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Some say TX prices are depressed due to high property taxes since it represents a significant component of household TCO. Comparing Seattle to Austin, the prope

by adolph 5y ago

Some say TX prices are depressed due to high property taxes since it represents a significant component of household TCO. Comparing Seattle to Austin, the property value is 43% greater but the ongoing tax burden is 8:11, 27% less. Seattle: 0.930% of Assessed Home Value SF: 0.640% of Assessed Home Value Dallas: 1.930% of Assessed Home Value Austin: 1.820% of Assessed Home Value Houston: 2.030% of Assessed Home Value Source: https://smartasset.com/taxes/property-taxes https://smartasset.com/taxes/property-taxes

tfandango 5y ago
Not sure if this is included in the assessment, but TX does not have a state tax.
- devilbunny 5y ago
  Yes, the complete absence of state income taxes makes an enormous difference. Texas property taxes sound crazy until you take that into account. Putting taxes on sales and property means that even those paid under the table can't escape taxation.
  - adolph 5y ago
    In the absence of an income tax and presence of similar overall government spending then increased rates of other revenue sources are a first order effect. How this shapes the valuation of other things, like houses, is an interesting second order effect. Property tax rates shape how affordable housing is during the mortgage period and after.
- ian-g 5y ago
  Specifically Austin vs Seattle, that's a non-factor. No state income tax in WA either
tedd4u 5y ago
That SF number isn't accurate. The 2021-2022 rate is 85% higher (1.18248499%). [1] Another important thing about property taxes is to know when an updated assessed value is triggered and if there are any limits on how it changes. For example in SF, the assessed value is basically set to the sale price, immediately. But then the assessed value doesn't change until there's another property sale (or permitted improvements are made). In some states assessed values are updated every year regardless of sales or improvements. [2] [1] https://sftreasurer.org/property/secured-property-taxes https://sftreasurer.org/property/secured-property-taxes [2] https://taxfoundation.org/state-provisions-property-reassessment https://taxfoundation.org/state-provisions-property-reassess...
- adolph 5y ago
  Yeah, my locality changes the rate annually to make their revenue numbers and reassess regularly although not aggressively and never downward.

by adolph 5y ago

tfandango 5y ago

Not sure if this is included in the assessment, but TX does not have a state tax.

devilbunny 5y ago
Yes, the complete absence of state income taxes makes an enormous difference. Texas property taxes sound crazy until you take that into account. Putting taxes on sales and property means that even those paid under the table can't escape taxation.
- adolph 5y ago
  In the absence of an income tax and presence of similar overall government spending then increased rates of other revenue sources are a first order effect. How this shapes the valuation of other things, like houses, is an interesting second order effect. Property tax rates shape how affordable housing is during the mortgage period and after.
ian-g 5y ago
Specifically Austin vs Seattle, that's a non-factor. No state income tax in WA either

tedd4u 5y ago

That SF number isn't accurate. The 2021-2022 rate is 85% higher (1.18248499%). [1] Another important thing about property taxes is to know when an updated assessed value is triggered and if there are any limits on how it changes. For example in SF, the assessed value is basically set to the sale price, immediately. But then the assessed value doesn't change until there's another property sale (or permitted improvements are made). In some states assessed values are updated every year regardless of sales or improvements. [2] [1] https://sftreasurer.org/property/secured-property-taxes https://sftreasurer.org/property/secured-property-taxes [2] https://taxfoundation.org/state-provisions-property-reassessment https://taxfoundation.org/state-provisions-property-reassess...

adolph 5y ago
Yeah, my locality changes the rate annually to make their revenue numbers and reassess regularly although not aggressively and never downward.