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I DID enjoy the 0% income tax in WA back when I had some income...
But now having a few businesses to file, I get hammered with B&O, use, personal property taxes, so WA gets plenty.
Our state sales is 6.5% and local taxes add to that. (It can be beneficial to live on the OR border (or close to MT) where there is 0% sales tax).
I still feel one of the best USA options is to use SD = 0% income tax (one night per yr domicile req). and register your vehicles in MT = 0% sales tax. It is quite popular with RV and international travelers (PT residents). OR was a bit too close to HIGH TAX CA and WA, so expensive RV's registered in OR get close scrutiny. (and a $1000+ ticket if OR is not your domicile)
C-D really needs a data base type 'senior/relocation - Wiki' where we could fill in the specific details of a destination. (like levy rates ... but as mentioned, that can vary 50% by crossing the street...)
I don't know the state income tax law in SD - but it sounds like Florida. And the trick isn't getting Florida to treat you as a resident - but to get the state where you spend most of your time not to treat you as a resident for tax purposes. Note that there are states where you have to live there more than half the year to be taxed as a resident - but I think there may be others that tax you proportionally (you live in a state for 1/3 the year - you pay taxes on 1/3 your income). Robyn
No no - as one who has lived in generally grossly inflated real estate markets, I surely understand the difference between what a 100K buys in Cleveland Ohio and a 100K in McLean Virginia.
The reference was about putting actual rates that are charged in an area and not simply what someone living there pays which can sound shockingly high or awesomely low. someone mentions that they are paying 1000.00 a month tax in Washington state. Another person says they only pay 1000.00 for a whole year of real estate tax in Wyoming. But does one person have a property assessed at 2 mill in their state/locality but they also live in a premier property while the other person has a 60K assessment on a tract home in a totally different place? Are there homestead issues where assessments vary wildly depending on when one bought their house even in the same neighborhood? The actual rates allow anyone to consider what they would themselves would buy and what their monthly costs would then be.
Again, the 100,000.00 standard simply provides the illustration in dollar form. Some people get boggled by how to apply the rate and showing an example with 100K can help set up a check for the math problem for any value they need to consider. Many people need to see the rate and then see it translated/100K is a good one to relate to for constructing the math equation. I spent enough years with people putting the decimal in the wrong place and either being seriously deluded or hopping mad.
So much information is just not out there when it should be. I have asked real estate agents what the tax rate is while looking at houses and had them tell me that "it's not high" or that " the tax would only be about ......" - When I repeat the question, they finally will admit they aren't sure what the local rate is. To me, that's absurd. This should be the information at the tip of an agent's tongue. As well as information regarding home owner's insurance etc. That's where the anecdotal info comes in. "I use such and such insurance, carry such and such deductible and insure my house for .....at replacement value." Combination of actual figures and then illustrations/examples. It's the teacher in me.................
Ok - too late to be talking math. time for me to retire...opps...already did that....it's time to go to sleep
Even a well-informed agent couldn't help you much where I live. Here in Florida - we have the Save Our Homes amendment - similar to Prop 13 in California - that limits increases in home valuations for Florida residents as long as they don't sell their house. The house will be re-assessed and taxed at fair market value when it's sold (so if the seller has been in the house for 20-25 years - the assessment may go up a lot). Note that this leads to the curious situation where - although our property values are now going down - our assessed valuations may still be going up - playing "catch-up" for years of assessment limitations.
Also - our county - along with others - will probably increase millage rates this year to make up for declining property values.
Then we have Homestead laws that affect the taxable value of our homes (and they seem to change every few years).
IOW - it's all kind of a moving target. Just best to research the areas where you're looking to relocate. Robyn
The house will be re-assessed and taxed at fair market value when it's sold (so if the seller has been in the house for 20-25 years - the assessment may go up a lot).
That should be the default model everywhere.
The median suburban home (in most areas) will turn over about every 10 years or so.
The new sale establishes the market value that can have a specific tax amount set for X years. Done.
Eliminate the state assessment process altogether and let long standing residents get some benefit for being that stable entity in an area which are more than balanced by the more frequent turnovers.
Even a well-informed agent couldn't help you much where I live. Here in Florida - we have the Save Our Homes amendment - similar to Prop 13 in California - that limits increases in home valuations for Florida residents as long as they don't sell their house. The house will be re-assessed and taxed at fair market value when it's sold (so if the seller has been in the house for 20-25 years - the assessment may go up a lot). Note that this leads to the curious situation where - although our property values are now going down - our assessed valuations may still be going up - playing "catch-up" for years of assessment limitations.
Also - our county - along with others - will probably increase millage rates this year to make up for declining property values.
Then we have Homestead laws that affect the taxable value of our homes (and they seem to change every few years).
IOW - it's all kind of a moving target. Just best to research the areas where you're looking to relocate. Robyn
However, the rate of taxation, Robyn, is the same for everyone in that particular locality - again, my point of having the local property tax and all tax rates at the fingertip of those selling real estate and in the hands of those contemplating buying. I also lived in Florida and am famliar with the homesteading issues. Whereas one may buy a house in a non-homesteaded state and have an idea of what one would pay in real estate tax simply by the taxes on the MLS listing, most assuredly in Florida that's a dangerous assumption to make. My first year in Sarasota, I finished out the previous owner's tax amount due....pro-rated on a bill of about 2000.00. The next year, my own bill on the same house was more like 4800. The tax rate was the same for me as it was for all my neighborhood. I was simply the most recent buyer and the new valuation of the house meant I paid much more than the people who bought six years before. Although fortunately Sarasota did not asses at the actual purchase price but instead based on other values. Which was good since I had figured the taxes would shoot up to about 6800 if it was based on what I paid. And then it was bad when the house then plummeted to half the purchase price over the next four years but my taxes surely did not reflect that incredible nosedive....sigh. However, people who live in a place do know things like how often properties are reassessed by the county; whether the county raises rates when assessments fall to offset the reduction in revenue; whether the appeal process is real or a sham in that same location. All knowledge not easily found by a newbie or a perspective relocating retiree....nor info that is ever captured on COL sites that presently exist.
An agent, whether in Florida with homesteading or Virginia without the same, should know the local real estate tax rate for that locality. The rate is what determines what the new owner will pay, combined with the new assessed value that can readily be accessed by calling the local tax office. Other aspects of ad volorem taxes, not based on the property value but assessed to each household, are numbers that can also be included in information.
Yes, it is the responsibility of anyone to find out what something costs prior to relocating to that place and the like. But unfortunately, there are issues that are total unknowns to transplants in many places - things that those who live there are more familiar with. As a non-Floridian, I had no idea how many companies, including USAA, would not write my homeowner's insurance. I had no idea what a wind pool was or to have or not to have National Flood Insurance. Imagine the wealth of information we could impart to each other, those of us who have already run the gauntlet.
Much of the information, though obviously differing depending on what house one buys, has the same base line rules applied. These things shouldn't be a mystery. From recent reading, it would appear that some localities in Tennessee tax what would appear to be a high tax rate, but base it on only 25 percent of the actual value of the house. Now that's a nice tidbit for someone to know before they run their assumed costs of living.
As for changes in mill rates and homesteading laws, they do happen. But most states have laws in affect that do limit the amount of change that can take place in a given time period. it is also political suicide for any politician to institute significant increases in taxation on his or her constituency so good or bad, significant fluctuations are not generally seen in local government concerning tax issues. When they are, you see things like Prop 13 in California or Homesteading Laws in florida where the population forces change within the system to protect their own little patch of paradise.
We all know change will occur - it would have to . But since inaccurate info is out there and touted on websites, I would still assert that a grassroots effort on the part of those who live in places and get up front and personal with the cost of KW by FPL, the best rate and most reliable insurance company for housing, etc and so on could be a real asset to everyone.
Last edited by mzfroggez; 06-06-2011 at 06:26 PM..
Reason: somehow cut a paragraph! not sure it will paste in LOL
Real Estate and health care can be the two largest components but aren't for everyone. Folks who have houses paid for in moderate tax areas and have former employer health care benefits probably have budget components far greater than housing and health care.
Our taxes are around $800/year and our medical insurance is $400/year; but our heating fuel runs maybe $1,000/year
So yes, as taxes and health care expenses go down, other expenses do appear as the biggest expenses.
OMG - property taxes $6,000, heat/electric $1,800, Medicare Part B Premium $1,158, Advantage Plan $0, out of pocket health costs $500 - $2,500. Dental, mostly, and alternative health providers for which insurance won't pay.
Not sure what the goal of this grass roots movement is - you didn't actually state it. But it sounds like it may be to lower taxes. Am I interpreting correctly? Well, local and state governments have cut spending to the bone in most cases and are still looking at how to make further cuts. The money has to come from somewhere, and I'm sure you would be up in arms if your trash wasn't collected and if your local library was closed and if the huge pothole in front of your house wasn't filled. I think all the hoop-la about some states not having an income tax and some states not having a sales tax is overstated because other kinds of taxes will be higher to offset the tax they don't have. Even in a high tax state like California, I don't think my tax burden is terribly unreasonable; taxes are the price we pay for civilization.
sorry - i used political "jargon" to illustrate a concept. "campaign manager" could be translated as "organizer" and "grassroots" was simply to convey a non-professionally orchestrated attempt unlike those seen on retirement and cost of living sites, hyped by the professionals. They tend to be outdated, inaccurate, lacking key componants that truly reflect the cost of living. Sadly, information given by real estate agents can be as vague.
I am well aware of the need to collect money in a locality to fund services - in another life, I was a local council member tasked with the responsibility of finding that balance between peoples' demand for low taxes but at the same time super-services. Not easy - not even possible come to think of it.
Next i served on the staff side of local government and it surely wasn't any easier.
What I had suggested was simply doing a bottoms up approach to capturing accurate information on things such as real estate tax rates in localities where individuals on this board live. The discussion had involved prior to that the unknowables on relocation/the desire for some way to project future costs and I said it would be nice if one could even discover the actual costs that existed today. Which led into the suggestion that tackling that from "informal ambassadors" that live in particular places would be one way to get a truer picture of costs and also allow for a fuller development from those in the know who live there.
no politics - no grover nordquist "no new taxes" pledges - no attempts to secede from the union - just the thought that one could start with a state and then tap other people you know to do some investigative research and be a source of information.
this has become somewhat like the game "telephone" ...........
Last edited by mzfroggez; 06-07-2011 at 12:29 AM..
Reason: missing word - hey , it's 2:30 in the morning...
Beekeeper - Amigo, I'm a long time admirer of your lifestyle smarts and especially that incredible home you built.
Question - does that heating cost number include any recognition for your T&E (time and effort) in securing your fuel source(s)? I know you have a multi-fuel setup (wood, peat, etc.) that you manage yourself. My curiosity is how your matrix compares, in total costs and T&E factors, to a typical "write the check" situation for most folks' heating costs.
Last edited by Pilgrim21784; 06-07-2011 at 08:01 AM..
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