4 ms·

> On the housing side, I suspect consumers purchase the house that their cashflow can comfortably support, not necessarily the one where they believe it is corr

> On the housing side, I suspect consumers purchase the house that their cashflow can comfortably support, not necessarily the one where they believe it is correctly valued, because the assumption that house values only increase means purchasing a well constructed house is almost never a "bad deal." I'd agree with this. I think housing in my area is wildly overpriced, but I still bought a 100 year old condo for a solid million. Compared to renting, I got double the space, plus parking, plus a private garden, plus an outdoor patio, and my monthly costs went up about 25%.

galangalalgol 5y ago
Is there a difference in the property tax there for multifamily vs single family dwellings? Around here people pay almost double their mortgage in property taxes for a single family dwelling, but landlords have managed to get much lower taxes for multifamily dwellings.
- helen___keller 5y ago
  In my municipality I'm not aware of a difference between multifamily vs single family, but there aren't many single families anyways. Property tax is absurdly low, with a very nice deduction for owner-occupied units. My effective tax rate is around 0.3% (Municipality: Cambridge, MA)
  - madars 5y ago
    Cambridge is atypical: it has tons of biotech, FAANG offices, etc to tax, so the city ends up having one of the lowest residential property tax rates in the state. In fact, Cambridge's residential rate is almost 2x less than those of each of its neighbors (Arlington, Belmont, Boston, Somerville, Watertown. https://joeshimkus.com/MA-Tax-Rates.aspx https://joeshimkus.com/MA-Tax-Rates.aspx)
    - helen___keller 5y ago
      yep, and to GP's point when i was looking for housing, my budget was higher in cambridge for precisely this reason
- shados 5y ago
  It depends where, as cities have some level of freedom in the shenanigan they implement in their tax structure. Normally though, taxation is just a matter of the property value. Often, cities with lower housing cost have higher tax rates (because the people working the sewers aren't any cheaper and they need to get paid). Many cities also have owner occupant or primary residence abatements, so the landlords pay more in taxes than the resident owners. Some cities though split homes in one of several categories, and single families may be taxed differently from multi family or condos. Sometimes multi family and condos are taxed less to encourage higher density construction, but it wouldn't change anything if you're a landlord or not (aside for the tax abatement). Landlords can deduct some of their expenses from their business' taxes though, and I think (don't quote me) their property taxes are part of that. Your millage may vary.
  - lotsofpulp 5y ago
    > Normally though, taxation is just a matter of the property value. Total tax burdens are a function of government expenditures. Property tax is a rough attempt at scaling the tax burden to a person’s wealth, but it has many caveats varying in many jurisdictions. However, government debt is a big part of expenses, and each city and state’s debt can vary greatly than from another. Here is a good website ranking the big cities and all the states: https://www.truthinaccounting.org/news/detail/financial-state-of-the-states-2020 https://www.truthinaccounting.org/news/detail/financial-stat... https://www.truthinaccounting.org/news/detail/financial-state-of-the-cities-2021 https://www.truthinaccounting.org/news/detail/financial-stat... I would expect cities and states where the per taxpayer debt burden is a standard deviation or more from the mean to have measurably higher taxes and/or fewer government services/investments.
    - shados 5y ago
      yes, though I'm not sure what it has to do with the original question. Someone is comparing 2 types of property in a given area. The city's tax burden is a constant between the two in that scenario, so the only variable will be how the tax burden is implemented by that city, which is usually property value with some abatements based on residency status and type of properties.

galangalalgol 5y ago

Is there a difference in the property tax there for multifamily vs single family dwellings? Around here people pay almost double their mortgage in property taxes for a single family dwelling, but landlords have managed to get much lower taxes for multifamily dwellings.

helen___keller 5y ago
In my municipality I'm not aware of a difference between multifamily vs single family, but there aren't many single families anyways. Property tax is absurdly low, with a very nice deduction for owner-occupied units. My effective tax rate is around 0.3% (Municipality: Cambridge, MA)
- madars 5y ago
  Cambridge is atypical: it has tons of biotech, FAANG offices, etc to tax, so the city ends up having one of the lowest residential property tax rates in the state. In fact, Cambridge's residential rate is almost 2x less than those of each of its neighbors (Arlington, Belmont, Boston, Somerville, Watertown. https://joeshimkus.com/MA-Tax-Rates.aspx https://joeshimkus.com/MA-Tax-Rates.aspx)
  - helen___keller 5y ago
    yep, and to GP's point when i was looking for housing, my budget was higher in cambridge for precisely this reason
shados 5y ago
It depends where, as cities have some level of freedom in the shenanigan they implement in their tax structure. Normally though, taxation is just a matter of the property value. Often, cities with lower housing cost have higher tax rates (because the people working the sewers aren't any cheaper and they need to get paid). Many cities also have owner occupant or primary residence abatements, so the landlords pay more in taxes than the resident owners. Some cities though split homes in one of several categories, and single families may be taxed differently from multi family or condos. Sometimes multi family and condos are taxed less to encourage higher density construction, but it wouldn't change anything if you're a landlord or not (aside for the tax abatement). Landlords can deduct some of their expenses from their business' taxes though, and I think (don't quote me) their property taxes are part of that. Your millage may vary.
- lotsofpulp 5y ago
  > Normally though, taxation is just a matter of the property value. Total tax burdens are a function of government expenditures. Property tax is a rough attempt at scaling the tax burden to a person’s wealth, but it has many caveats varying in many jurisdictions. However, government debt is a big part of expenses, and each city and state’s debt can vary greatly than from another. Here is a good website ranking the big cities and all the states: https://www.truthinaccounting.org/news/detail/financial-state-of-the-states-2020 https://www.truthinaccounting.org/news/detail/financial-stat... https://www.truthinaccounting.org/news/detail/financial-state-of-the-cities-2021 https://www.truthinaccounting.org/news/detail/financial-stat... I would expect cities and states where the per taxpayer debt burden is a standard deviation or more from the mean to have measurably higher taxes and/or fewer government services/investments.
  - shados 5y ago
    yes, though I'm not sure what it has to do with the original question. Someone is comparing 2 types of property in a given area. The city's tax burden is a constant between the two in that scenario, so the only variable will be how the tax burden is implemented by that city, which is usually property value with some abatements based on residency status and type of properties.