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That is not true. Property taxes are based on relative property values within a region such as a county or school district. Here in NY, appraisals are done at t

by lcvw 4y ago

That is not true. Property taxes are based on relative property values within a region such as a county or school district. Here in NY, appraisals are done at the county level and then that determines the amount you pay to the school district, town, county, etc. If budgets don’t increase, then your property tax stays the same even if your house is worth more. There are towns in my area with 1 million dollar houses that pay half the tax of a 500k house the next town over, because the town/school district tax gets spilt among the very valuable houses in that district. Whereas the poorer folks next door have to shoulder their tax burden among their less valuable homes.

eru 4y ago
Oh, that's weird. I assumed property tax was set at a fixed percentage of home value per year? Thanks for explaining! Though to be clear, most of what I explained still applies: if you are looking to buy real estate, the expected burden of property taxes will already be baked into the market price. Almost no matter how the taxes are set.
- lcvw 4y ago
  Yes it is true. Basically the formula for your taxes are (appraised home value / total appraised value of all houses in the town) * budget of the town. The market does absolutely take it in effect, like I said, towns with lower taxes sometimes become wealthy enclaves were people will drop 2 mil on a house and then have basically no taxes. My only issue with the system is it winds up being regressive sometimes because the wealthier an area is the lower the taxes tend to be.
  - eru 4y ago
    We seem to mostly agree. My observation is that the system is neither regressive nor progressive for people who don't already own a home. Renters basically don't see this tax at all, and people who are considering buying a home see the same total burden of tax plus mortgage payments. (Or for people who buy outright with spare cash instead of a mortgage, the constant burden is tax plus opportunity cost of capital. A mortgage is just a way to rent some capital from a bank in return for compensating them for the opportunity cost.)

by lcvw 4y ago

eru 4y ago

Oh, that's weird. I assumed property tax was set at a fixed percentage of home value per year? Thanks for explaining! Though to be clear, most of what I explained still applies: if you are looking to buy real estate, the expected burden of property taxes will already be baked into the market price. Almost no matter how the taxes are set.

lcvw 4y ago
Yes it is true. Basically the formula for your taxes are (appraised home value / total appraised value of all houses in the town) * budget of the town. The market does absolutely take it in effect, like I said, towns with lower taxes sometimes become wealthy enclaves were people will drop 2 mil on a house and then have basically no taxes. My only issue with the system is it winds up being regressive sometimes because the wealthier an area is the lower the taxes tend to be.
- eru 4y ago
  We seem to mostly agree. My observation is that the system is neither regressive nor progressive for people who don't already own a home. Renters basically don't see this tax at all, and people who are considering buying a home see the same total burden of tax plus mortgage payments. (Or for people who buy outright with spare cash instead of a mortgage, the constant burden is tax plus opportunity cost of capital. A mortgage is just a way to rent some capital from a bank in return for compensating them for the opportunity cost.)