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BTW I paid $220k for my house so I don't live in a "big" house.
That's nice.
Anyway, its like complaining that you're paying more in sales tax for a Rolex than your neighbor did for their Timex. Both watches tell time. Yours was more expensive, so the tax on it was higher. That's how taxes work.
Why is it fair that I pay double the amount of taxes as one of my co-workers just because my house is worth 2 x's hers? We both have the same amount of land that the house sits on, yet she has 2 kids in school (I have none yet) and she using the same amount of water (if not more) and trash services I use. So I have to pay double just because I decided to live in a nicer area with a nicer house, even though she uses more services than me? How is that American?
Because property taxes are progressive. The assumption is if you have a home worth twice as much as someone else, you can afford to pay the additional taxes. No, this isn't always the case, but more times than not it holds true.
Quote:
Originally Posted by saturnfan
Not taxing "paper" profits is the same as in stocks and bonds. No profit is taxed until it is realized.
The money for basic infrastructure (roads, schools, police, utilities, etc.) has to come from somewhere. If its not coming from property taxes, then where is it going to come from?
BTW, you do pay for "paper" profits with many investments. In a mutual fund, you pay capital gains taxes when the fund manager rebalances the investment (e.g., sells some stocks or bonds to buy others). With savings accounts or CDs, any interest earned is taxed as regular income, even if the interest is re-invested.
Anyway, its like complaining that you're paying more in sales tax for a Rolex than your neighbor did for their Timex. Both watches tell time. Yours was more expensive, so the tax on it was higher. That's how taxes work.
The difference is that, if I buy a Timex, it normally won't appreciate in value to the price of a Rolex. Then, if watches were taxed, I'd be paying on a Rolex even if all I could afford was the Timex I bought years ago.
Taxing paper home profits is disgraceful, and ending it was one of the few ideas CA got right. I lived in L.A. when $20K homes inflated to $200K+. Many seniors were forced to sell and move because of paper profits they could only realize by selling the property.
Home equity loans still require monthly payments and may not help those on fixed incomes.
The next buyer will know by comps what their new tax bill is and can buy what they can afford. The previous owner had no idea of the new value when they purchased the property.
At a minimum, this should apply to seniors, lower income residents, and the disabled.
So under this scenario, the county, town, whatever, doesn't revaluate existing homes. They stick it to the new homeowners. Consider it sort of an "impact fee".
Ok, let's say I buy that. So the corollaries:
1. Person A is in their house for 20 years. They decided they need an equity loan. But since they've been paying the "old" tax rate (because that's what's fair after all--they're not "transplants") they can only get 80% LTV of their OLD valuation---20 years ago.
2. Person B wants a reverse mortgage. See above.
3. The fire or police departments need more money. About 60% of the homes in the areas are paying on the "old" valuation. So they have two solutions: slap the "old valuation" people with an additional bill to make up the shortfall or go for an override which affects everyone. And since the "old" people are paying less, then they wait X% longer for a response to a 911 call.
4. Person C sells the house they've been in for 20 years and buys another--townhouse, bigger house, whatever. Since it's a new purchase, they get hit with the huge tax bill that's even larger than what it would have been under the existing reality plan because the new people and new purchases have to carry the burden for the "old' people (non transplants).
Is that how your plan works?
Nope, not how it works. Coming from CA and prop 13 land, I know this. If you want a equity loan or reverse mort, they do an appraisal for current value. Fire & police, not sure how they get that, but it comes from something other than property taxes. New areas get hit with Mello-Roos taxes with pay for the new infracstructure for that area (schools, roads, etc), but you know that going in, they tell you what it is when you buy.
Person C won't sell...they will remodel their current home so they don't have to pay the taxes on a new home with its new value. To me, it encouraged people to stay and invest in their neighborhoods, which brings all value up.
It worked wonderfully and made sense...I wish we had it here.
Anyway, its like complaining that you're paying more in sales tax for a Rolex than your neighbor did for their Timex. Both watches tell time. Yours was more expensive, so the tax on it was higher. That's how taxes work.
If you read my original post I was joking (hence the ). Lighten up a bit. I'm just saying that if someone is going to complain about paying higher taxes on a house that appreciated, then we all have the right to complain that everyone does not pay the same in taxes.
So sick of people bitc**ng about transplants destroying their lives as they know it. No one is complaining when the equity in their houses go up because of higher purchase prices. You know, many transplants are enticed to move by corporations that are relocating - no is complaining about the company moving there and building up the local economy. No one is complaining when the Whole Foods or Traders Joes popped up in the area because the area is growing and now the demand is there. No one is complaining about SouthPoint Mall that went up because the area is growing and now demand is there. Taxes are going up everywhere and they will continue to go up just like everything else, you know a pack of gum used to cost $0.05 cents at one time - not anymore. For crying out loud, stop beating the transplant issue like a dead horse!
Well I am as happy as a pig in $hi+ with what I pay in taxes in all. I have absolutely no complaints about the amount I have to pay. Now if we talk Federal taxes, I will have a different answer.
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). Lighten up a bit. I'm just saying that if someone is going to complain about paying higher taxes on a house that appreciated, then we all have the right to complain that everyone does not pay the same in taxes.
