Yes Keith, those are the taxes. We're at $1.11 tax rate, but there's a hidden tax built into the assessment. Our house is assessed at 25% above its real current-market value (maybe more).
If someone knocked on my front door and offered to pay me the assessed valuation, I'd pass out cold. And when I woke up, I'd ask them how soon they wanted to take possession...
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THE Property Tax Thread (merged)
Re: property tax
by hope_full » Mon 25 Jan 2010, 22:10:31
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Re: property tax
by MarkJ » Tue 26 Jan 2010, 08:49:59
$this->bbcode_second_pass_quote('', '[')b]A Mercifully Brief Chapter on a Frightening, Tedious, But Important Subject
by James Howard Kunstler
Our system of property taxes punishes anyone who puts up a decent building made of durable materials. It rewards those who let existing buildings go to hell. It favors speculators who sit on vacant or underutilized land in the hearts of our cities and towns. In doing so it creates an artificial scarcity of land on the free market, which drives up the price of land in general, and encourages ever more scattered development, i.e., suburban sprawl.
This happens because we tax buildings much more heavily than the land under them. These buildings are visited by an official assessor who determines their value. The higher the buildings value, the higher the tax. Under this system, a rational person has every reason to put up crappy buildings that will not be highly assessed, or he has every reason to let his property run down, or build nothing at all. This is a major reason for the current desolation of American towns and cities.
by James Howard Kunstler
Our system of property taxes punishes anyone who puts up a decent building made of durable materials. It rewards those who let existing buildings go to hell. It favors speculators who sit on vacant or underutilized land in the hearts of our cities and towns. In doing so it creates an artificial scarcity of land on the free market, which drives up the price of land in general, and encourages ever more scattered development, i.e., suburban sprawl.
This happens because we tax buildings much more heavily than the land under them. These buildings are visited by an official assessor who determines their value. The higher the buildings value, the higher the tax. Under this system, a rational person has every reason to put up crappy buildings that will not be highly assessed, or he has every reason to let his property run down, or build nothing at all. This is a major reason for the current desolation of American towns and cities.
This is why I prefer mobile homes as single unit rentals on some of my properties. Mobile homes depreciate in value, devalue surrounding properties, discourage purchase of surrounding properties, discourage new construction and renovation of surrounding properties, plus don't add much to the property tax bill.
On one of my properties (40 acres), the lowest rent ($400 per month) from 1 of 5 mobile homes on the property pays the property taxes ($2,650) in 7 months. On the other side of the road, my neighbors with a modest 1,400 sq/ft home on 3/4 acre pay $2,300 per year in property taxes since the assessments are primarily based on the value of the structure(s), not the land.
Our current property tax system also rewards those of us that own multi-family homes and apartment buildings since the tax burden is divided by units per structure, the taxes are paid with other people's money and/or the taxes are paid indirectly through subsidized rents.
For example: One six family home may have 15 plus tenants using city, town, village, county, school, government and state services, but the owner of the six family home often pays substantially lower property taxes than the single occupant of a comparably sized single family home.
As mentioned, since property taxes on run-down properties, vacant building lots and vacant acreage are relatively low, it allows investors, developers and landlords to buy and hold these properties, thus creating a shortage of land, housing, apartments and keeping prices artificially high.
Land taxes are cheap enough that investors can sit on the suburban and semi-rural properties until the next residential or commercial construction surge. As they bring municipal water/sewer and natural gas to these regions, the value of vacant acreage, under-developed acreage and farmland skyrockets since it allows commercial development and subdivision.
I own well over a dozen vacant city lots, but high assessments on new construction, high city tax rates and/or limited space prevent me from building on them. I lease some of them for off-street parking to help pay taxes. Eventually I'll sell them off to neighboring properties for parking, garages, expansion, or to commercial businesses, but their value as "residential new construction" building lots is effectively zero.
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Re: property tax
by Keith_McClary » Wed 27 Jan 2010, 00:40:41
$this->bbcode_second_pass_quote('MarkJ', '
')This is why I prefer mobile homes as single unit rentals on some of my properties. Mobile homes depreciate in value, devalue surrounding properties, discourage purchase of surrounding properties, discourage new construction and renovation of surrounding properties, plus don't add much to the property tax bill.
...
Land taxes are cheap enough that investors can sit on the suburban and semi-rural properties until the next residential or commercial construction surge. As they bring municipal water/sewer and natural gas to these regions, the value of vacant acreage, under-developed acreage and farmland skyrockets since it allows commercial development and subdivision.
')This is why I prefer mobile homes as single unit rentals on some of my properties. Mobile homes depreciate in value, devalue surrounding properties, discourage purchase of surrounding properties, discourage new construction and renovation of surrounding properties, plus don't add much to the property tax bill.
...
Land taxes are cheap enough that investors can sit on the suburban and semi-rural properties until the next residential or commercial construction surge. As they bring municipal water/sewer and natural gas to these regions, the value of vacant acreage, under-developed acreage and farmland skyrockets since it allows commercial development and subdivision.
Meanwhile on another planet:$this->bbcode_second_pass_quote('', '
')Vancouver has world's least affordable housing: report
Vancouver had the world's least affordable housing market last year, according to a report that puts the blame on urban land-use policies designed to prevent sprawl.
...
Not everyone agrees with the report.
Brent Gilmour, acting CEO of the Canadian Urban Institute, said the report oversimplifies other factors that affect housing affordability, such as regional real estate markets and economic conditions.
The report also fails to include the financial, social and environmental benefits of "smart" urban planning. They include lower infrastructure costs, reducing the need for long commutes and cities designed for people who don't or can't drive cars, he said.
"You have to look at the quality of life in a neighbourhood. The ability to walk, to bicycle. Are there parks and recreational facilities that are nearby?" Gilmour said from Toronto. "This study doesn't take into consideration any of those things."
Gilmour said major Canadian cities look at the return on investment when planning new residential areas. Conventional planning based on large subdivision blocks that require more roads, more sewers and more lighting have long-term costs that may not be reflected in the price of a house.
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Re: property tax
by Tyler_JC » Wed 27 Jan 2010, 03:14:16
I think we're going to see a lot more single family homes being occupied by more than one family.
The idea that every single person needs a thousand square feet of living space, their own bedroom, their own bathroom(!), their own parking space in the garage and plenty of walk-in closets is crazy.
Look at the original Levitt town. That was a typical middle class neighborhood in the 50s. Compare that to the homes of today.
Property tax rates in exurban communities are going to rise as towns attempt to grab more revenue from the ever shrinking number of households. Those that used to be able to get by without boarders will eventually be forced to rent out that extra bedroom.
The idea that every single person needs a thousand square feet of living space, their own bedroom, their own bathroom(!), their own parking space in the garage and plenty of walk-in closets is crazy.
Look at the original Levitt town. That was a typical middle class neighborhood in the 50s. Compare that to the homes of today.
Property tax rates in exurban communities are going to rise as towns attempt to grab more revenue from the ever shrinking number of households. Those that used to be able to get by without boarders will eventually be forced to rent out that extra bedroom.
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Re: property tax
by MarkJ » Wed 27 Jan 2010, 04:39:26
We see multiple families living in small singlewide trailers and small apartments.
Landlords and property managers have to keep a watchful eye on their single family rentals, multi-family rentals, apartment buildings, mobile home parks and water bills since so many friends, family, co-workers, or room-mates try to move in without permission.
The reason we have so many multi-family homes in some urban regions is that hard times decades ago forced families to share homes, rent out apartments and rent out rooms.
The older 2 story homes were quite large, so many were originally converted to 2 family flats, then converted to 4/5/6 unit multi-family homes for additional incomes. Yards, garages, porches, trees, sheds and other structures were removed to make off-street parking spots for additional tenants.
Many of the newer homes make good candidates for rentals since they're large, have multiple bathrooms, zoned heating, deep finished basements and tons of parking, garage space, storage, room for expansion etc.
It's pretty common to see 3 generations living under the same roof these days due to unemployment, under-employment, foreclosure, eviction, plus housing, rent and property tax inflation.
Landlords and property managers have to keep a watchful eye on their single family rentals, multi-family rentals, apartment buildings, mobile home parks and water bills since so many friends, family, co-workers, or room-mates try to move in without permission.
The reason we have so many multi-family homes in some urban regions is that hard times decades ago forced families to share homes, rent out apartments and rent out rooms.
The older 2 story homes were quite large, so many were originally converted to 2 family flats, then converted to 4/5/6 unit multi-family homes for additional incomes. Yards, garages, porches, trees, sheds and other structures were removed to make off-street parking spots for additional tenants.
Many of the newer homes make good candidates for rentals since they're large, have multiple bathrooms, zoned heating, deep finished basements and tons of parking, garage space, storage, room for expansion etc.
It's pretty common to see 3 generations living under the same roof these days due to unemployment, under-employment, foreclosure, eviction, plus housing, rent and property tax inflation.
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Re: property tax
by MarkJ » Wed 27 Jan 2010, 07:06:23
Here's another way locals have reduced their property tax liability.
$this->bbcode_second_pass_quote('', '[')b]Condos Enjoy Break On Taxes
SARATOGA SPRINGS — Commissioner of Accounts John Franck is urging his colleagues on the City Council to back state legislation that would change the way condominiums are assessed. The move would raise property taxes for people buying new condos and garner more revenue for the city.
During a presentation at this week’s City Council meeting, Franck explained that because of an article in New York’s Real Property Law known as the Condominium Act of 1964, buildings with condominium-style ownership are assessed on their potential to earn rent, and not on their sale price, as single-occupancy homes are assessed.
Franck cited two examples from 2008. One, a 3,685-square-foot condo that sold for more than $1.3 million, is assessed at $453,255 — less than one-third the unit’s sale price. By contrast, a 3,651-square-foot single-family home for $575,600 is assessed at $485,200.
"The result is less money for the city," Franck said. "The inequities are too grand to ignore."
The reason for the discrepancy is that condominium buildings are assessed as a whole building, and assessments do not consider common spaces or amenities within each unit.
Local Realtor Scott Varley said condominium sales accounted for about one-third of his business in 2008 and lower property taxes on condominiums are a major selling point for the units.
"I immediately tell them about the lower taxes," Varley said. "When you have that large of a reduction in taxes, it allows people to buy a larger condo. They have more to put toward a mortgage, and that’s why you’re seeing higher prices on the condos.
http://www.saratogian.com/articles/2009 ... 974979.txt
$this->bbcode_second_pass_quote('', '[')b]Condos Enjoy Break On Taxes
SARATOGA SPRINGS — Commissioner of Accounts John Franck is urging his colleagues on the City Council to back state legislation that would change the way condominiums are assessed. The move would raise property taxes for people buying new condos and garner more revenue for the city.
During a presentation at this week’s City Council meeting, Franck explained that because of an article in New York’s Real Property Law known as the Condominium Act of 1964, buildings with condominium-style ownership are assessed on their potential to earn rent, and not on their sale price, as single-occupancy homes are assessed.
Franck cited two examples from 2008. One, a 3,685-square-foot condo that sold for more than $1.3 million, is assessed at $453,255 — less than one-third the unit’s sale price. By contrast, a 3,651-square-foot single-family home for $575,600 is assessed at $485,200.
"The result is less money for the city," Franck said. "The inequities are too grand to ignore."
The reason for the discrepancy is that condominium buildings are assessed as a whole building, and assessments do not consider common spaces or amenities within each unit.
Local Realtor Scott Varley said condominium sales accounted for about one-third of his business in 2008 and lower property taxes on condominiums are a major selling point for the units.
"I immediately tell them about the lower taxes," Varley said. "When you have that large of a reduction in taxes, it allows people to buy a larger condo. They have more to put toward a mortgage, and that’s why you’re seeing higher prices on the condos.
http://www.saratogian.com/articles/2009 ... 974979.txt
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