No income tax (WA) vs potentially higher property gains (OR) (Portland: house, buying)

[mixtape]

Discussing this with a friend the other day and wanted to hear everyone's opinions on what would make more financial sense?

Assuming early 30's with an income of roughly $150k (before taxes, working from home- doing contract work via my LLC) looking to purchase a house (500k max):

1) Living in Vancouver and pay no state income tax

or

2) Pay income tax in Portland ($13499/yr). However, home values in inner Portland will increase quicker than in Vancouver.


Thanks in advance for your opinions

[Nell Plotts]

Working from home as an employee or a consultant/contractor?

[mixtape]

Originally Posted by Nell Plotts

Working from home as an employee or a consultant/contractor?

Great question: As a consultant (LLC). Let me go add that to the original post, thanks!

[Dhult]

Originally Posted by mixtape

Discussing this with a friend the other day and wanted to hear everyone's opinions on what would make more financial sense?

Assuming early 30's with an income of roughly $150k (before taxes, working from home- doing contract work via my LLC) looking to purchase a house (500k max):

1) Living in Vancouver and pay no state income tax

or

2) Pay income tax in Portland ($13499/yr). However, home values in inner Portland will increase quicker than in Vancouver.


Thanks in advance for your opinions

I guess you would also need to know the property tax rate based on the 500k property in Vancouver vs Portland as well since you are buying.

[mixtape]

Originally Posted by Dhult

I guess you would also need to know the property tax rate based on the 500k property in Vancouver vs Portland as well since you are buying.

So far, I've gather that:

Vancouver: $13.73 average rate per $1,000 of assessed value
Portland: $15.00 to $20.30 per $1,000 of assessed value

However, from the property tax history of properties of roughly the same asking price, there is a wide range of actual property taxes. Old homes in inner Portland may have a lower assessed value but a much higher asking price, while homes in Vancouver's assessed price and asking price are more similar to each other from what I've seen.

[Nell Plotts]

Originally Posted by mixtape

Great question: As a consultant (LLC). Let me go add that to the original post, thanks!

Business & occupation tax

http://dor.wa.gov/Content/FindTaxesA...andOrates.aspx


Note that this is a gross receipts tax.

[bler144]

My first reaction is that, on $150k a year, you don't need to obsess about trying to min/max the finances. You might come out a few percentage points ahead, but realistically you should have plenty of discretionary income left over either way.

I'd say pick based on just what appeals to you more.

Remember that, while Inner Portland prices *probably* will rise faster, really nothing's guaranteed.

[eric351982]

Move to Portland. Vancouver is a dark, dark place.

[Annilyna]

I don't think you mentioned if you're familiar with both areas you are considering living in. I would go for where you would be more comfortable and happiest - which I doubt is only based on financial decisions. Do you have more friends or family in one area or the other? Have you spent time and enjoy one area over the other? I would factor in the local culture, entertainment and leisure options, housing options, etc. in your decision as well.