4 ms·

In most places geographically speaking no, but a number of US states including California and Florida which account for a disproportionate number of homes have

In most places geographically speaking no, but a number of US states including California and Florida which account for a disproportionate number of homes have passed laws protecting existing homeowners from property tax increases by capping the rate taxes can be raised to well below the rate of housing price inflation. So as a new buyer you're paying not only a higher price and higher interest rate, but also higher taxes than the people you bought it from.

silisili 2y ago
I actually like how FL handles this. They don't stop it from increasing, they just slow the rate of increase. I'd say it's not fair for someone who budgeted appropriately to get forced out of their home for something out of their control, like the historic explosion of house prices. In time it'll work itself out, assuming they stay long enough, as it still allows increases in a falling or stagnant market.
- kmonsen 2y ago
  That’s also what CA does
  - silisili 2y ago
    Interesting, seems CA is 2% and FL is 3%. Both should probably be pegged to the inflation rate nationally each year, which would probably bring them up a few ticks, but otherwise seems reasonable to me. For owner occupied of course, -not- landlords.
    - throw__away7391 2y ago
      > Both should probably be pegged to the inflation rate Yes I agree...but not the CPI, it should be tied specifically to housing prices. You could even have the state hire appraises to figure out the value of each specific property and peg the rate of increase to that for each property owner.
      - silisili 2y ago
        I know this comment is tongue in cheek, but I still disagree. When you purchase a house, you look at principal, taxes, PMI, and insurance before making a decision. If you're responsible, I guess. If your little city blows up, and your property value in the market is now 3x what it was, why should you be punished and even forced out if you can't afford the new taxes? New buyers do the same math, and decide they can afford it.. Yes they're paying more, but voluntarily on a likely overpriced asset. I'm not saying the original owners should just pay less and that's fair, screw the new buyers. I just think the increase should be capped realistically.
        throw__away7391 2y ago
        The fair way to handle this would be to reduce the tax rate across the board in response to housing inflation. Somehow. Governments around the world are more than happy to see housing prices rise, as are existing property owners, so I am not exactly holding my breath for this to happen.
  - DragonStrength 2y ago
    CA lets your kids inherit the tax treatment and allows corporations the same benefit. Once you do those things, it’s off in a whole other realm than normal homestead exemptions. The rapid run-up of home values in the US has led other states to follow, but they generally have higher caps on increases and limit the treatment to your primary residence.
- throw__away7391 2y ago
  I get the idea, but I do not like the outcome. It ends up being a largely regressive tax that hits people hardest and often at the worst possible time (e.g. just before or shortly after becoming a parent). Of course any program if you look only at the beneficiaries is going to look good. We have embraced this attitude that broadly favors the sustaining the already established in their current condition in perpetuity, regardless of the cost to anyone else.
bestnameever 2y ago
Higher property taxes generally would lead to lower home prices. But really, this applies with anything that you purchase. If the sales tax inceases, you may be taxed more for an identical item that was purchased prior to the sales tax increase. States and cities have a variety of ways to tax people. They don't need to rely on property tax.
- bryanrasmussen 2y ago
  >Higher property taxes generally would lead to lower home prices. this is not my experience - since property taxes are generally related to the desirability of the house and updated periodically (so often years after a price rise in area)
  - mitchdoogle 2y ago
    It's definitely influencing my home buying decision. In Philadelphia area, Delaware County property taxes are a significant amount higher than neighboring Montgomery county. I am looking in both, but my budget is about $30k higher in Montgomery county because of the taxes. I would venture a guess that similar houses in Montgomery county generally sell for more than their counterparts in Delaware county.
    - bryanrasmussen 2y ago
      the claim as I understand it is that the higher taxed houses will decrease in price in order to attract buyers, but property taxes are generally determined by prices, this would mean that house value should increase in Montgomery because lower taxes, and prices should decrease in Delaware because higher prices, and then in a few years the property taxes in Montgomery should increase and the taxes in Delaware should decrease. I of course am aware that property taxes change over time, but I don't think this kind of strongly observable see-sawing of the property taxes actually exists - so probably more data than just guessing would be useful.
- nijave 2y ago
  Iirc housing is pretty inelastic

silisili 2y ago

I actually like how FL handles this. They don't stop it from increasing, they just slow the rate of increase. I'd say it's not fair for someone who budgeted appropriately to get forced out of their home for something out of their control, like the historic explosion of house prices. In time it'll work itself out, assuming they stay long enough, as it still allows increases in a falling or stagnant market.

kmonsen 2y ago
That’s also what CA does
- silisili 2y ago
  Interesting, seems CA is 2% and FL is 3%. Both should probably be pegged to the inflation rate nationally each year, which would probably bring them up a few ticks, but otherwise seems reasonable to me. For owner occupied of course, -not- landlords.
  - throw__away7391 2y ago
    > Both should probably be pegged to the inflation rate Yes I agree...but not the CPI, it should be tied specifically to housing prices. You could even have the state hire appraises to figure out the value of each specific property and peg the rate of increase to that for each property owner.
    - silisili 2y ago
      I know this comment is tongue in cheek, but I still disagree. When you purchase a house, you look at principal, taxes, PMI, and insurance before making a decision. If you're responsible, I guess. If your little city blows up, and your property value in the market is now 3x what it was, why should you be punished and even forced out if you can't afford the new taxes? New buyers do the same math, and decide they can afford it.. Yes they're paying more, but voluntarily on a likely overpriced asset. I'm not saying the original owners should just pay less and that's fair, screw the new buyers. I just think the increase should be capped realistically.
      - throw__away7391 2y ago
        The fair way to handle this would be to reduce the tax rate across the board in response to housing inflation. Somehow. Governments around the world are more than happy to see housing prices rise, as are existing property owners, so I am not exactly holding my breath for this to happen.
- DragonStrength 2y ago
  CA lets your kids inherit the tax treatment and allows corporations the same benefit. Once you do those things, it’s off in a whole other realm than normal homestead exemptions. The rapid run-up of home values in the US has led other states to follow, but they generally have higher caps on increases and limit the treatment to your primary residence.
throw__away7391 2y ago
I get the idea, but I do not like the outcome. It ends up being a largely regressive tax that hits people hardest and often at the worst possible time (e.g. just before or shortly after becoming a parent). Of course any program if you look only at the beneficiaries is going to look good. We have embraced this attitude that broadly favors the sustaining the already established in their current condition in perpetuity, regardless of the cost to anyone else.

bestnameever 2y ago

Higher property taxes generally would lead to lower home prices. But really, this applies with anything that you purchase. If the sales tax inceases, you may be taxed more for an identical item that was purchased prior to the sales tax increase. States and cities have a variety of ways to tax people. They don't need to rely on property tax.

bryanrasmussen 2y ago
>Higher property taxes generally would lead to lower home prices. this is not my experience - since property taxes are generally related to the desirability of the house and updated periodically (so often years after a price rise in area)
- mitchdoogle 2y ago
  It's definitely influencing my home buying decision. In Philadelphia area, Delaware County property taxes are a significant amount higher than neighboring Montgomery county. I am looking in both, but my budget is about $30k higher in Montgomery county because of the taxes. I would venture a guess that similar houses in Montgomery county generally sell for more than their counterparts in Delaware county.
  - bryanrasmussen 2y ago
    the claim as I understand it is that the higher taxed houses will decrease in price in order to attract buyers, but property taxes are generally determined by prices, this would mean that house value should increase in Montgomery because lower taxes, and prices should decrease in Delaware because higher prices, and then in a few years the property taxes in Montgomery should increase and the taxes in Delaware should decrease. I of course am aware that property taxes change over time, but I don't think this kind of strongly observable see-sawing of the property taxes actually exists - so probably more data than just guessing would be useful.
nijave 2y ago
Iirc housing is pretty inelastic