Travis County Property Appraisals Now Available (Austin, Howe: mortgage, house, income)

[blameyourself]

Originally Posted by CarnivalGal

Right. I get how it works. But it's no different than being taxed on the value of our 401K when it goes up, like it was income, even if we never sold any holdings or realized any of that gain.

You are correct. Our assessed value didn't go down. However, it has in the past. Don't remember the year, but it was a few years after we bought our house.

I know this is sacrilege in Texas, but I would much rather have a state income tax than the Texas property tax system. I've lived in states with both.

I would too for the sole reason that you have some control over income tax. The argument that is often made for not having income tax is the lack of trust in politicians and taxing jurisdictions. I find it ironic that lack of trust doesn't seem to apply to property tax. At least with income tax, people can max out on 401k contributions, use health savings accounts, possibly itemize their deductions, and invest in tax deferred funds (in other words you have some control). There's not much you can do with property tax as you are at the mercy of the taxing jurisdiction and what politicians do (none of which I trust as far as I can spit).

[Need4Camaro]

Income Tax is more fair in most cases ... especially for retirees ...but at this point I wouldn't try to ask any politician of either political affiliation to implement one. We would end up like Illinois, a high property tax and a state income tax to go on top of it, and we would still have toll roads as well as faulty water and power infrastructure on top of that.

Texas is not a state I would try to retire in. I think that the tax system is not very retiree friendly. TX Tax system works best for the middle aged working class, especially if they are renting. Owning, well it depends on how much 'house' you try to manage. But on average a $400 - $500k home between Georgia (income / property tax) and Texas (property / sales tax) on a $100k annual salary comes out to be about the same in overall taxation. The difference being you don't see how much in income tax you're paying where Property Tax hits you as a lumpsum bill at the end of the year that can make your jaw drop.

[blameyourself]

Originally Posted by Need4Camaro

Income Tax is more fair in most cases ... especially for retirees ...but at this point I wouldn't try to ask any politician of either political affiliation to implement one. We would end up like Illinois, a high property tax and a state income tax to go on top of it, and we would still have toll roads as well as faulty water and power infrastructure on top of that.

Texas is not a state I would try to retire in. I think that the tax system is not very retiree friendly. TX Tax system works best for the middle aged working class, especially if they are renting. Owning, well it depends on how much 'house' you try to manage. But on average a $400 - $500k home between Georgia (income / property tax) and Texas (property / sales tax) on a $100k annual salary comes out to be about the same in overall taxation. The difference being you don't see how much in income tax you're paying where Property Tax hits you as a lumpsum bill at the end of the year that can make your jaw drop.

So my question remains...you clearly don't trust the politicians (similar to me), so why do you have faith in them to do something favorable in regards to property taxes?

[Need4Camaro]

Originally Posted by blameyourself

So my question remains...you clearly don't trust the politicians (similar to me), so why do you have faith in them to do something favorable in regards to property taxes?

I don't. We have a huge surplus but frigid infrastructure and questionable schools in many areas. But at the same time I also don't want to make the problem worse.

[CarnivalGal]

Originally Posted by Trainwreck20

We have looked at various states and tax setups for when we retire. PA has not been on our radar so I have not looked at it and am not very familiar with the mechanics. So I went to poke my nose into it.

It looks like PA rates are relatively high (compared to nationally) but prices aren't as bad. No exemptions for senior citizens UNLESS you qualify as low income (<$35,000/yr), which is quite possible for anybody living off SS and not too much else, I would think? If you meet the requirements, then all your property taxes are frozen (not reduced).

Picked a few random properties in York County that are for sale:
1200 sf
Last sold 15 years ago for $118k
currently asking $225k
$4.1k/yr in taxes

2,000 sf
Current appraisal $191k
Currently asking $350k
$6.6k/yr taxes

1,500 sf
Last sold 7 years ago for $150k
Currently asking $240k
$3.7k/yr in taxes

Taxes are lower, but not negligible, and much of the difference is in the value not the rate. I.e.my current effective rate (taxes/value) is 1.72 and these York properties are 1.8, give or take a tenth. If you are <$35k income, then that is a huge savings. If you are not, taxes will go up with inflation (I don't see any freeze) and 10 or 15 years down the road, your taxes may be pretty high. They may also, ofc, change the freeze requirements which would help fixed income.

I know next to nothing about PA, so not sure if York county is an outlier. PA does have a lower sales tax, it appears.....

There is a 4.5% inheritance tax on the value of an estate (including the house) when a descendant is the heir. 12-15% when to anyone else (sibling, in-law, etc). Home improvement and real estate sales have a 1% state tax.

We're from Pennsylvania (Philly 'burbs). Most of our family is still there, which is why my mom chose it. She sold her condo here for $385K. She's looking to buy pretty much the same thing (condo, same size, etc.) and spending about the same amount of money, which she should be able to get for the specific parts she's looking at. She is willing to go up to $450K. She could still pay cash at that price. But one of the keys is that PA doesn't reassess every year. So her property taxes will be pretty static.

[CarnivalGal]

Originally Posted by Trainwreck20

Oh, yeah, our value has gone up and down over the years. Back in 2008ish time frame was the last 'big' drop, although there was the dot-com bust back in 2001-2002 that dropped the value, too. What is (relatively) nice about a drop in value is that you get to 'reset' your 10% cap level, so if it is followed up by a big year, you don't have the higher net appraised but a lower cap instead.

I get that some people prefer income and some property, have no issue with people having different preferences. But for my family, property tax works out much better for us. It would have to be very low state taxes to off-set the property tax. For many two-income households, that is the case, but depends on the dollar amount, ofc. But to be honest, I trust the politcos at the state level setting my tax rates less than the local politicos.

Texas ranks 29th in total tax burden per capita. So there are plenty of states that have a state income tax but whose residents still pay less in total taxes. But you're right in that some people benefit more from one system and some benefit more from the other.

[Trainwreck20]

Originally Posted by CarnivalGal

Texas ranks 29th in total tax burden per capita. So there are plenty of states that have a state income tax but whose residents still pay less in total taxes. But you're right in that some people benefit more from one system and some benefit more from the other.

Those rankings are pretty accurate at a high level, but miss so much detail that they really can't apply to much of anyone on a personal level. I.e. some are so bad that they just look at property tax rate instead of tax bill. Most are better and look at the average property tax bill but don't differentiate between landlord (with no HSE) and homeowner. Very few take into account exemptions/freezes for 65+, which varies enormously by state.

I love spreadsheets and spend most of my working day inside a spreadsheet. Even for the most simple attempt at a personal tax analysis based on location, there are so many parameters and many of them vary so much from person to person. Sometimes the differences are very small (or impossible to accurately quantify) and people fail to take into account intangibles - family, friends, weather, services, etc. - which may make one place look better than another when it is not.

[riaelise]

How did your value go down slightly when across the board in the metro area the appraisals are down quite a bit? Prices have gone down basically everywhere.

Wilco tends to be a bit more sensible when it comes to valuing the dirt.

[Trainwreck20]

Originally Posted by CarnivalGal

We're from Pennsylvania (Philly 'burbs). Most of our family is still there, which is why my mom chose it. She sold her condo here for $385K. She's looking to buy pretty much the same thing (condo, same size, etc.) and spending about the same amount of money, which she should be able to get for the specific parts she's looking at. She is willing to go up to $450K. She could still pay cash at that price. But one of the keys is that PA doesn't reassess every year. So her property taxes will be pretty static.

I noticed their process was different, but did not dig into it. There were some houses that were sold many years ago (decades) that 'last sold' for $20k but taxes were on much higher (more reasonable) values. Others were sold for $1, which I assume was an attempt (not sure if successful) to avoid the 1% real estate transaction tax.

I also did not look at what income was counted toward the $35k to freeze property taxes. There were some county rebates that only county 1/2 of SS, which would lower a lot of people to pretty low. I assume 401(k) income would count, but not sure. Or what happens if you are <$35k for years and then the required distribution from a 401(k) pushes you over - do your taxes spring up? I would think there is some system to address that, but it isn't immediately obvious.

[Trainwreck20]

Originally Posted by riaelise

How did your value go down slightly when across the board in the metro area the appraisals are down quite a bit? Prices have gone down basically everywhere.

Wilco tends to be a bit more sensible when it comes to valuing the dirt.

Separating the land from the improvement is meaningless for most houses. Unless you can move your house independent of the improvement (manuf. home or whatever), then the assessed value is based on the sum of land and home, which any potential buyer (or seller) would have to do as a unit. No assessor is ever going to let you protest land as opposed to house, or house opposed to land. A lot may be more or less valuable, but it is baked into the property as a whole. The only real use is when you have ag exempt land or empty property.

Ours still hasn't been posted (none on our street), but a couple streets over they have the 2023 appraisals and they are up YoY 1%-5%, it looks like, with a few down and a few up more .