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Property taxes won’t change if these values collapse. A city may reassess values in the future but that just means some people go up and some go down with the f

by quags 3y ago

Property taxes won’t change if these values collapse. A city may reassess values in the future but that just means some people go up and some go down with the final receipts the same. An owner may walk away from a Mortage and the bank will pay the taxes. If taxes are not paid you move into tax liens that trade and may be able to get the property just for the taxes on it. In the end property taxes get paid.

dantheman 3y ago
How do receipts stay the same?
- ddkto 3y ago
  Property taxes are usually set as a fixed amount to be collected, and the tax % is back calculated. In practice, this means that the only thing that matters is the value of a property relative to the rest of the city.
  - Scoundreller 3y ago
    Does the US use the same rates for all property types? At least in Canada (and in Sim City 2000…), the tax % is different for residential, commercial, industrial and often subcategorized further.
    - quags 3y ago
      In my state it varies by town so nothing that covers the entire US.
  - lisper 3y ago
    That may be what “usually” happens but in california, which is a major commercial real estate market, we have this thing called proposition 13 which screws up everything.
- quags 3y ago
  Taxes don’t change on the day to day swings of the properly value of the house. There is a set value and a set rate regardless of the worth of the house. Now it could be every 10 years a city needs to re-assess. So they go and value all the houses then they make a tax rate that gets to what the tax amount will be. So some go up and some go down based on the new value. There are some outliers - your taxes may change if you expand your house under a permit or so some upgrades. If you buy a house and believe its value is too high you can try to argue the total amount to lower the taxes. But nothing automatically is happening that is lowering anyone’s price except a total reassessment of the area. This is how gentrified areas may push people out with high taxes because a reassess changed the total tax amount and then your house may suddenly need to pay substantially more taxes * except in California as they have different laws.
  - deleted 3y ago
    [deleted]

by quags 3y ago

dantheman 3y ago

How do receipts stay the same?

ddkto 3y ago
Property taxes are usually set as a fixed amount to be collected, and the tax % is back calculated. In practice, this means that the only thing that matters is the value of a property relative to the rest of the city.
- Scoundreller 3y ago
  Does the US use the same rates for all property types? At least in Canada (and in Sim City 2000…), the tax % is different for residential, commercial, industrial and often subcategorized further.
  - quags 3y ago
    In my state it varies by town so nothing that covers the entire US.
- lisper 3y ago
  That may be what “usually” happens but in california, which is a major commercial real estate market, we have this thing called proposition 13 which screws up everything.
quags 3y ago
Taxes don’t change on the day to day swings of the properly value of the house. There is a set value and a set rate regardless of the worth of the house. Now it could be every 10 years a city needs to re-assess. So they go and value all the houses then they make a tax rate that gets to what the tax amount will be. So some go up and some go down based on the new value. There are some outliers - your taxes may change if you expand your house under a permit or so some upgrades. If you buy a house and believe its value is too high you can try to argue the total amount to lower the taxes. But nothing automatically is happening that is lowering anyone’s price except a total reassessment of the area. This is how gentrified areas may push people out with high taxes because a reassess changed the total tax amount and then your house may suddenly need to pay substantially more taxes * except in California as they have different laws.
- deleted 3y ago
  [deleted]