5 ms·

Property taxes will skyrocket though

by vinyl7 3y ago

wredue 3y ago
Property taxes are built in to rents and then some. My property tax is considered “extremely high” at $4500 a year. Rent for $4500 a year is like a closet, even in a cheap place.
- pc86 3y ago
  Where is $4500/yr "extremely high?" We are basically middle-of-the-road for taxes in our area and it's over $11k/yr.
  - BizarreByte 3y ago
    I'm located in Nova Scotia and outside of the HRM 4500/year would be an absolute obscene tax rate in all except the biggest towns.
  - wredue 3y ago
    My properties taxable assessment value is only in the 250,000 range. So the property taxes are considered quite high. Property taxes aren’t a flat rate.
xeromal 3y ago
Depends on the state.
stetrain 3y ago
I pay $2500/mo to rent a house that was purchased for $280k in 2015 and is now worth about $550k. That's comparable rent to what I would pay for a decently desirable 2bd apartment. Property taxes county + city are about $4300 per year. They have increased recently, and so has the rent. If they owner put down a 10% down payment, I estimate their total monthly payment for mortgage + taxes + insurance is about $2000, and will likely remain in that ballpark. That means rent is currently paying the entire mortage/tax/ins plus $6k per year. At the end of their mortgage that monthly cost drops to about $700, and they will own an asset likely worth $500k+.
- dahfizz 3y ago
  That is my rule of thumb - Landlords make a profit by renting to you, otherwise they wouldn't do it. So renting is always going to be more expensive than owning in the long run.
  - stetrain 3y ago
    They would make a profit by renting below their monthly payment, because they are also gaining equity. Making a monthly profit and ending up with a paid off, appreciated house at the end is profiting doubly.
- dahwolf 3y ago
  I'm honestly shocked at how high property tax in the US is. I'm from the Netherlands, where property tax is based on the municipality. A 400K home where I live amounts to 423€ in yearly property tax. Rate increases over time are capped. And there's many ways to protest against the market value the taxation is based on. I suppose the basis for this relatively low taxation is that a huge amount of home owners here have a relatively valuable home (even the simplest of homes is expensive) whilst having a fairly moderate to low income. If property tax would be 10x as your example suggests, I'd suspect 75% would go bankrupt.
dahfizz 3y ago
And your landlord will pass that cost on to you.

Property taxes will skyrocket though

by vinyl7 3y ago

Property taxes will skyrocket though

Property taxes are built in to rents and then some. My property tax is considered “extremely high” at $4500 a year. Rent for $4500 a year is like a closet, even in a cheap place.

pc86 3y ago
Where is $4500/yr "extremely high?" We are basically middle-of-the-road for taxes in our area and it's over $11k/yr.
- BizarreByte 3y ago
  I'm located in Nova Scotia and outside of the HRM 4500/year would be an absolute obscene tax rate in all except the biggest towns.
- wredue 3y ago
  My properties taxable assessment value is only in the 250,000 range. So the property taxes are considered quite high. Property taxes aren’t a flat rate.

xeromal 3y ago

Depends on the state.

stetrain 3y ago

I pay $2500/mo to rent a house that was purchased for $280k in 2015 and is now worth about $550k. That's comparable rent to what I would pay for a decently desirable 2bd apartment. Property taxes county + city are about $4300 per year. They have increased recently, and so has the rent. If they owner put down a 10% down payment, I estimate their total monthly payment for mortgage + taxes + insurance is about $2000, and will likely remain in that ballpark. That means rent is currently paying the entire mortage/tax/ins plus $6k per year. At the end of their mortgage that monthly cost drops to about $700, and they will own an asset likely worth $500k+.

dahfizz 3y ago
That is my rule of thumb - Landlords make a profit by renting to you, otherwise they wouldn't do it. So renting is always going to be more expensive than owning in the long run.
- stetrain 3y ago
  They would make a profit by renting below their monthly payment, because they are also gaining equity. Making a monthly profit and ending up with a paid off, appreciated house at the end is profiting doubly.
dahwolf 3y ago
I'm honestly shocked at how high property tax in the US is. I'm from the Netherlands, where property tax is based on the municipality. A 400K home where I live amounts to 423€ in yearly property tax. Rate increases over time are capped. And there's many ways to protest against the market value the taxation is based on. I suppose the basis for this relatively low taxation is that a huge amount of home owners here have a relatively valuable home (even the simplest of homes is expensive) whilst having a fairly moderate to low income. If property tax would be 10x as your example suggests, I'd suspect 75% would go bankrupt.

dahfizz 3y ago

And your landlord will pass that cost on to you.