6 ms·

I live in Texas. People move here and are flabbergasted by our property taxes.

by hectdev 7mo ago

HardCodedBias 7mo ago
AI says: TX: Average Effective Rate: Approximately 1.36% to 1.6% (some estimates range up to 1.8%) of a property's assessed fair market value. The typical homeowner in Texas pays a median annual property tax of $4,108 WA: Effective Rate: The average effective property tax rate in Washington is approximately 0.75% to 0.79% of the home's value. State mean the median annual property tax payment is roughly $4,361 to $4,729
- hectdev 7mo ago
  Take this into account. People move from places with high cost of living where their 2 bedroom house nets them easily $1mil. They sell that and move to Austin where they can afford a much bigger house. They think they win not paying income tax and then their property tax bill drops and they are paying $16k per year. Enter the flabbergast.
  - pclmulqdq 7mo ago
    $16k per year in total taxes is very cheap for someone with a $1 million house and the income to support it.
    - hectdev 7mo ago
      It's more nuanced than that. Say someone moves from California where their property taxes were based on the purchase price of the home, they then buy a home in Austin where it based on the property value and they size up. It is a sticker shock of the taxes. Not justifying it, it is just a reality of what happens here.
    - tzs 7mo ago
      If the house is paid off it can be a lot cheaper to support it than you probably expect. For example my house is paid off. My total yearly spending comes out to under $25k/year. That omits irregular things like the occasional need to replace a broken appliance, or upgrade to a new computer/phone/tablet/watch, or get a new car. Looking at how often those irregular things happen and how much they cost, another $7k a year reserved for that would be sufficient, assuming in any years where that is not spent the left over is carried forward. That's $32k/year income needed to live comfortably in my house. My house is worth a little less than half a million according to Zillow. I'd guess a million dollar house would cost about twice as much to insure, and is bigger so costs more to heat or cool. Assuming 2x insurance and 2x electricity costs would add another $3k, suggesting $35k/year income needed for a million dollar house, at least if my standard of living is acceptable.
adam_arthur 7mo ago
The current governor is proposing cutting property taxes in ~half by eliminating the school district portion and instead funding schools directly via the state's budget surplus. Remains to be seen, as the next legislative session isn't until 2027.
- salawat 7mo ago
  I mean, most property developers are playing shell games to avoid the requirement of having to build school districts anyway in Texas from my experience living there. Build small developments up to just short of the line where it's required, then continue development as a different legal fiction with what turns out to be ultimately the same beneficent owners. Texas education system leaves much to be desired.
  - adam_arthur 7mo ago
    I'm not familiar with that specific example, but I do know that independent players in any economic system will follow the incentives. Expecting companies, people etc to do the "right thing" when it's financially disincentivized usually doesn't work out. Same will happen in regards to all these new taxes reinforcing existing population migration trends.
    - salawat 7mo ago
      The system is simple. Your development hits a certain size, you have to build and fund a school for the community through fees if you're renting. So they go just short of the line, and crap out two developments and no schools, and leave the populace to figure out the rest. That isn't following incentives. That's being an asshat.
      - adam_arthur 7mo ago
        No, it's bad policy. Cliffs in policies will always lead to players working around the cliffs. E.g. in NYC there is an additional 1% sales tax on home sales above 1 million dollars. So nobody in the market would ever sell a home between 1m and 1.01m as the tax increase is greater than the sales price. These are failed policy implementations (in the above example the tax should be marginal, not thresholded) Any policy which does not account for individual actors optimizing financially is a badly designed policy. There are numerous similar examples re: CRE when requiring subsidized housing units for certain sizes of development. Often it's more lucrative to build smaller and get around subsidized unit requirements. You can call them "asshats", but I'd rather live and discuss policy in reality. Many of these new, clearly strictly punitively intended, taxes aimed at the wealthy will have the same logical outcome. Show me the incentive and I'll show you the result
reliabilityguy 7mo ago
NJ, in areas with good schools, has higher property taxes.
- pc86 7mo ago
  And I'm sure we can find places with higher property taxes than those New Jersey examples.
  - evanelias 7mo ago
    I don't understand your point or why you are sure of that? New Jersey consistently ranks as having the highest average property tax rate of any state, and it also has relatively high income tax rates. This is mainly caused by having a ridiculous number of tiny towns and tiny school districts, each with redundant services and employees.
    - RhysU 7mo ago
      Redundant may be a strong word. NJ ranks at the top of the states for public schools, e.g. https://www.usnews.com/news/best-states/rankings/education https://www.usnews.com/news/best-states/rankings/education NJ has effectively a publicly operated system of private schools where the tuition is the tax burden.
      - evanelias 7mo ago
        My small NJ town has its own school district, containing a single K-8 school. Yet it has both a superintendent and a principal. Grades 9-12 feed into a regional high school, which also has its own school district containing just that school. It also has its own superintendent and principal. I don't think "redundant" is a strong word for this situation.
        RhysU 7mo ago
        How many employees at each of those schools? How much management? Is the manager / employee ratio lower or higher than where you work?
pclmulqdq 7mo ago
Tax rates under 2% of property value should not "flabbergast" anyone. I prefer a state having a high property tax rate and cheap housing over an income tax. I'm sure most Texans do, too.
- hectdev 7mo ago
  They tend to size up when moving here and are expecting the rates from back home. Not saying it's a logical thing but what tends to happen. This is more of a comment on how people aren't really taking everything into account when just moving because "no income tax".
- pc86 7mo ago
  How about a high property tax rate and expensive housing? Because that's what you'll get in all the desirable areas of Texas.
- dragonwriter 7mo ago
  > Tax rates under 2% of property value should not "flabbergast" anyone The national average effective property tax rate is, IIRC, below 1.5% for all property and below 1% for owner-occupied homes. It is really not surprising that people coming to Texas under the popular illusion that it is a tax refuge whose property tax expectations are set by the places they are coming from are flabbergasted by Texas’ property taxes.

I live in Texas. People move here and are flabbergasted by our property taxes.

by hectdev 7mo ago

I live in Texas. People move here and are flabbergasted by our property taxes.

AI says: TX: Average Effective Rate: Approximately 1.36% to 1.6% (some estimates range up to 1.8%) of a property's assessed fair market value. The typical homeowner in Texas pays a median annual property tax of $4,108 WA: Effective Rate: The average effective property tax rate in Washington is approximately 0.75% to 0.79% of the home's value. State mean the median annual property tax payment is roughly $4,361 to $4,729

hectdev 7mo ago
Take this into account. People move from places with high cost of living where their 2 bedroom house nets them easily $1mil. They sell that and move to Austin where they can afford a much bigger house. They think they win not paying income tax and then their property tax bill drops and they are paying $16k per year. Enter the flabbergast.
- pclmulqdq 7mo ago
  $16k per year in total taxes is very cheap for someone with a $1 million house and the income to support it.
  - hectdev 7mo ago
    It's more nuanced than that. Say someone moves from California where their property taxes were based on the purchase price of the home, they then buy a home in Austin where it based on the property value and they size up. It is a sticker shock of the taxes. Not justifying it, it is just a reality of what happens here.
  - tzs 7mo ago
    If the house is paid off it can be a lot cheaper to support it than you probably expect. For example my house is paid off. My total yearly spending comes out to under $25k/year. That omits irregular things like the occasional need to replace a broken appliance, or upgrade to a new computer/phone/tablet/watch, or get a new car. Looking at how often those irregular things happen and how much they cost, another $7k a year reserved for that would be sufficient, assuming in any years where that is not spent the left over is carried forward. That's $32k/year income needed to live comfortably in my house. My house is worth a little less than half a million according to Zillow. I'd guess a million dollar house would cost about twice as much to insure, and is bigger so costs more to heat or cool. Assuming 2x insurance and 2x electricity costs would add another $3k, suggesting $35k/year income needed for a million dollar house, at least if my standard of living is acceptable.

adam_arthur 7mo ago

The current governor is proposing cutting property taxes in ~half by eliminating the school district portion and instead funding schools directly via the state's budget surplus. Remains to be seen, as the next legislative session isn't until 2027.

salawat 7mo ago
I mean, most property developers are playing shell games to avoid the requirement of having to build school districts anyway in Texas from my experience living there. Build small developments up to just short of the line where it's required, then continue development as a different legal fiction with what turns out to be ultimately the same beneficent owners. Texas education system leaves much to be desired.
- adam_arthur 7mo ago
  I'm not familiar with that specific example, but I do know that independent players in any economic system will follow the incentives. Expecting companies, people etc to do the "right thing" when it's financially disincentivized usually doesn't work out. Same will happen in regards to all these new taxes reinforcing existing population migration trends.
  - salawat 7mo ago
    The system is simple. Your development hits a certain size, you have to build and fund a school for the community through fees if you're renting. So they go just short of the line, and crap out two developments and no schools, and leave the populace to figure out the rest. That isn't following incentives. That's being an asshat.
    - adam_arthur 7mo ago
      No, it's bad policy. Cliffs in policies will always lead to players working around the cliffs. E.g. in NYC there is an additional 1% sales tax on home sales above 1 million dollars. So nobody in the market would ever sell a home between 1m and 1.01m as the tax increase is greater than the sales price. These are failed policy implementations (in the above example the tax should be marginal, not thresholded) Any policy which does not account for individual actors optimizing financially is a badly designed policy. There are numerous similar examples re: CRE when requiring subsidized housing units for certain sizes of development. Often it's more lucrative to build smaller and get around subsidized unit requirements. You can call them "asshats", but I'd rather live and discuss policy in reality. Many of these new, clearly strictly punitively intended, taxes aimed at the wealthy will have the same logical outcome. Show me the incentive and I'll show you the result

reliabilityguy 7mo ago

NJ, in areas with good schools, has higher property taxes.

pc86 7mo ago
And I'm sure we can find places with higher property taxes than those New Jersey examples.
- evanelias 7mo ago
  I don't understand your point or why you are sure of that? New Jersey consistently ranks as having the highest average property tax rate of any state, and it also has relatively high income tax rates. This is mainly caused by having a ridiculous number of tiny towns and tiny school districts, each with redundant services and employees.
  - RhysU 7mo ago
    Redundant may be a strong word. NJ ranks at the top of the states for public schools, e.g. https://www.usnews.com/news/best-states/rankings/education https://www.usnews.com/news/best-states/rankings/education NJ has effectively a publicly operated system of private schools where the tuition is the tax burden.
    - evanelias 7mo ago
      My small NJ town has its own school district, containing a single K-8 school. Yet it has both a superintendent and a principal. Grades 9-12 feed into a regional high school, which also has its own school district containing just that school. It also has its own superintendent and principal. I don't think "redundant" is a strong word for this situation.
      - RhysU 7mo ago
        How many employees at each of those schools? How much management? Is the manager / employee ratio lower or higher than where you work?

pclmulqdq 7mo ago

Tax rates under 2% of property value should not "flabbergast" anyone. I prefer a state having a high property tax rate and cheap housing over an income tax. I'm sure most Texans do, too.

hectdev 7mo ago
They tend to size up when moving here and are expecting the rates from back home. Not saying it's a logical thing but what tends to happen. This is more of a comment on how people aren't really taking everything into account when just moving because "no income tax".
pc86 7mo ago
How about a high property tax rate and expensive housing? Because that's what you'll get in all the desirable areas of Texas.
dragonwriter 7mo ago
> Tax rates under 2% of property value should not "flabbergast" anyone The national average effective property tax rate is, IIRC, below 1.5% for all property and below 1% for owner-occupied homes. It is really not surprising that people coming to Texas under the popular illusion that it is a tax refuge whose property tax expectations are set by the places they are coming from are flabbergasted by Texas’ property taxes.