Taxes (Pittsburgh, Butler, California: sales, real estate, condo)

[webweb]

I was wondering why does the Pittsburgh area have very high real estate taxes?

[Dan Corcoran]

I think the answer anywhere in the country is that the more services a city provides, the higher the taxes must be to pay for them. How efficiently the city provides those services is another matter, but in general, the higher the taxes the more services are provided. I'm sure many Pittsburgh residents might argue they aren't getting their money's worth, but a lot of the labor is union labor, so that, too, adds to the cost.

I live in rural Colorado. We have very low property taxes, but our roads are gravel, there is no county-provided water, no animal control, etc. You get the picture....

[Tallysmom]

Originally Posted by webweb

I was wondering why does the Pittsburgh area have very high real estate taxes?

My sister lives in Allegheny County, and this happened a number of years ago, so I may have some it wrong.... anyone please correct me.

Pittsburgh economy is sort of stagnant, and has been for a while. They were having a hard time attracting new business and keeping it, and have not increased their business tax base to help pay for the services they are expected to provide. At the same time, older people are staying in their homes and the county isn't generating the transfer taxes.

In other words -- the county needed money. So they decided to update the real estate assessments, and the company they brought in put in software that assessed homes at their current value -- and charged the percentage on that. So what happened -- your 1990 tax bill was 800.00, but your 1991 tax bill was 4200.00.

And although you could fight the assessed value as high, and many did and many won, more people simply paid.

My mom lives in Cranberry Township, where I was raised, and her taxes are one third of what my sister in Allegheny pays, and has the same services.

The biggest problem Pittsburgh faces is the same problem that most smaller cities face -- the combining of all the facets of a city, without concentrating on just one. I live now in Oakland CA, and our outgoing mayor caught flak for being too business oriented and not paying attention to the poor people... but as Jerry Brown said over and over, if you don't have anything putting money in the city coffers, you don't have any money to give the poor people the services they require.

It's just a very hard mix to get right...

[Mr. Mon]

Originally Posted by Tallysmom

My sister lives in Allegheny County, and this happened a number of years ago, so I may have some it wrong.... anyone please correct me.

Pittsburgh economy is sort of stagnant, and has been for a while. They were having a hard time attracting new business and keeping it, and have not increased their business tax base to help pay for the services they are expected to provide. At the same time, older people are staying in their homes and the county isn't generating the transfer taxes.

In other words -- the county needed money. So they decided to update the real estate assessments, and the company they brought in put in software that assessed homes at their current value -- and charged the percentage on that. So what happened -- your 1990 tax bill was 800.00, but your 1991 tax bill was 4200.00.

And although you could fight the assessed value as high, and many did and many won, more people simply paid.

My mom lives in Cranberry Township, where I was raised, and her taxes are one third of what my sister in Allegheny pays, and has the same services.

The biggest problem Pittsburgh faces is the same problem that most smaller cities face -- the combining of all the facets of a city, without concentrating on just one. I live now in Oakland CA, and our outgoing mayor caught flak for being too business oriented and not paying attention to the poor people... but as Jerry Brown said over and over, if you don't have anything putting money in the city coffers, you don't have any money to give the poor people the services they require.

It's just a very hard mix to get right...

Butler County (home of Cranberry Twp) also hasn't reassessed their properties since 1969, thus artificially subsidizing the county's low taxes. It's going to bite hard if and when the state eventually mandates a re-valuation. That $300,000 McMansion won't seem like such a good deal then.

[Dan Corcoran]

Living in a geographically huge county with only 25,000 residents (many of whom live on the Ute Mountain Indian reservation and live below the poverty line), I've come to understand in a very vivid way how government works.

There is no free lunch or sugar-daddy. Anything that the people of this county want, they must pay for. People with higher incomes tend to favor higher taxes to pay for better roads, etc., but those living on the margin want taxes to remain the same or be reduced. Having lived in large cities, these simple truths are masked by the sheer size and diversity of the population.

I believe Pittsburgh lost something like 20% of its population between 1975 and 2005, yet the streets, sewer systems, water lines, etc., remained the same. The numbers alone tell the story...

[Tallysmom]

Originally Posted by Mr. Mon

Butler County (home of Cranberry Twp) also hasn't reassessed their properties since 1969, thus artificially subsidizing the county's low taxes. It's going to bite hard if and when the state eventually mandates a re-valuation. That $300,000 McMansion won't seem like such a good deal then.

Luckily -- Mom doesn't live in a McMansion -- just a McRanch....

So is that why the property taxes went up so in Allegheny -- they hadn't reassessed in so long? I know in Beaver County they use a weird system where it looks like they take half was the house sold for and that's the assessed value, because that's where we were looking to move maybe.

I sort of agree with Dan -- our public works need funded, and you got to fork it over somehow... I can't remember where I saw this, but in some retirement/taxes site sponsored by Money Magazine, they rated all the states with all the various taxes, and essentially -- you end up paying around 10%.

Look at it this way -- if you have high property taxes, that keeps your sales taxes down -- I live in California with Prop 13, and my taxes on a house worth around 500K are less than two thousand dollars. (1930.00) But our sales tax is wandering around 9%. On everything but food you cook yourself. PA has had the same 6% sales tax since I lived there in 1979... and it's not on "neccessities" -- clothing and food.

No one likes to pay taxes, but they are a part of our civilized world...

[pghsebring]

Originally Posted by Tallysmom

Look at it this way -- if you have high property taxes, that keeps your sales taxes down -- I live in California with Prop 13, and my taxes on a house worth around 500K are less than two thousand dollars. (1930.00) But our sales tax is wandering around 9%. On everything but food you cook yourself. PA has had the same 6% sales tax since I lived there in 1979... and it's not on "neccessities" -- clothing and food.

No one likes to pay taxes, but they are a part of our civilized world...

You realize that if you spend 100k a year on stuff, you'll pay $9k in sales tax plus your 2k in home taxes, for a total of 11k, right?

Here, with a 7% sales tax (not 6 in allegheny, sorry) you'd pay 7k on 100k worth of shopping, plus on a 500k house, you're RE taxes are around 12k, for a total of 19k paid out. (based on my 100k assessment = 2400 in taxes/yr).

Which is the better deal? Someone living here would have to buy $400,000 more PER YEAR, every year, in taxable goods in order for this place to be a better deal in taxes, to make up that 8k difference. I don't know ANYONE that spends over 400k per year on "sales taxable" items. Realistically, i don't know anyone that even spends 100k on taxable items per year, so you're probably saving even more than 8k, probably closer to the 10k in difference in RE taxes.

I always wondered how people could afford homes in CA, turns out their taxes are a tiny sliver compared to the mortgage, not 1/4 - 1/3 of their mortgage.

Stuart

[Dan Corcoran]

Stuart, I think you left out one factor. The $500k house in California is probably a ticky-tacky 2-bedroom model (not trying to insult Californians, just indicating you don't get a lot for $500k in CA), whereas the $500k PGH house is probably either a new McMansion in the suburbs or a three-story older house closer in, with great workmanship from days gone by. I'm not in the real estate business, but it would be interesting to see the total tax impact based on equivalent housing (quality of construction, size, location), not just housing cost.

[Tallysmom]

Originally Posted by Dan Corcoran

Stuart, I think you left out one factor. The $500k house in California is probably a ticky-tacky 2-bedroom model (not trying to insult Californians, just indicating you don't get a lot for $500k in CA), whereas the $500k PGH house is probably either a new McMansion in the suburbs or a three-story older house closer in, with great workmanship from days gone by. I'm not in the real estate business, but it would be interesting to see the total tax impact based on equivalent housing (quality of construction, size, location), not just housing cost.

None taken -- "little Boxes" was that song written about the Daly City tract homes designed with a modern eye in the fifties by Henry Doegler -- considered to be quite a rare find and very desirable right now by mid century modern aficionados. We're a growing bunch of architectural hounds.... I have a definite preference for contemporary ranch homes from the fifties.

You are right, Dan -- my house is a little over 1000 square feet, and is alas -- a typical California bungalow. It's adorable and better than that, very well made. But hubby is a collector and I quilt and we have nine cats because we got into cat rescue. The house is cramped, and the furniture can only go one way because there is no other configuration that would work.

Not to mention we have no land. I grew up on two acres, and it kills me that I can hear my next door neighbor take a shower with both our windows closed. And our tiny non yard is like twice the standard yard for the newer housing and closer into the city center yards....

I can't wait to come back home to PIttsburgh to find my contemporary ranch home on LAND -- real land.

[Dan Corcoran]

Yeah, I lived on the eighth floor of a condo in downtown Houston for ten years. I enjoyed it, but we now have 70 acres and can see three states. Anyone in Pittsburgh want to do a trade? (My wife wants to be closer to big city stuff...this was my dream, not hers).