Tax Confusion....County, Twnsp, Municipalites, etc, etc (Pittsburgh, York: for sale, real estate)

[beth ann]

We live in Northern Va outside DC where we have a county-wide government. One county-wide school system, county parks and rec, county taxes, county libraries, etc. Our taxes are less than 1% for all the services above.

Our taxes are based on the county's assessed value of our homes. Homes are assessed evey year. For example, our current home is assessed at approx 600,000 (only due to rapid appreciation the last 7 years when it's value literally doubled) and all our annual taxes are under 6k.

Pgh is subdivided into so many municipalities, townships, etc. I've gleaned there are state, county and school taxes and other taxes, too. It's somewhat confusing, coming from a county-wide government system.

It's also misleading to think (as we initially did) that Pgh may be more affordable. Although the housing prices are lower, taxes seem like they're almost triple, compared to where we live now.

I think we'll be outpriced in the city (don't they have anohter additional tax on income or wage?)

Can someone clarify the tax structure? How can I calculate it easily? Do I have to investigate the tax assessment? If I'm searching online for homes for sale, are all the above taxes included in the listing?

Thanks so much.

[guylocke]

Many people have that initial impression, hopefully someone can clear it up, I would confuse you more. LOL. I know several people leaving DC for Pittsburgh who are much better off, even with the higher property tax (which could change sometime in the near future as the Casino's in the state were built to help this situation).

Here a few little things to remember, too.

PA taxes no clothing or food (aside from prepared foods - statistics show that food costs alone are the second biggest pay-out per year after morgage).
PA does not tax retirement (if you plan on staying for the long haul - VA does, btw).
PA has no luxery tax (which is dreadful in VA depending on what kind of lifestyle you live, my cousins get hit VERY hard).
The cost of living in Pittsburgh is far less than the DC area. Have you checked out the differences in cost of energy?
Pittsburgh is consistently ranked among the most affordable cities in the country of its size and the rankings I've seen include Allegheny county and state taxes as well.

[la_torquemada]

Basically, you can't investigate it *easily*, but a realtor can help you figure out all the taxes that apply in your area. Here's typical scenario of taxes you will be faced with:

-- Town, school district, and state income taxes. The town and school district taxes are often 1% each, though some boroughs and school districts do not have income tax, using solely property tax instead. PA state income tax is 2%. This is on your entire earned income -- there are no deductions.

-- Town, school district, and county property taxes. These are given as mill rates (dollars per $1000 dollars of assessed house value) and vary widely by area. The method of property assessment also varies, so that in some places your assessment is similar to your house price, where in others it is some smaller percentage of the price.

-- Town, county, and state sales tax on all items except food and clothing. This varies from I think 6% to about 7.5% depending on the location.

-- If you drink much, there are also fairly high taxes on poured drinks and wine and liquor must be purchased in state stores, which also charge a premium similar to a tax.

In short, the taxes are high. However, everything else is cheaper. Houses are very cheap -- you can buy a brand new suburban house or a beautifully fixed up Victorian house in lots of nice neighborhoods for $200K. $500K gets you a mansion just about anywhere. You can easily find perfectly nice, more modest homes for under $100K. Groceries are cheaper than many places I've lived too.

If you have a high salary, then it behooves you to do the math and figure out which is going to hit you harder, income tax or property tax. You may be better off buying a house in the suburbs where income taxes are lower.

If you do a Google search on, for instance "McCandless PA taxes," you'll find sites that detail the taxes for that town. Be sure to find out what town a real estate listing is *actually* in -- sometimes the designation the realtor uses is not the actual township the house is in.

[PghREA]

-- Town, school district, and state income taxes. The town and school district taxes are often 1% each, though some boroughs and school districts do not have income tax, using solely property tax instead. PA state income tax is 2%. This is on your entire earned income -- there are no deductions.


Are you sure you live in PIttsburgh?

State Income Tax is 3.07%

Wage Tax in most municipalities is 1%

Wage Tax in the City of Pittsburgh is 3.85

[la_torquemada]

LOL -- for some reason I thought the state was 2% -- did it used to be?

I meant to say local taxes were 1% or 2% and, since you might have three kinds that would add up to 3-4% total.

But you're right PghREA, I obviously haven't been paying attention -- no wonder my taxes seemed so insane last year...

[PApisces]

Originally Posted by la_torquemada

LOL -- for some reason I thought the state was 2% -- did it used to be?

I meant to say local taxes were 1% or 2% and, since you might have three kinds that would add up to 3-4% total.

But you're right PghREA, I obviously haven't been paying attention -- no wonder my taxes seemed so insane last year...

Yea, Wage tax used to be 2% when I lived there 7 years ago. Also, I thought there used to be a deduction. Now there is not. :-(

After having read the tax rate increases, I'm starting to think Taxsylvania is right up there with Taxachusetts! :-(

[PApisces]

Wow! They raised the $10 occupational tax too??? What the hell is PA thinking????

The new occupation tax: How not to treat the working poor

[guylocke]

When taking into account base-rate state taxes, average local taxes based on income, and federal taxes, Pennsylvania ranks 18th most heavily taxed state in which to live which is just a tad more expensive than average, believe it or not.

Virginia is ranked 20, only a wee bit better than Pennsylvania. Massachusettes is 6. In this regard, PA is better off than every one of its neighbors except WV (who wants to live there?) and VA. Ohio is 16, New York is 2, New Jersey is 3, and Maryland is 13.

PA is pretty much down the middle, it NEVER ranks among the highest and NEVER ranks among the lowest in any tax, including propery.

[la_torquemada]

While the taxes here may be middle-of-the-road what always seems striking to me is how little we seem to GET for them. I have never lived anywhere with such terrible roads, schools, park facilities, you name it -- if it's run by a PA govt authority, it pretty much sucks. I know a lot of that is due to the population decline, but it really does seem like we get a particularly poor value for our tax dollars here.

[guylocke]

I have never lived anywhere with such terrible roads, schools, park facilities, you name it -- if it's run by a PA govt authority, it pretty much sucks. I know a lot of that is due to the population decline, but it really does seem like we get a particularly poor value for our tax dollars here.

I agree with this in part. I don't agree with the schools part. And you're right, a lot of local and state-wide politics do not seem to be very efficient and I often do wonder where all the tax money goes. There is one thing, though, you may not have considered. Have you ever looked into how PA takes care of their elderly population? We have some the leading programs and initiatives in the country and a lot of state money is poured into this demographic. People are finding out PA is a great state to retire in, which could be good or bad. LOL.

PS. Pennsylvania does not have a population decline.