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Is the lion's share of your tax burden primarily from property taxes? Just curious. Obviously, there are many taxes. But that one seems to be the source of greatest complaints I've heard, especially if you live on acreage. For some reason those WA locals seem to get targeted by assessors as those 'rich' folks.
My next door farming neighbor finally gave up and sold most of his property to developers. When speaking to him about it, he basically said there is 'no money in dairy farming' anymore. And these developments will pay a lot of money for the land toward his retirement. I know Bellingham and Whatcom County may have different restrictions on land development of farms or acreage properties like this. But in Clark County this is a big trend with many local farmers moving toward becoming developers themselves or selling 'most' of their land for residential housing developments. This is right nextdoor to us with hundreds of new homes going in like dominos as one farm sells and then another and so on...
Derek
If he lived in Oregon dairy farming would still suck, but he wouldn't be able to sell out to developers if he was outside the urban growth boundary, which I'm guessing every dairy farm probably is.
And yes, I come from a family of dairy farmers so I personally know that it sucks.
And yes, I come from a family of dairy farmers so I personally know that it sucks.
Apologies for quoting out of context, but I'd venture a guess, that much of our respective differences in perspectives about taxes, has to do with whether we have a "real property" or a "paper assets" background.
So for example, a person who hails from farming-stock, whose family has owned land or real-estate or other such physical property for generations - which has also been the primary source of the family's wealth - would be sensitive to property taxes or some form of business-taxes, to land use restrictions, to the cost of utilities/power, to physical restrictions and costs and fees of various kind.
But a person whose forefathers were all clerks, lawyers, medical doctors, professors, Wall Street people and so on, who might have a large portfolio of stocks and bonds, but who doesn't own a single square inch of dirt, would be primarily sensitive to income tax, and has no reckoning of the costs in the above paragraph.
There's a parallel to being a "citizen of somewhere" and a "citizen of nowhere". The former have deep roots, in one state or county. If the statehouse votes-in some onerous new law, it's a personal and visceral loss. The latter might immigrate internationally and then move to NYC and then Texas or California (for example) and then to WA. Maybe this person will retire in Germany or Israel or whatever. So if local ordinances change and property gets taxed differently, OK, whatever, keep on moving. But writing a high 5-figure or 6-figure income tax check to the State of New York or Massachusetts or whatever - now that hurts!
Last edited by ohio_peasant; 01-23-2023 at 07:50 PM..
If he lived in Oregon dairy farming would still suck, but he wouldn't be able to sell out to developers if he was outside the urban growth boundary, which I'm guessing every dairy farm probably is.
And yes, I come from a family of dairy farmers so I personally know that it sucks.
In a way, it's like the Beverly Hillbillies 'rags to riches' stories for these local dairy farmers and hobby ranchers. It's hard to turn down when compared to the smaller income and lots of manual labor they're accustomed to. If someone offers you millions of dollars for your land, it gives one pause for thought.
Apparently, OR and 'some' WA counties don't give them that option. But Clark County isn't the only one expanding like this. Although its the 3rd fastest growing county in the state. There's ~ 4000 new homes in the state currently with more being built. WA New Homes
That said, there is still new construction in OR with ~ 2300 new homes. So, somebody is selling some land. I doubt these are all teardowns and rebuilds. OR New Homes
Derek
Last edited by MtnSurfer; 01-23-2023 at 08:14 PM..
In a way, it's like the Beverly Hillbillies 'rags to riches' stories for these local dairy farmers and hobby ranchers. It's hard to turn down when compared to the smaller income and lots of manual labor they're accustomed to. If someone offers you millions of dollars for your land, it gives one pause for thought.
Apparently, OR and 'some' WA counties don't give them that option. But Clark County isn't the only one expanding like this. Although its the 3rd fastest growing county in the state.
Derek
Here is the reality for a marginal dairy farm in Clark County.
It is almost certainly guaranteed that none of his kids want to have anything to do with dairy farming. That is a brutal lifestyle and much worse on the west side of the Cascades when you are always dealing with cold, rain, and mud. For what is likely to be a minimum wage job with zero days off ever (if you count up the total hours you work). If you are going to run a big profitable dairy, far better someplace dry on the eastern side and then get a bunch of immigrant labor to run it. Lots of big dairies in Idaho, for example. There used to be a bazillion dairies in Clark County, especially around Ridgefield. But they are a legacy of the era before mass refrigeration and transport, when food and dairy markets were more local. Now our dairy products are just as likely to come from big California farms or Idaho dairies.
So if your kids want nothing to do with it, what are you going to do? The chances of finding a buyer who wants to actually continue with dairy farming are zero point zero. No one can purchase say 100 acres in north Clark County and be profitable dairy farming with what that land will cost. So your only option is to sell to developers who are the only buyers who can afford to buy a 100 acre plot. If it is a super scenic spot with beautiful views then maybe you might find some wealthy person who wants to put a hobby farm or horse farm there, but most dairies aren't. They are on the lower flat lands.
The only difference in Oregon is that the urban growth boundaries limit residential subdivisions on rural land. So someone will buy it and put in a winery or grow nursery plants or something. Or else you can maybe keep the land and lease it out to other farmers. But that is about it.
Is the lion's share of your tax burden primarily from property taxes? Just curious. Obviously, there are many taxes. But that one seems to be the source of greatest complaints I've heard, especially if you live on acreage. For some reason those WA locals seem to get targeted by assessors as those 'rich' folks.
My next door farming neighbor finally gave up and sold most of his property to developers. When speaking to him about it, he basically said there is 'no money in dairy farming' anymore. And these developments will pay a lot of money for the land toward his retirement. I know Bellingham and Whatcom County may have different restrictions on land development of farms or acreage properties like this. But in Clark County this is a big trend with many local farmers moving toward becoming developers themselves or selling 'most' of their land for residential housing developments. This is right nextdoor to us with hundreds of new homes going in like dominos as one farm sells and then another and so on...
Derek
Yes, I have a small home I built myself on 5 acres. The usable area on the 5 acres was only about 4,000SQ/FT. It's not even painted or landscaped nor is our deck installed yet(waiting for decent weather) and my 2023 tax evaluation increased greatly. Since 2016 when I acquired the land the assessed value increased 48%, then that value tripled. I argued that for 2022 because the house wasn't done, but the "tripling" stuck for 2023. Between the property taxes and all other state taxes I pay plus sales taxes on applicable purchases, it added up to 12% of my gross income for 2022. 2023 will be about the same, won't be making so many sales taxable purchases for house stuff but property taxes are now up bigly. Total tax load calculators are right, an income tax and much lower property taxes would sum up to far less than that in many other states. Some of those other states also offer more affordable housing, lower COL, better roads, lower crime, and better weather which comes with better solar power potential, so, I have my eye on the exit door from WA.
Regarding the farms, it doesn't bode well for the future of locally grown dairy/food stuffs. Property taxes and high valuations, together with water/salmon issues, are forcing the farmers to sell out our sustainability.
Yes, I have a small home I built myself on 5 acres. The usable area on the 5 acres was only about 4,000SQ/FT. It's not even painted or landscaped nor is our deck installed yet(waiting for decent weather) and my 2023 tax evaluation increased greatly. Since 2016 when I acquired the land the assessed value increased 48%, then that value tripled. I argued that for 2022 because the house wasn't done, but the "tripling" stuck for 2023. Between the property taxes and all other state taxes I pay plus sales taxes on applicable purchases, it added up to 12% of my gross income for 2022. 2023 will be about the same, won't be making so many sales taxable purchases for house stuff but property taxes are now up bigly. Total tax load calculators are right, an income tax and much lower property taxes would sum up to far less than that in many other states. Some of those other states also offer more affordable housing, lower COL, better roads, lower crime, and better weather which comes with better solar power potential, so, I have my eye on the exit door from WA.
Regarding the farms, it doesn't bode well for the future of locally grown dairy/food stuffs. Property taxes and high valuations, together with water/salmon issues, are forcing the farmers to sell out our sustainability.
As an old RE appraiser, I can't help wonder if you think you're property 'value' actually went up that much since you purchased it 2016? I know that area is prime real estate for some. And 5 acres sounds like a lot. But if only 4000 sf is usable, it would be interesting to see what it appraises at now. That would be a more challenging RE appraisal to get right than your typical Bham suburban home. The assessor may or may not have done the best job 'estimating' its value. Sometimes they are rushed and without many data points, error on the side of more taxes.
How do you think your property tax would differ if you didn't live on acreage vs. a more standard sized residential lot in BHam? Just curious.
The only real basis of recent values they have to go from is two of the neighboring homes which sold for $695K and $594K. My place doesn't have a garage by comparison. My point is that our values are driven almost entirely by what some out-of-the area buyer is willing to pay. Then we all get taxed on that, despite the fact that only about 3% of the wage earners here can afford that.
Bellingham, despite now crawling with homeless and crime, still demands a premium. $350K for a tiny narrow lot in the Sunnyland area for example.
The only real basis of recent values they have to go from is two of the neighboring homes which sold for $695K and $594K. My place doesn't have a garage by comparison. My point is that our values are driven almost entirely by what some out-of-the area buyer is willing to pay. Then we all get taxed on that, despite the fact that only about 3% of the wage earners here can afford that.
Bellingham, despite now crawling with homeless and crime, still demands a premium. $350K for a tiny narrow lot in the Sunnyland area for example.
Unfortunately, in your case, if some neighbors were willing to pay those prices regardless of where they came from, that sets a new 'baseline' of home values in your area. Of course, they are supposed to take into account outliers - one offs. But you've got two in the $600-700k range. And I'm sure there are a lot more in BHam that sell in that range. It's become more common throughout the state. Even if those are Chinese investors who bought them as vacation homes or flippers, it doesn't factor in. All appraisals are based upon recent sales as the primary indicator of 'current' value, a.k.a the market approach. A buyer's background is always irrelevant. Banks and other RE related businesses never ask and honestly don't care. They only look at those numbers. It's just how the RE game works in the US.
So, exploring other states sounds like a good option for you unless the tax laws change for Washingtonians. That is more of a long shot even though being discussed here. Changing the state constitution in a way that lowers taxes for some is a big uphill battle. The writing is already on the wall and prices along with associated taxes are only going in one direction long-term... and they are not down.
Unfortunately, in your case, if some neighbors were willing to pay those prices regardless of where they came from, that sets a new 'baseline' of home values in your area. Of course, they are supposed to take into account outliers - one offs. But you've got two in the $600-700k range. And I'm sure there are a lot more in BHam that sell in that range. It's become more common throughout the state. Even if those are Chinese investors who bought them as vacation homes or flippers, it doesn't factor in. All appraisals are based upon recent sales as the primary indicator of 'current' value, a.k.a the market approach. A buyer's background is always irrelevant. Banks and other RE related businesses never ask and honestly don't care. They only look at those numbers. It's just how the RE game works in the US.
So, exploring other states sounds like a good option for you unless the tax laws change for Washingtonians. That is more of a long shot even though being discussed here. Changing the state constitution in a way that lowers taxes for some is a big uphill battle. The writing is already on the wall and prices along with associated taxes are only going in one direction long-term... and they are not down.
Derek
It's really too bad, trades and service level workers are flying out of WA, in a way that is really hurting the area. Housing and the related COL are just too expensive. It's not so much about me, I mean I can work anywhere. But my work is in a place where they are short staffed and also not very competitive due to high costs to retain workers. Most who entertain taking a position look at housing here and go "nope!". Middle/working class need a break, or we aren't going to have any. The handyman I use told me a horror story yesterday, the power went out during the ice storm and a pipe froze and burst in someone's home while they were gone out of state. It took so long to get anyone in there(this week) to start drying things up that it molded badly and insurance is scrapping the house!
I'm sure the time will come where my taxes will rise so much it's not financially viable for me to stay, and I don't want to stay in a place where needed services are scarce to non-existent as I get older and more unable to DIY. The continued trend is what I find disturbing, and NOTHING the state is doing is making it better.
Our property tax bill here in the Vancouver area is almost identical to what it was in Texas even though our Washington house is at least double the value of the one we owned in Texas. Don't believe me?
Here is a $1,375,000 listing in Camas WA that is 4,048 sf and has a lake view: https://www.zillow.com/homedetails/2...23255019_zpid/ Scroll down to the taxes and you will see that their 2021 property taxes were $10,134 on an assessed value of $908,434
Here is a $578,000 listing in Waco Texas that is 3,071 sf and has no views or features. https://www.zillow.com/homedetails/2...68833734_zpid/ Scroll down to the taxes and you will see that their 2021 property taxes were $9,998 on an appraised value of $444,530
And that is for Waco. You want a real world of hurt, look at the tax bills in the Austin area. Here is a $1.3 million dollar listing in the Austin suburbs, so same exact price as the Camas house above and smaller at 3,706 sf https://www.zillow.com/homedetails/1...29363582_zpid/ What were their taxes in 2022? $28,277
Last edited by texasdiver; 01-26-2023 at 07:48 PM..
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