encyclopedia

The rate of 2.9% is the highest I have seen. We have bought several homes in California but have never paid Mello Roos fees. The typical total rate for homes with Mello Roos is 1.6%.

You also can't compare what a person pays here as it depends when they bought their house. You can have 2 identical homes in the same neighborhood where one is taxed 10 times the other because of the 2% annual cap on increases in assessed value. I have a friend in San Diego that pays less than $500 property tax per year on a home that is worth well over $1 Million because he bought his home in the 70's. If he were to sell his home, the new buyer will have to pay over $10,000.

[Lilly1224]

It's laughable that some would even try to compare LA to Dallas or Houston. LOL LOL LOL LOL

[winkosmosis]

Originally Posted by JohnSoCal

Property tax is 1% of the assessed value by state law. The initial assessed value is the purchase price of the home and the assessed value cannot increase more than 2% annually.

That is the basic property tax. However there can be additional fees to pay for the infrastructure, schools. These costs are either paid for by the developer and included in the price of the home or are paid for by the buyer by bonds. These are generally referred to as the Mello Roos fees.

Mello-Roos - Wikipedia, the free encyclopedia

The rate of 2.9% is the highest I have seen. We have bought several homes in California but have never paid Mello Roos fees. The typical total rate for homes with Mello Roos is 1.6%.

You also can't compare what a person pays here as it depends when they bought their house. You can have 2 identical homes in the same neighborhood where one is taxed 10 times the other because of the 2% annual cap on increases in assessed value. I have a friend in San Diego that pays less than $500 property tax per year on a home that is worth well over $1 Million because he bought his home in the 70's. If he were to sell his home, the new buyer will have to pay over $10,000.

That's ridiculous. At 2.9% or even 1.5% it's like they don't want you to own a home.

Forget it, I'm never buying a house unless it's on Maui-- 0.25% with a big homestead exemption.

[9162]

A 1.2M house in LA with property taxes $6890 doesn't sound right?

[JohnSoCal]

Originally Posted by 9162

A 1.2M house in LA with property taxes $6890 doesn't sound right?

Nothing unusual about that at all because of Prop 13. If you read my previous post, you would understand why this is so.

[winkosmosis]

Here's another question. Are the white collar office jobs in LA more spread out than other cities? A year ago I applied to a lot of GIS jobs in LA and I don't think ANY were downtown. They were in Pasadena etc.

[bhcompy]

Originally Posted by winkosmosis

Here's another question. Are the white collar office jobs in LA more spread out than other cities? A year ago I applied to a lot of GIS jobs in LA and I don't think ANY were downtown. They were in Pasadena etc.

There is no one "job center" in the LA area. They're everywhere. Doesn't matter if it's the dense urban areas like downtown LA, the quiet suburbs like Cypress, or the range of workingclass and middleclass areas in the South Bay, all are full of companies with white collar jobs. I would bet the most centralized job center in the region is Irvine

[timtemtym]

Texas has no income tax and a good chunk of the state is funded off of property taxes. It's much better to be a renter in TX! My parents had a nice four bedroom house with a pool valued at around 120k in a nice, suburban area, their property taxes were about 3200 a year! They are high earners and would likely pay that in income tax to the state living in a place like California.

[JohnSoCal]

Originally Posted by winkosmosis

Here's another question. Are the white collar office jobs in LA more spread out than other cities? A year ago I applied to a lot of GIS jobs in LA and I don't think ANY were downtown. They were in Pasadena etc.

Yes, they are spread all over. That is why it is so important to know where you will be working before looking for a place to live as the Los Angeles metro area is huge and traffic is horrific.