5 ms·

That sounds like some great tax policies in favor of long term home owners. I was surprised that taxes ended up being over 50% of the total cost of home owners

by cj 3y ago

That sounds like some great tax policies in favor of long term home owners. I was surprised that taxes ended up being over 50% of the total cost of home ownership, at least in New York (not NYC). Bought my first house in 2021. My mortgage payment is less than my annual school + property taxes. It’s quite insane. A big problem is my town’s property assessments arent done fairly. Anyone who hasn’t bought or sold their house in the last 10 years are enjoying extremely low assessments (e.g. a house down the street sold for $800k while the assessment was $270k). The tax assessor seems to wait until a specific house is sold before adjusting the assessed value. Meaning grandma’s $2 million dollar house is still paying taxes based on the value of the house 30 years ago.

Ajay-p 3y ago
In California, if you make improvements to your home you are forced into a reassessment and higher taxes. Many homes in California are not maintained and updated for this very reason, since the taxes are set from when the home was purchased. https://www.sccassessor.org/faq/understanding-proposition-13 https://www.sccassessor.org/faq/understanding-proposition-13
- PopAlongKid 3y ago
  You have mis-stated the situation. It is absolutely not true that "Many homes in California are not maintained and updated for this very reason [reassessment]". Only the cost of the improvement, such as an addition to the building, is added to the existing assessed value. The entire property is not reassessed. And if the update is just a remodel (such as new flooring and tile in your bathroom, or new cabinets/countertops in your kitchen), there is no reassessement. Example: a house was purchased 30 years ago for $200K, so that is the base year value (goes up 2% per year per Prop 13). If you build an additional bedroom onto the house for $50K, then only $50K is added to your assessed value.
  - compiler-guy 3y ago
    And maintenance itself is never a cause for reassessment. New roof? No reassessment. New windows? No reassessment.
sokoloff 3y ago
Just the property taxes were about 30% of the rent I paid at the place I rented before buying our house. Property taxes are paying for local services; renters are paying them as well, but the landlord handles the money in between.
johngladtj 3y ago
That's why Germany has some of the highest homeownership rates in the world! Oh wait... Turns out encouraging illiquidity, high entry costs, and limiting people's options when it comes to selling without paying extortionate amounts of taxes doesn't actually do that.
- thiago_fm 3y ago
  That is cultural; Germans are risk-averse, and buying a property is a huge risk. Americans are the ones that take home buying as low risk when divorce rates are really high and there's a huge "forced seller" probability on every new home bought.

by cj 3y ago

Ajay-p 3y ago

In California, if you make improvements to your home you are forced into a reassessment and higher taxes. Many homes in California are not maintained and updated for this very reason, since the taxes are set from when the home was purchased. https://www.sccassessor.org/faq/understanding-proposition-13 https://www.sccassessor.org/faq/understanding-proposition-13

PopAlongKid 3y ago
You have mis-stated the situation. It is absolutely not true that "Many homes in California are not maintained and updated for this very reason [reassessment]". Only the cost of the improvement, such as an addition to the building, is added to the existing assessed value. The entire property is not reassessed. And if the update is just a remodel (such as new flooring and tile in your bathroom, or new cabinets/countertops in your kitchen), there is no reassessement. Example: a house was purchased 30 years ago for $200K, so that is the base year value (goes up 2% per year per Prop 13). If you build an additional bedroom onto the house for $50K, then only $50K is added to your assessed value.
- compiler-guy 3y ago
  And maintenance itself is never a cause for reassessment. New roof? No reassessment. New windows? No reassessment.

sokoloff 3y ago

Just the property taxes were about 30% of the rent I paid at the place I rented before buying our house. Property taxes are paying for local services; renters are paying them as well, but the landlord handles the money in between.

johngladtj 3y ago

That's why Germany has some of the highest homeownership rates in the world! Oh wait... Turns out encouraging illiquidity, high entry costs, and limiting people's options when it comes to selling without paying extortionate amounts of taxes doesn't actually do that.

thiago_fm 3y ago
That is cultural; Germans are risk-averse, and buying a property is a huge risk. Americans are the ones that take home buying as low risk when divorce rates are really high and there's a huge "forced seller" probability on every new home bought.