Why are Texas Property rates extremely High, highest in nation (Austin: sales, real estate)

[FlyDrive100b]

Texas property taxes, a complex subject , few don't have the right

answer but I want to poll readers, I have done some research on this

topic and know some of the answers which keep getting crazier, but what do

you think or at least perceive as why property taxes are high, highest in the

nation as a matter of fact although the dollar amount may be a bit lower to

due lower priced homes (more on that latter , its a catch).

I will do a poll, it may surprise you the options

[doctorjef]

I don't understand this. I've paid property taxes in Austin and still pay property taxes on natural gas wells I own in Denton Co. I can tell you that property taxes in TX are a lot lower than they are in my neighboring state of New Jersey. OTOH, I do pay lower residential property tax in New Castle County, Delaware than I did in Travis County, TX.

[Cha Ching]

Because there is no state income tax.

[doctorjef]

I wonder about that. Delaware has only a moderate state income tax and no sales tax at all, plus ridiculously low property taxes. The state does make money on some other things, like real estate title transfer fees and incorporation fees, but I'm not sure that you can say that higher property taxes are all down to no state income tax in Texas.

[stan4]

I'd rather be taxed on property (I have a choice to buy cheaper and smaller property) than fork over income taxes any day.

[doctorjef]

That doesn't make sense to me. Would you really choose to buy a tiny, too-small house in order to avoid property taxes? And would you say you'd rather pay sales tax because you can choose not to buy stuff, as opposed to being taxed on your income? State income taxes are deductible on your federal income tax. Wise up! And in Delaware, at least, the state income tax isn't much of a burden (nor was it in Colorado when I lived there).

[stan4]

Yes, I would. I would much rather have a federally imposed sales tax (on top of local taxes) than a progressive income tax system. Plus, with the ability to vote on bonds and having my vote count for more, I can have more control over where my property taxes go and how they are used.

[FlyDrive100b]

Originally Posted by doctorjef

I wonder about that. Delaware has only a moderate state income tax and no sales tax at all, plus ridiculously low property taxes. The state does make money on some other things, like real estate title transfer fees and incorporation fees, but I'm not sure that you can say that higher property taxes are all down to no state income tax in Texas.

I recently listed a poll list the top 5 options, or pick other and list reason in post,

there is a lot more to the story.

[Cha Ching]

Originally Posted by doctorjef

I wonder about that. Delaware has only a moderate state income tax and no sales tax at all, plus ridiculously low property taxes. The state does make money on some other things, like real estate title transfer fees and incorporation fees, but I'm not sure that you can say that higher property taxes are all down to no state income tax in Texas.

Yes, but Delaware's population is considerably smaller. I would think that would play into it somewhere.

[orbius]

In the last tough economy in the 80's. Your above average new house in Texas was 75k. I believe the homestead exemption back then was 15k though I'm open to being corrected if that wasnt the case.
Back then Texas truly was a tax bargain. Most people were paying property tax on 60k assessed value.

Contrast that today where the average house assesed value is around 150k in Texas. Thats close to 3 times as much assesed home value as people were paying on just 25 years ago. Also the tax rate itself has increased quite a bit over those years. I wouldnt be shocked if people are paying 4 times as much property tax as they were 25 years ago in a pure dollar value.

If this recession deepens is the Texas property tax rate tenable or is it going to cause a total collapse of Texas housing? Will the ever growing numbers of people forced to rely on unemployment have the money to pay their exceptionally high property tax at the end of the year?

Given this scenario I think 'Property taxes are so high because: Texas hasnt experienced a deep recession in recent years'. Could be added to your choices.

No one knows if the current tax structure is tenable in a deep recession. We'll find out more information at the end of year, beginning of next year. If theres a massive spike in foreclosures next year, and it starts to devastate real estate values. Something that will cause even more waves of foreclosures as people go underwater. Then I think Texas will be forced to recognize its current tax burden on homeowners is untenable. The state, if its realistic, will have to recognize that a state income tax is necessary at this point.