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Thread: Would you trade price appreciation for a chunk of your down payment?

  1. #31
    All Worship Ragnarök Loki's Avatar
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    To pay $11,000 a year in property taxes in PA, you'd have to own a house worth $750,000 in a median PA town...

    https://taxfoundation.org/how-high-a...es-your-state/
    Hope is the denial of reality

  2. #32
    Senior Member RandBlade's Avatar
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    Quote Originally Posted by GGT View Post
    Yes, but the really burdensome taxes happen at the state and local level. Especially when property taxes fund local public schools, fire and police departments, and infrastructure.

    Not sure if I've posted this before, but my sister in IN pays less than $900/yr in property taxes for a 2,000 sf home on 13 acres of land. My home in PA was 3,000 sf on one acre, and my property taxes were $11,000/yr. Just an example of the differences between states, and why PA is considered a high tax state (compared to IN) but people live in PA and commute across state lines to work in NJ or MD, where those property taxes are even higher.
    But those are the responsibility of your State and local governments.

    I can't begin to comprehend why you think the Federal Congress should be getting itself involved with local taxes.
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  3. #33
    Senior Member GGT's Avatar
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    Quote Originally Posted by RandBlade View Post
    But those are the responsibility of your State and local governments.

    I can't begin to comprehend why you think the Federal Congress should be getting itself involved with local taxes.
    Simply put, some states don't tax enough, and then rely on national funds to fill the gap. That's why some low-tax states are actually big users of federal dollars for things like disaster relief. Texas, for example.

  4. #34
    Quote Originally Posted by GGT View Post
    Simply put, some states don't tax enough, and then rely on national funds to fill the gap. That's why some low-tax states are actually big users of federal dollars for things like disaster relief. Texas, for example.
    I really don't think this is true.
    "When I meet God, I am going to ask him two questions: Why relativity? And why turbulence? I really believe he will have an answer for the first." - Werner Heisenberg (maybe)

  5. #35
    Senior Member GGT's Avatar
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    You don't think states are designated net-contributors or net-users of federal tax dollars? Pretty sure we went over this in another thread some time ago, most likely after a disaster.

  6. #36
    Senior Member GGT's Avatar
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    Reset: the answer mostly depends on your age, and education. If you're under 35-40 yrs old, with a 'profession' in the STEM fields, a scheme like this might be more attractive than conventional mortgages. Especially in high-cost RE markets, where transitions in income/wealth can be pretty difficult to maneuver.

    It's a risk, but taking risks before 40 is a good niche group to be in, historically. It might even create much-needed competition in the mortgage industry, without the disastrous results of the sub-prime crisis?

  7. #37
    Senior Member GGT's Avatar
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    Quote Originally Posted by Loki View Post
    To pay $11,000 a year in property taxes in PA, you'd have to own a house worth $750,000 in a median PA town...

    https://taxfoundation.org/how-high-a...es-your-state/
    Sorry, I didn't see your post until after my computer made some updates. And sorry again, but I did indeed pay $11,000/yr in property taxes (7k for the school district alone, which doubled since I bought the place in 2002) for a home that was assessed at $370,000 and sold for $333,000.

    There's no such thing as a "median" PA town when all RE is local. Some PA counties/municipalities haven't done comprehensive tax re-assessments for several decades. Even tho a property could be sold multiple times, or have major upgrades, and increase in market value, the taxation didn't. The mil rate algorithms are specific to each municipality, and mine went to a 100% market valuation (with a paltry Homestead exemption for owner/occupiers).

    When rural areas got swept up in suburban sprawl, and schools budgets went bust, some town managers voted to do re-assessments and change the calculus. People who'd been paying 1960 tax rates in the 21st century balked at the rate hike. It's a big honking controversial issue in the state. Look it up if you don't believe me

    edit: and here's the kicker. The guy that bought my house for 333 will still be paying taxes based on the 370 assessment. He might get a small tax deduction as a senior citizen, but that won't change what the the municipality taxes: location, acreage, finished square footage, basements, toilets, fireplaces. He'd be a fool to add a swimming pool, a fish pond, another driveway, or any outbuilding (even a tool shed) since those are taxable improvements.
    Last edited by GGT; 02-07-2018 at 09:51 AM.

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