That's not so...
awpitt said:
, is that property taxes are a very regressive form of taxation. Unlike income taxes, property taxes tax you on something that hasn’t derived any monetary value during the taxing period. It’s different when you sell a house and derive an actual profit but when you’re living in the house that’s different.
...your home is appreciating as you live in it, just like money in the bank is earning interest. You're not spending it but the value is growing.
If you live in an incorporated area that has official local government that does things; pave roads, push snow, pass ordinances to attract business or schools or new housing development, shopping so on and so forth, that stuff costs money and does benefit you even if your house is paid off, like money in the bank earning interest.
Property taxes are a reasonable solution to funding the growth. We can't all have our way. Just because one votes against a local government expenditure or growth plan doesn't exempt one from having to help pay for it. You can move.
I'm not unsympathetic to the plight of people who are retired and on a fixed income being hurt by exploding property taxes, but they are part of a community and I don't see a violation of their rights given local communities choices to fund local government.
Moving sucks at 25. It's a nightmare at 65-85. I wonder why someone who has a house long paid off that is now worth some, say, $500,000 when they bought it for $20,000 back in 1960, why don't they borrow against the house?
Say you're 65 and don't wanna move. Say your prop taxes are 1% or $5,000 a year and you figure to stay/be alive another 20. So, you borrow $100,000 against your home. The new mortgage is only $800 a month, 15 year, or so or $9,600 a year plus your property taxes of $5k so about $15,000 a year our of your $100,000. That gives you about 7 years if you assume no increase in taxes AND that the money is not earning anything as you use it up.
Taxes will go up but you will earn something on that money so, maybe that's close to a rub? Point is that after 7 years or so, you do it again. In the mean time, your $500,000 house might now be worth $600,000, so, in that way, you're not losing ground. Plus you were paying down the note anyway.