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Strictly speaking this isn't just a retirement topic, but for us (wife and I) it's specifically a consideration for retirement relocation. I'm interested in hearing comments about anything your state does to limit the rate of escalation in property taxes. California's "Prop 13" is one example.
Here's an article I found that describes, in general, the various schemes for limiting the increases in property tax over time. It's useful, but provides little detail on on the scheme(s) employed by any particular state.
Strictly speaking this isn't just a retirement topic, but for us (wife and I) it's specifically a consideration for retirement relocation. I'm interested in hearing comments about anything your state does to limit the rate of escalation in property taxes. California's "Prop 13" is one example.
Here's an article I found that describes, in general, the various schemes for limiting the increases in property tax over time. It's useful, but provides little detail on on the scheme(s) employed by any particular state.
Florida has a max of 3% increase per year in property tax for any "homesteaded" property. Basically, this is a property that you own and live in as your primary residence.
"In Florida, a homestead property refers to a primary residence that is eligible for property tax reduction and other benefits associated with the Florida Homestead Exemption1. To qualify, the property must be the homeowner’s primary residence and the homeowner must hold legal title to the property."
Maryland has a Homestead Exemption for all owner-occupied houses. It limits the tax increase to 10%/year (local jurisdictions may set it lower). So, since Maryland (the State not localities) reassesses every property every three years your property taxes can raise by 30% (actually a little more due to compounding) over the three years.
We've been in our house so long the market value assessment is about 80% higher than our taxable assessment, a situation that drives elected officials crazy. They want people to sell and move about every seven years so the increased assessment over the Homestead Exemption can be recaptured with higher property taxes.
Full disclosure: I was a local elected official for over twenty years but never wanted people to move out (well, there were a couple or fifteen but not because we'd get higher taxes) because that causes too much churn in a small town and sure as anything we'd have a project that was years in the making getting ready to start and somebody who'd lived in town about two and half minutes would start demanding we stop the project because "nobody wants it and it's too expensive". That ran the gamut from getting central water to commercial development to flood control which would protect their house.
Oh, Maryland also has a property tax forbearance program for low income seniors. I don't know all the details but my understanding is that the delayed taxes are recaptured upon the death of the owner or when the residence changes hands. It's not publicized much.
In most states there are few limits on how much they can increase your property taxes each year. Nevada for example is the only one that does it based on how much it would cost to rebuild your home. Most do it on some sort of appraised value but when values go up in the market they automatically say your home is worth more too. I have yet to ever see a property tax drop. It always goes up.
In Houston, our property taxes went down by over 50% last year when I turned 65. City and County exemptions went up by $275,000, school taxes are frozen.
Scratch Vermont off your list, too. They do nothing for seniors. Every cent you bring in is considered 'income.' There IS an 'offset' based on income (homestead), but it's become smaller and smaller every year since education is funded by property taxes (here) and the people in Montpelier spend like drunken sailors. (apologies to drunken sailors).
In most states there are few limits on how much they can increase your property taxes each year. Nevada for example is the only one that does it based on how much it would cost to rebuild your home. Most do it on some sort of appraised value but when values go up in the market they automatically say your home is worth more too. I have yet to ever see a property tax drop. It always goes up.
During the 2008 real estate crisis, our property tax in Phoenix Metro dropped quite a bit because it was based on market value. When we moved in 2012, the property tax was still lower than when we purchased the house.
Of course, when we sold our house in 2012, we took a brutal beating of tens of thousands of dollars.
Oddly, even though TN is one of only 4 states with none of these tax limiting schemes, on average we have one of the lowest tax rates per market value in the country. I guess we don't NEED limits. The way TN assigns an assessed value is different, so it implants a limiting force without an actual limit. The assessed value of the home is 1/4 of the market value, and tax is calculated based upon the assessed value. Then your home is reassessed on a 4- to 6-year cycle, so if your home increases in value every year, but you're only reassessed after 4 years, you pay the lower rate for 3 extra years before your taxes increase again. Your tax payments accumulated over time are lower than if it were reassessed more frequently.
The RATE of property taxes as a percentage of market value is widely varied by county within the state meaning property taxes in one county can be 4 times the rate in another county. Shelby county (Memphis area) property taxes are 4 times higher than some rural TN counties. When comparing property taxes you should check on a granular level. Even owning in the incorporated city limits within a county can raise your property taxes, and not just in TN.
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