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There is a lot more to figure in than property taxes when making a move. This past summer I moved from a more remote suburban town to a nearby college town that has public transportation and is walkable to most things I do on a daily basis. I drive into the city twice a week to teach a class, and here it is half the distance I used to travel. Now I spend $20/week for gas, whereas in my previous location I spend at least $40 and often more. So I was spending $20 more a week x 52 weeks = $1,000, which is the difference between my property taxes then and now. Now, here, I can choose to do away with driving if I ever wanted to, as the bus and senior transport are within a block, as is the market. So in my move I pay more taxes but the same amount less in car gas.
Other amenities are free events and free entertainment related to the college, whereas before I had to pay to go to movies and concerts. I haven't figured the savings yet, but it's significant.
So while property taxes can be a nemesis for many seniors, there are mitigating factors. I realize I had vastly underestimated what it costs to run a vehicle, and since I hate to drive (unless it's a long distance trip), I can see where the obvious place is to cut back in older age.
I did not choose my retirement state for tax breaks, cheaper cost of living or weather but once I got here, I couldn't get over how much more disposable income I had in retirement compared to when I was working. Sales tax is high but I'm not much of a shopper and do it mostly online. I rent so I'm not spending money on property taxes, house repair or house/property maintenance although some of that is undoubtedly built into my rent. Still, for a twice as large apartment, I'm still not paying the rent I paid in 2007 in Maryland by at least $300. My electric bill is cheaper now than what I was paying when I lived in NY in the 1980s/90s in much smaller apartments. If I ever move again, though, I would definitely have to consider taxes and cost of living because no matter where I went, it would be higher than what I'm used to now.
.....The funny thing I noticed about "low cost" and "low tax" states is that they are generally states nobody really wants to live in. You want to retire and live in freezing cold weather? Or in the southeast? No thanks. I would live here, CA or FL only.
If "nobody really wants to live in" a state, there is less population demanding more services. Less voters demanding more government services usually means less taxes. Therefore, if you want to keep your taxes down, leave the city and try not to let anyone follow you.
Interesting. Who would have thought Iowa and Nebraska would have made the list? And I'm surprised New York State did not make it. Our impressions are not always totally accurate. For example, everyone knows that California is a high tax state, so its inclusion is no surprise, but when you look at the details it is not really worse than the other nine, at least not to a substantial degree. Yet people talk as if California were a unique horror in the USA, and it's just not so.
I take issue with the aritcle's statement, "Do not live here for your second act". There are many other factors besides taxation in choosing where to live in retirement, cost of living being a major one. Despite their tax status, I'll bet Iowa and Nebraska have a fairly low cost of living, and I'll bet further that the low cost of living would save a person more than the high taxes would cost. Who would want to live in Iowa or Nebraska? That's yet another issue.
Some everyday items tend to remain off our radar, such as utilities. In California, if you don't live in the desert (very high summer heat) or the mountains (very cold winter weather), you don't have to run the heat or the air conditioning very often. This could save more than what Californians pay in state income taxes, depending on one's income of course.
While the article is interesting and useful, I think it reflects an over-emphasis on taxation issues to the exclusion of so much else. At least that is my take on it with my middle-class income. People with high incomes also have a higher stake in all this.
One also has to look at liabities verus hw or if they are being paid for to figure future liabitles coming. that is very important especailly now.
And real property tax numbers can be hard to find. We're from Pittsburgh PA (moved to CA), and my mother always told me my sister paid over 6k in property taxes.... but when I looked up her house on Zillow, it listed her property taxes as 2K.
So my next call to her I asked, after telling her it was okay to tell me it was none of business.... but she said her Allegheny County property tax was 2k. then she paid School taxes, which is tied to her property.... and also municipal taxes also tied to her property -- so all in all she pays just over 6K a year in taxes tied to her property.
And I told her I paid less than 2K a year -- but I have horrible roads, terrible schools and when you dial 911 you get put on hold for 15 minutes....
I'd rather pay 6K and have services....
And figuring out property taxes can be even harder in states like FL and CA where property tax increases are to a large extent capped as long as you live in your house - but can be raised when someone one buys your house if the property value has gone up. Also - although I wouldn't swear to it - I think we now have some degree of "portability" in terms of our property tax savings if we move from one house in Florida to another. IOW - I wouldn't count on paying the same amount in property taxes that a current owner is paying.
FWIW - we have paid about the same amount in property taxes the last 15 years due to the Save Our Homes tax laws. Our county spent a lot of money when property values were going up and lots of new houses were being built in terms of improving services. Roads. Schools (I think we now have the #1 rated school district in Florida). Emergency services (we used to have things like volunteer fire departments - but everything is more professional these days). Now that property values have gone down - our tax rates are going up a bit so government revenues stay steady (our overall tax bill will be about the same). IOW - once you know what your taxes are - they are pretty likely to stay about the same if you keep living in the same house. Robyn
If "nobody really wants to live in" a state, there is less population demanding more services. Less voters demanding more government services usually means less taxes. Therefore, if you want to keep your taxes down, leave the city and try not to let anyone follow you.
Things like maintenance can be very expensive in rural areas - because there aren't a lot of people - and there may be a lot of roads - with a lot of potholes - or snow removal needs - or whatever. Also - the cost of transporting children to school 20 miles each way can be very expensive. Etc. Etc. Robyn
I can't imagine getting anything out my 5th great grandfather anymore....
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