Is it still worth buying a house in a state with insane property taxes

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sschoe2
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Is it still worth buying a house in a state with insane property taxes

Postby sschoe2 » Mon Jul 17, 2017 11:17 am

The title kind of says it all. I currently rent from family in Illinois who I help take care of. The taxes here seem so out of control and insane that it seems to me as not to be worth it to purchase a home here. Taxes on even a modest home can be $10k per year in addition to mortgage interest, maintenance, insurance, and other associated fees as well as the possibility that the taxes result in poor growth of value of the house and the local economy.

I rather just get an apartment possibly with a room mate to lesson the tax burden and yes I've seriously thought about leaving the state but finding a comparable job is not likely for myself. What is everyone else's take?

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flamesabers
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Re: Is it still worth buying a house in a state with insane property taxes

Postby flamesabers » Mon Jul 17, 2017 11:30 am

Unless you have a high income and can easily handle $10k in property taxes, I don't think it's a good idea to buy a house in your area. Do you know how much rent will be in your area? When property taxes are extraordinary high, I'm sure rent will be affected as well.

While you may decide to stay in Illinois for your job, are you thinking about leaving once you retire?

CppCoder
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Re: Is it still worth buying a house in a state with insane property taxes

Postby CppCoder » Mon Jul 17, 2017 11:34 am

It's not like landlords are providing a charity and paying property taxes for you out of the goodness of their hearts. You are paying property taxes whether you rent or own. When you own the house, at least you get a line item bill that you can take as a tax deduction.

fposte
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Re: Is it still worth buying a house in a state with insane property taxes

Postby fposte » Mon Jul 17, 2017 11:36 am

Property taxes aren't just by state, though; I live in Illinois and pay less than half of that. I suspect you're looking at Chicago city and burbs there.

Edit: sorry, of course there's a base state rate, but the in-state fluctuations are much larger than that.
Last edited by fposte on Mon Jul 17, 2017 11:46 am, edited 1 time in total.

Swansea
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Re: Is it still worth buying a house in a state with insane property taxes

Postby Swansea » Mon Jul 17, 2017 11:38 am

The state is losing residents, and fewer people = fewer potential buyers for a home.

"Illinois’s loss of population is crippling, Bruce Rauner emphasized in his State of the State address. And the decline is considerable—so much so that the state could lose a House seat"

sschoe2
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Re: Is it still worth buying a house in a state with insane property taxes

Postby sschoe2 » Mon Jul 17, 2017 11:44 am

CppCoder wrote:It's not like landlords are providing a charity and paying property taxes for you out of the goodness of their hearts. You are paying property taxes whether you rent or own. When you own the house, at least you get a line item bill that you can take as a tax deduction.

Yes but if you get an apartment especially with a roommate there is less property value/person so that dilutes it somewhat.

I definitely plan to leave Illinois as soon as I retire (which unfortunately is decades in the future) or if anything happened to my current job I'd be out of here first thing.

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Re: Is it still worth buying a house in a state with insane property taxes

Postby Gufomel » Mon Jul 17, 2017 11:44 am

CppCoder wrote:It's not like landlords are providing a charity and paying property taxes for you out of the goodness of their hearts. You are paying property taxes whether you rent or own. When you own the house, at least you get a line item bill that you can take as a tax deduction.


I agree with this, and it was going to be part of my response to the OP. However, with that said, in my opinion one of the major upsides to owning your house for 10-20 years is that a large portion of your housing expenses are fixed and do not even increase with inflation if you own. Whereas you face year over year housing cost increases if you rent. If you own a house in an area with low property taxes, your housing costs as a percentage of income will likely decrease significantly if you remain in the same house for a long period of time. Really your only significant expense that will continue to increase is repairs and maintenance (also utilities but that's the same with renting). However, if you're in an area with extremely high property taxes, your mortgage (principal + interest) really ends up being a relatively small part of your total housing expenses. With that being the only portion that is fixed, your housing costs still continue to increase quite significantly year over year similar to renting.

I can completely understand the OP's perspective that buying a house does not seem as attractive when you're facing $10k/year property taxes that will likely only continue to increase (if for no other reason due to inflation).

sschoe2
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Re: Is it still worth buying a house in a state with insane property taxes

Postby sschoe2 » Mon Jul 17, 2017 11:47 am

fposte wrote:Property taxes aren't by state, though; I live in Illinois and pay less than half of that. I suspect you're looking at Chicago city and burbs there.

Yes my job is in the west suburbs of Chicago.

The trouble is the state pays very little to the schools or any other unit of local govt so that all comes from property and local sales taxes. Also most of the local officials are just as irresponsible and crooked at the officials in Springfield. Finally the govt is structured extraordinarily inefficiently with nearly 1000 school districts and various governing bodies each with their own high paid admins and taxing authority. I was hoping the stalemate or some managed bankruptcy like bailout mechanism mediated by the fed would force some emergency reforms but that is not going to happen.

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Re: Is it still worth buying a house in a state with insane property taxes

Postby Ron Ronnerson » Mon Jul 17, 2017 11:59 am

There isn't enough information to properly answer your question. Do you have enough saved for a down payment? Are you interested in being a home owner? Do you plan to stay in the area for the long term? How much is rent for a home similar to the one you might buy? Can you afford to buy and still meet other financial goals with a sufficient cushion in your budget?

By the way, I pay $10k in property taxes on a home I purchased a few years ago and agree that's a big number to come to terms with. You have to look at the big picture and think about the long term, though. My mortgage payment, property taxes, HOA, and insurance add up to about $2600 a month (accounting for the tax deduction on the interest) on a 2150 sq. ft. home with 4 bedrooms and 4 bathrooms. In 2010, I lived in an 1100 sq. ft apartment that was 2 bedroom and 2 bathrooms. The rent on the apartment back then was $1800 a month and is $2900 a month today. I've also built a lot of equity in the meantime and my mortgage payment is fixed for the term of the loan. Also, I live in a much bigger home with better schools than where I used to rent. I'm married, have a family, and plan to live in our home for many, many years. If I were single or planning to move, I would have probably continued to rent. Lastly, I could afford the house despite the sticker shock from the property taxes. Basically, you can't just focus on the property taxes. Consider all the relevant factors.

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Re: Is it still worth buying a house in a state with insane property taxes

Postby fposte » Mon Jul 17, 2017 12:00 pm

sschoe2 wrote:
fposte wrote:Property taxes aren't by state, though; I live in Illinois and pay less than half of that. I suspect you're looking at Chicago city and burbs there.

Yes my job is in the west suburbs of Chicago.

The trouble is the state pays very little to the schools or any other unit of local govt so that all comes from property and local sales taxes. Also most of the local officials are just as irresponsible and crooked at the officials in Springfield. Finally the govt is structured extraordinarily inefficiently with nearly 1000 school districts and various governing bodies each with their own high paid admins and taxing authority. I was hoping the stalemate or some managed bankruptcy like bailout mechanism mediated by the fed would force some emergency reforms but that is not going to happen.


Yeah, I work for a state university in an education-related program. I don't see any good solution coming down the pipeline any time soon. But if you have an option to stay clear of Cook and the collars (which it sounds like you currently don't), that would certainly help your personal budget.

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Re: Is it still worth buying a house in a state with insane property taxes

Postby Ketawa » Mon Jul 17, 2017 12:06 pm

sschoe2 wrote:
CppCoder wrote:It's not like landlords are providing a charity and paying property taxes for you out of the goodness of their hearts. You are paying property taxes whether you rent or own. When you own the house, at least you get a line item bill that you can take as a tax deduction.

Yes but if you get an apartment especially with a roommate there is less property value/person so that dilutes it somewhat.

I definitely plan to leave Illinois as soon as I retire (which unfortunately is decades in the future) or if anything happened to my current job I'd be out of here first thing.


You can rent or buy practically any type of dwelling. You could buy an apartment and rent out half of it to a roommate. You could rent a home. Why are you comparing renting an apartment to owning a home? Apples and oranges. This is a lifestyle decision separate from the rent vs own decision.

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Re: Is it still worth buying a house in a state with insane property taxes

Postby adamthesmythe » Mon Jul 17, 2017 12:25 pm

If you rent you are paying the taxes plus a reasonable profit for the landlord.

If you share the cost...you share the apartment and you are getting a smaller space to yourself and less privacy.

If you get a break on rent by taking care of owners...you have another part-time job.

No free lunch. To live in an area you have to pay to play. If you don't like the costs you should move to a place with more favorable economics.

Many of us live places because that's where the jobs are.

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Re: Is it still worth buying a house in a state with insane property taxes

Postby lazydavid » Mon Jul 17, 2017 12:33 pm

sschoe2 wrote:
CppCoder wrote:It's not like landlords are providing a charity and paying property taxes for you out of the goodness of their hearts. You are paying property taxes whether you rent or own. When you own the house, at least you get a line item bill that you can take as a tax deduction.

Yes but if you get an apartment especially with a roommate there is less property value/person so that dilutes it somewhat.


as Ketawa said, apples and oranges. These are independent variables, that all act on the imputed property taxes paid. Ways to reduce this amount are:

Live in a smaller dwelling
Live in a town/county with lower property tax rates
Cohabitate and share the expense.

Renting an apartment isn't the only way to have a roommate. You can do it while owning an apartment/condo, renting a house, or owning a house. One decision has little or nothing to do with the other.

On a sidenote, is it sad that, having written my 2nd installment property tax check yesterday, I knew this thread was about Illinois before opening it? FWIW, I went with the latter two options above, living in Schaumburg (HUGE commercial tax base, reduces the amount levied on homeowners), and my FIL sold his home and moved in with us several years ago. So while our $9200 tax bill is high (but at least only up $100 from last year!), in the context of a 4100 sqft (2650 main floor + 1500 finished basement) house in the Chicago suburbs, it's actually not that bad.
Last edited by lazydavid on Mon Jul 17, 2017 12:34 pm, edited 1 time in total.

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Re: Is it still worth buying a house in a state with insane property taxes

Postby lazydavid » Mon Jul 17, 2017 12:34 pm

duplicate post

Thesaints
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Re: Is it still worth buying a house in a state with insane property taxes

Postby Thesaints » Mon Jul 17, 2017 12:35 pm

How much is "insane", btw ?

sunny_socal
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Re: Is it still worth buying a house in a state with insane property taxes

Postby sunny_socal » Mon Jul 17, 2017 12:50 pm

No wonder people are looking to move from Chicago to San Diego:
- Terrible weather
- Insane property taxes
- Crime

It's only a matter of time before the city implodes. Don't buy there.

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Watty
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Re: Is it still worth buying a house in a state with insane property taxes

Postby Watty » Mon Jul 17, 2017 12:56 pm

sschoe2 wrote:I rather just get an apartment possibly with a room mate to lesson the tax burden and yes I've seriously thought about leaving the state but finding a comparable job is not likely for myself. What is everyone else's take?


One thing to keep in mind is that you not only have to pay the property taxes now but also into retirement. Having an extra $10,000 a year in retirement will require something in the ballpark of $250,000 in extra retirement savings to generate the needed income using the 4% safe withdrawal rate guideline.

Saying that you will move to a less expensive place when you retire is easy to say but a lot harder to do when you and your spouse have kids, grand-kids, and friends where you are at now. I moved to Atlanta during a merger with the idea what we would move somewhere else when I retired. We were even looking at a number of different places to move to. It turned out that my son got married and settled down here and they have a kid now and they only live about ten minutes from us.

We had sort of expected that once he was through college that he might move back to where we lived before or some other random place so him settling down here was a bit of a surprise but it makes sense because his wife has strong family ties to the area.

While we will likely move to a different house it we will be staying here in Atlanta.

I don't have any good answers but either as a renter or home owner you should plan on additional retirement savings if you live in a high tax state.

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Re: Is it still worth buying a house in a state with insane property taxes

Postby adamthesmythe » Mon Jul 17, 2017 1:09 pm

> One thing to keep in mind is that you not only have to pay the property taxes now but also into retirement.

I paid taxes that were not quite as high- but close- in another NE city. That got me into an in-city neighborhood so I could walk to work and only own one car. It was well worth it to lose the commute.

But- as noted- this is a crazy cost to carry into retirement. I had no problem with moving.

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Re: Is it still worth buying a house in a state with insane property taxes

Postby btenny » Mon Jul 17, 2017 1:58 pm

Sorry but there are lots of states and locations all over the US that have very high property taxes and lots of people just pay them. Plus in many places the property is also very expensive, much more than west Chicago burbs. I think Chicago overall has a MCOL, not real low COL but not HCOL either. The key is modest houses are low cost. So buying in place like this in a school district that has OK taxes should be OK. I bet if you researched various towns and school districts in the west Chicago area you could find a nice modest home for less than $300K with $7K or so in annual taxes. See below for a link to Zillow for a home and area that meet this criteria. That is not a bad situation long term IMO. That would yield a payment of $1800 or so per month.

https://www.zillow.com/homes/for_sale/h ... ect/12_zm/


Good Luck. s

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Re: Is it still worth buying a house in a state with insane property taxes

Postby simplesimon » Mon Jul 17, 2017 2:03 pm

As others have said property taxes are assessed at the town level and you can have variations across the state. What public services and amenities does the town offer? Is this something you can get in a different location with lower property taxes?

I'm in a similar situation in a different part of the country. The town with higher property taxes in a different state has more to offer than the towns with similar priced homes (or more, to factor in the difference in property taxes) in my current state.

Question for others: we often say don't let the tax tail wag the investment dog...is this appropriate for a home purchase decision?

Impromptu
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Re: Is it still worth buying a house in a state with insane property taxes

Postby Impromptu » Mon Jul 17, 2017 2:22 pm

This depends on where you live. The cities in the middle of Illinois also have high property taxes, but you get a lot more house for your money. You can have a nice $200,000 2500 square foot house and have $4,000/year in property taxes. You can get a $450,000 $3,500 square foot house and have $10,000/year in property taxes. Multiply the price by 7-10 to find out what you would pay for a similarly nice house in California.

A trick in the mid-west is to move just outside of the middle of the state cities and have very low property taxes, but you also do not get all of the normal services and amenities. A 20 minute commute through cornfields and then 10 minutes in the cities to your university isn't too bad if you are at the University of Illinois or Illinois State University.

Property taxes are a big reason that I am not upgrading my house. Instead of paying for a more expensive house with its requisite increase in utiliy and property tax costs, I just fill my less expensive house with items that I like and take a few more trips each year.
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rayout
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Re: Is it still worth buying a house in a state with insane property taxes

Postby rayout » Mon Jul 17, 2017 2:33 pm

High property taxes reduce home values and makes purchasing income properties more affordable. Makes cash flow properties more attractive. If you can swing the down payment and management issues for a duplex or 4 plex, I think that is the best route and the one I went down.

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Re: Is it still worth buying a house in a state with insane property taxes

Postby abner kravitz » Mon Jul 17, 2017 2:39 pm

lazydavid wrote:On a sidenote, is it sad that, having written my 2nd installment property tax check yesterday, I knew this thread was about Illinois before opening it?

Funny, I guessed New Jersey. Just as bad, if not worse.
Last edited by abner kravitz on Mon Jul 17, 2017 3:13 pm, edited 2 times in total.

CppCoder
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Re: Is it still worth buying a house in a state with insane property taxes

Postby CppCoder » Mon Jul 17, 2017 3:00 pm

abner kravitz wrote:Funny, I guessed New Jersey. Just as bad, if not worse.

You botched the quotes above. That comment about guessing the state was not mine...

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Re: Is it still worth buying a house in a state with insane property taxes

Postby abner kravitz » Mon Jul 17, 2017 3:03 pm

CppCoder wrote:
abner kravitz wrote:Funny, I guessed New Jersey. Just as bad, if not worse.

You botched the quotes above. That comment about guessing the state was not mine...


sorry

aristotelian
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Re: Is it still worth buying a house in a state with insane property taxes

Postby aristotelian » Mon Jul 17, 2017 3:15 pm

Property taxes per se don't matter. The question is whether the overall cost - mortgage payment, insurance, and taxes - is worth it. At the end of the day, it doesn't matter to you how much of the check goes to the government and how much goes to the bank. It is possible that a house with higher taxes will have a lower cost since other buyers are undoubtedly asking the same question.

Casper
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Re: Is it still worth buying a house in a state with insane property taxes

Postby Casper » Mon Jul 17, 2017 3:45 pm

aristotelian wrote:Property taxes per se don't matter. The question is whether the overall cost - mortgage payment, insurance, and taxes - is worth it. At the end of the day, it doesn't matter to you how much of the check goes to the government and how much goes to the bank. It is possible that a house with higher taxes will have a lower cost since other buyers are undoubtedly asking the same question.

That's true from a month-to-month affordability perspective, but you're never going to get back the money you pay in taxes. You pay it, and it's gone. The money you're paying on the mortgage principal is going into home equity, and you will (hopefully) get it all back and then some when you sell. You will never recoup the money you've paid for property tax (obviously apart from the services you hopefully obtain in exchange for payment).

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Re: Is it still worth buying a house in a state with insane property taxes

Postby BolderBoy » Mon Jul 17, 2017 4:27 pm

sschoe2 wrote:yes I've seriously thought about leaving the state but finding a comparable job is not likely for myself.

How do you know that? Are you tied directly into the Chicago mob or something?

Very few jobs exist in one locality only.
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Re: Is it still worth buying a house in a state with insane property taxes

Postby FinanceGeek » Mon Jul 17, 2017 4:42 pm

aristotelian wrote:Property taxes per se don't matter. The question is whether the overall cost - mortgage payment, insurance, and taxes - is worth it. At the end of the day, it doesn't matter to you how much of the check goes to the government and how much goes to the bank. It is possible that a house with higher taxes will have a lower cost since other buyers are undoubtedly asking the same question.


Mortgages eventually get paid off but property tax never ends. If you're buying a house with an idea to retire there you have to think of this.

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Re: Is it still worth buying a house in a state with insane property taxes

Postby Shallowpockets » Mon Jul 17, 2017 5:32 pm

$10k for property taxes is crazy. We live in Colorado and our house recent assessment is above $300k. Thus our property taxes went up. To about $1800. So although the taxes in most areas are linked to house assessment, it is nominal and not a burden. $10k would be a burden and I would not like it. As far as retirement goes, you would have to plan for that and even figuring $100k annual expenses (we are $45k) you would be leaving 10% on the table.
I just cannot get my head around property taxes at those levels.
If you move out of Chicago you get yourself a raise right there and could take a job at that much less if necessary because your salary might go up, but your property taxes will never go down.
You also state working for a government entity. Aren't the finances of of Illinois in such a condition as to possibly jeopardize your pension? And would the state not think about raising some of their taxes (property) in an effort to stave off fiscal problems?
Seems like it can only get worse.

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Re: Is it still worth buying a house in a state with insane property taxes

Postby Thesaints » Mon Jul 17, 2017 5:39 pm

10k in Cali are on the cheap side, unless one purchased decades ago.
I guess it is a little like BMW vs. Honda. One can save a lot by buying a Honda, but then that's what he gets to drive.

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Re: Is it still worth buying a house in a state with insane property taxes

Postby bigred77 » Mon Jul 17, 2017 5:48 pm

As someone whose property taxes have now exceeded 5 figures per year myself, it's not very fun. But I knew what those taxes would be when I bought the property. It's just the cost of doing business. If I didn't want to pay those taxes I had 3 options: buy a smaller property, buy somewhere else, or rent. None of those 3 alternatives outweighed the benefits of buying the property I wanted, so I pay the taxes every year and move on with my life.

At least my state does not have state income taxes, so it's a little easier to swallow paying big property tax bills.

hookemhorns
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Re: Is it still worth buying a house in a state with insane property taxes

Postby hookemhorns » Mon Jul 17, 2017 5:50 pm

Try living in Texas where property taxes in Dallas are 2.75% of "assessed" value, which is pretty much pulled out of thin air but always increases by mid to high single digits every year.

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Re: Is it still worth buying a house in a state with insane property taxes

Postby Nearing_Destination » Mon Jul 17, 2017 5:57 pm

Thesaints wrote:10k in Cali are on the cheap side, unless one purchased decades ago.
I guess it is a little like BMW vs. Honda. One can save a lot by buying a Honda, but then that's what he gets to drive.


If you can't afford the gas, it doesn't matter what you have in the garage, as you aren't driving it.

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Re: Is it still worth buying a house in a state with insane property taxes

Postby Thesaints » Mon Jul 17, 2017 6:08 pm

Nearing_Destination wrote:
Thesaints wrote:10k in Cali are on the cheap side, unless one purchased decades ago.
I guess it is a little like BMW vs. Honda. One can save a lot by buying a Honda, but then that's what he gets to drive.


If you can't afford the gas, it doesn't matter what you have in the garage, as you aren't driving it.


That's covered by the general rule "Don't engage in expenses, when you can't afford paying 1/50-th of the sum".
If one buys a car and has to struggle to come up with gas money, very likely he won't be able to afford repairs when they are needed. Wrong purchase to begin with.

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Re: Is it still worth buying a house in a state with insane property taxes

Postby tigermilk » Mon Jul 17, 2017 6:34 pm

hookemhorns wrote:Try living in Texas where property taxes in Dallas are 2.75% of "assessed" value, which is pretty much pulled out of thin air but always increases by mid to high single digits every year.

What are you complaining for? Only 2.75%? That's nothing. I'm sitting at 3.1% here south of Houston...

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Re: Is it still worth buying a house in a state with insane property taxes

Postby Grt2bOutdoors » Mon Jul 17, 2017 6:37 pm

abner kravitz wrote:
lazydavid wrote:On a sidenote, is it sad that, having written my 2nd installment property tax check yesterday, I knew this thread was about Illinois before opening it?

Funny, I guessed New Jersey. Just as bad, if not worse.


As if New York, Connecticut or Taxachussets were any better? :oops: There are plenty of states with high property taxes and yet, tons of people continue to live there. Why? Well, it's quite simple, the economy. If you don't believe me, ask all the young folks who are moving from the midwest and parts north, south, east and west who want to live and work in the greater NY region. Not saying it's totally rational, but there are benefits to living in NY else folks would not willingly pay such high costs - myself included.

If I had to "rent" my current living space, it would cost me at least $3K per month if not more and, I'd have to be surrounded by tenants to the left, right, up and down and the associated noise/other complaints 24/7 - no thank you. My equity would be zero, it would be somewhat flexible in that one could move with advanced notice, but I would be deluding myself that I'm not paying property taxes - of course I am. The landlord is simply taking it from my rent and paying it to the local taxing authority, what's left is used to increase the landlord's equity in the building.
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Re: Is it still worth buying a house in a state with insane property taxes

Postby sschoe2 » Mon Jul 17, 2017 7:28 pm

BolderBoy wrote:
sschoe2 wrote:yes I've seriously thought about leaving the state but finding a comparable job is not likely for myself.

How do you know that? Are you tied directly into the Chicago mob or something?

Very few jobs exist in one locality only.

I have looked at other jobs in my profession. Most pay 30-50% less they expect you to work without benefits for a staffing/temp agency, the benefits at my current company are very good, the hours are good turnover is very low. The only other decent employer I've seen is the Fed Govt in my profession.

I've had the misfortune of working for some bad companies and have no desire to risk ending up back at a terrible company. It almost seems a choice between violently hating where I live (mainly the govt here) and hating my job.

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Re: Is it still worth buying a house in a state with insane property taxes

Postby boglegirl » Mon Jul 17, 2017 7:50 pm

Impromptu wrote:This depends on where you live. The cities in the middle of Illinois also have high property taxes, but you get a lot more house for your money. You can have a nice $200,000 2500 square foot house and have $4,000/year in property taxes. You can get a $450,000 $3,500 square foot house and have $10,000/year in property taxes. Multiply the price by 7-10 to find out what you would pay for a similarly nice house in California.
...


I'm not a fan of California's cost of living or tax rates, but the bolded part just isn't accurate. You can get a decent 3000+ square foot house in many California cities for twice the price, not 7-10 times the price. And your taxes will be the same $10k/ year. (of course you can't do this in the Bay area). But here's an example of one I found on the first city I checked which is commute-able to either LA or Orange County employers: https://www.zillow.com/homedetails/1589-Agave-Ave-La-Habra-Heights-CA-90631/21468471_zpid/ I don't know what your definition of "nice" is, but this one has a pool and is in a good area - would need some updating for my taste, but I think many would consider it at least "nice". California has a HCOL, but we don't all live in multi-million dollar mansions!

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Re: Is it still worth buying a house in a state with insane property taxes

Postby lazydavid » Tue Jul 18, 2017 4:53 am

Watty wrote:One thing to keep in mind is that you not only have to pay the property taxes now but also into retirement. Having an extra $10,000 a year in retirement will require something in the ballpark of $250,000 in extra retirement savings to generate the needed income using the 4% safe withdrawal rate guideline.


The flipside of that is that most sources of retirement income are exempt from income tax, and property taxes have both a senior exemption (reduces the rate vs. non-seniors) and a senior freeze exemption (locks the valuation, resulting in taxes that increase slowly or even decrease over time). So in some ways retirees are better off than workers here, despite the high taxes.

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Re: Is it still worth buying a house in a state with insane property taxes

Postby simplesimon » Tue Jul 18, 2017 5:19 am

tigermilk wrote:
hookemhorns wrote:Try living in Texas where property taxes in Dallas are 2.75% of "assessed" value, which is pretty much pulled out of thin air but always increases by mid to high single digits every year.

What are you complaining for? Only 2.75%? That's nothing. I'm sitting at 3.1% here south of Houston...


Sure, but Texans don't pay state income taxes.

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Re: Is it still worth buying a house in a state with insane property taxes

Postby Swansea » Tue Jul 18, 2017 6:52 am

Property tax in my county was raised 8.7% last year. Even when there is no % increase, the assessment often rises to bring in more cash.

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Re: Is it still worth buying a house in a state with insane property taxes

Postby Impromptu » Fri Jul 21, 2017 8:39 am

boglegirl wrote:
Impromptu wrote:This depends on where you live. The cities in the middle of Illinois also have high property taxes, but you get a lot more house for your money. You can have a nice $200,000 2500 square foot house and have $4,000/year in property taxes. You can get a $450,000 $3,500 square foot house and have $10,000/year in property taxes. Multiply the price by 7-10 to find out what you would pay for a similarly nice house in California.
...


I'm not a fan of California's cost of living or tax rates, but the bolded part just isn't accurate. You can get a decent 3000+ square foot house in many California cities for twice the price, not 7-10 times the price. And your taxes will be the same $10k/ year. (of course you can't do this in the Bay area). But here's an example of one I found on the first city I checked which is commute-able to either LA or Orange County employers: https://www.zillow.com/homedetails/1589-Agave-Ave-La-Habra-Heights-CA-90631/21468471_zpid/ I don't know what your definition of "nice" is, but this one has a pool and is in a good area - would need some updating for my taste, but I think many would consider it at least "nice". California has a HCOL, but we don't all live in multi-million dollar mansions!


It is accurate where I checked, but that is the bay area near where my brother lives in Sunnyvale. On Zillow I searched for a house with the same specs as my midwest house. The average price was nearly 10X what I paid for my house in the midwest. You can probably live farther away from work, but who wants to commute 2 hours every day? And that is if you go in off traffic times.
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Re: Is it still worth buying a house in a state with insane property taxes

Postby kmurp » Fri Jul 21, 2017 9:17 am

When people refer to property taxes, does that include school taxes as well? Where I live these are separate bills six months apart.


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Re: Is it still worth buying a house in a state with insane property taxes

Postby lazydavid » Fri Jul 21, 2017 9:46 am

kmurp wrote:When people refer to property taxes, does that include school taxes as well? Where I live these are separate bills six months apart.


In this case yes. But our property taxes (including school taxes) are so large that they too are six months apart--paid in two installments. 55% of the previous year's total in January, and the remainder of the current year's total in July.

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Re: Is it still worth buying a house in a state with insane property taxes

Postby kmurp » Fri Jul 21, 2017 9:52 am

hookemhorns wrote:Try living in Texas where property taxes in Dallas are 2.75% of "assessed" value, which is pretty much pulled out of thin air but always increases by mid to high single digits every year.

That's almost exactly where we are as a percentage but in upstate NY where there's an income tax as well. We are grappling with is issue now and are leaning towards selling our primary residence.

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Re: Is it still worth buying a house in a state with insane property taxes

Postby Meg77 » Fri Jul 21, 2017 10:01 am

sschoe2 wrote:
CppCoder wrote:It's not like landlords are providing a charity and paying property taxes for you out of the goodness of their hearts. You are paying property taxes whether you rent or own. When you own the house, at least you get a line item bill that you can take as a tax deduction.

Yes but if you get an apartment especially with a roommate there is less property value/person so that dilutes it somewhat.

I definitely plan to leave Illinois as soon as I retire (which unfortunately is decades in the future) or if anything happened to my current job I'd be out of here first thing.


Then move! I don't know what you do, but I can't think of many jobs that only exist in Chicago. There is no sense putting off something you seem to want very much to do (leave Chicago/Illinois) for decades simply because of the job you happen to have. You sound youngish and single. Life is short. Don't buy a home in a place you don't like! Start looking for jobs in another area.
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Re: Is it still worth buying a house in a state with insane property taxes

Postby alfaspider » Fri Jul 21, 2017 11:05 am

tigermilk wrote:
hookemhorns wrote:Try living in Texas where property taxes in Dallas are 2.75% of "assessed" value, which is pretty much pulled out of thin air but always increases by mid to high single digits every year.

What are you complaining for? Only 2.75%? That's nothing. I'm sitting at 3.1% here south of Houston...


Move 30 minutes north and you can get down to 2.5 :happy

At least we don't have state income tax on top of those taxes. I moved from NYC, and my state & local tax burden was about 30% higher overall even without owning a home- it would have been even worse had I owned there. My only real gripe is the silly game you have to play with assessments. Every year, they try to increase my assessment by the maximum allowed 10% (even though there's no way my home actually appreciated by that much). Every year, I protest and they back down to no or minimal increase. It would be much nicer I didn't have to make the annual schlep down to the tax assessor's office. I suppose they do it because there are people who don't know any better and just pay up.

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Re: Is it still worth buying a house in a state with insane property taxes

Postby Pajamas » Fri Jul 21, 2017 11:14 am

You should put property taxes in context. All U.S. states (and all or almost all cities, counties, etc.) need revenue to provide services. They provide different levels of services and have various ways of raising revenue. "There ain't no such thing as a free lunch."

If you are okay living in an area with few services and low government revenues, that's fine. If you want to live in an area with more services and higher government revenues, that's okay, too. And you can also pick and choose where you want to live based on how those revenues are raised and how advantageous that is for you.

But focusing only on property taxes to the exclusion of considering other government sources of revenue (income tax, intangibles tax, sales tax, taxes on gambling, marijuana, liquor, hotels, etc.) and the level of services provided prevents you from making the best decision on where to live.


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