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Property tax in the US

rocks

Brilliant_Rock
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Thanks guys! The person told me they paid $40,000 in property taxes which shocked me!
Welcome to ny and .nj. That is our reality. The taxes are allocated 2/3 for schools and the balance for local municipality costs. Where we live the per student expense is $22 to 25k for public schools. We are not getting any value for our money.
 

msop04

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Property tax varies significantly throughout the US. Even within each state, different property taxes can be imposed (city, local taxes, etc). Our tax system is very complicated, so there is no simple explanation. Property taxes are dependent on where the property is located. But as @missy noted, generally property taxes are higher in larger cities with more infrastructure vs. suburbs vs. rural.
This is right... it really depends on where you live (not just state, but county). We are fortunate to live in a county that has the lowest property taxes in the country.
 
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StephanieLynn

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I believe @pearlsngems and I live in the same state which is one of if not the highest taxed state in the U.S.

They tax everything they can including some foods at the grocery store, it is insane! We pay property tax on our house and car, thankfully a small house and 13 year old car so that helps a bit.
 

Asscherhalo_lover

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It's very high where I live, and mostly funds our public schools and police force (we have an Incorporated village). The house I rent (half a two-family house) was built in 1915, is only 1500sqf total, the lot is 40x100, valued at maybe 420k, and the taxes are about 14k per year. The rent we pay with the other renter upstairs basically covers the taxes, utilities, and basic maintenance. The owners have owned it for decades so we're basically just carrying it for them. If we were looking to buy where we rent a mortgage would be more than double what we pay in rent plus utilities. We will rent as long as it "makes sense" for us.
 

msop04

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I believe @pearlsngems and I live in the same state which is one of if not the highest taxed state in the U.S.

They tax everything they can including some foods at the grocery store, it is insane! We pay property tax on our house and car, thankfully a small house and 13 year old car so that helps a bit.
Wait. It's not the norm to pay taxes on food?? We pay taxes on EVERYTHING WE BUY here (the South). Every single thing has sales tax, of which ours is among the highest in the country at 10%.
 
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MollyMalone

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Here's an easy to read, state-by-state roster -- compiled last year -- of the median home property tax paid in 2017 (the most recent year for which particularized US Census Bureau data was available) on a home of "median home price" in that state. You'll that New Jersey's median property tax payment of $7840, as per those calculations, was the highest:

What neither this table nor the USA Today article that @Karl_K linked makes clear is whether the stated median home price was based on an amalgamation of residential properties sold during the year, or assessed value as determined by the local property tax authorities; the assessed value is what's used to calculate the property taxes due.. My NYC condo is assessed by the City at appreciably below its current market value and that's also true for my brother and sister-in-law's house in Ohio. But I imagine these are aberrations generally speaking.

Of course, statewide median rates & median taxes paid don't tell the whole story since taxes vary widely within each state. And what they cover isn't uniform either, e.g., in some localities, property taxes also cover your water and/or garbage pick-ups, but elsewhere you're billed separately for those residential services.

Only about 1/10 of 1% of estates attributable to those who die in 2020 will pay federal estate tax because the tax only comes into play if the taxable estate is more than $11.58 million. And with some notable exceptions (e.g., Aretha Franklin who died without even a will in place), people with that kind of wealth implemented estate tax-reducing strategies before they died.

A farm will not be the primary or even a major asset in all but virtually a handful of estates subject to the 2020 estate tax (that's been true for some time). And there are some special exemptions and estate tax relief provisions for those in that tiny minority. Can you tell I'm the daughter of a Midwestern trusts and estates lawyer ;))
 

Karl_K

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Talking about farms it was on the news the other day that 80%+ of the farms in my county have disappeared in the last 20 years.
The gist of the story was that farmers are going under.
The truth is the vast majority sold out to developers or big factory farms and retired to Florida or their kids inherited then sold them.
 

missy

Super_Ideal_Rock
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Talking about farms it was on the news the other day that 80%+ of the farms in my county have disappeared in the last 20 years.
The gist of the story was that farmers are going under.
The truth is the vast majority sold out to developers or big factory farms and retired to Florida or their kids inherited then sold them.
:(
 

rocks

Brilliant_Rock
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Here's an easy to read, state-by-state roster -- compiled last year -- of the median home property tax paid in 2017 (the most recent year for which particularized US Census Bureau data was available) on a home of "median home price" in that state. You'll that New Jersey's median property tax payment of $7840, as per those calculations, was the highest:

What neither this table nor the USA Today article that @Karl_K linked makes clear is whether the stated median home price was based on an amalgamation of residential properties sold during the year, or assessed value as determined by the local property tax authorities; the assessed value is what's used to calculate the property taxes due.. My NYC condo is assessed by the City at appreciably below its current market value and that's also true for my brother and sister-in-law's house in Ohio. But I imagine these are aberrations generally speaking.

Of course, statewide median rates & median taxes paid don't tell the whole story since taxes vary widely within each state. And what they cover isn't uniform either, e.g., in some localities, property taxes also cover your water and/or garbage pick-ups, but elsewhere you're billed separately for those residential services.

Only about 1/10 of 1% of estates attributable to those who die in 2020 will pay federal estate tax because the tax only comes into play if the taxable estate is more than $11.58 million. And with some notable exceptions (e.g., Aretha Franklin who died without even a will in place), people with that kind of wealth implemented estate tax-reducing strategies before they died.

A farm will not be the primary or even a major asset in all but virtually a handful of estates subject to the 2020 estate tax (that's been true for some time). And there are some special exemptions and estate tax relief provisions for those in that tiny minority. Can you tell I'm the daughter of a Midwestern trusts and estates lawyer ;))
@MollyMalone....taxes on coops and condos in nyc are not taxed as residential 1 to 3 family dwellings. We are taxed as though we resided in rental units, so the taxes are more in line with commercial real estate.....we are taxed at a multiple of what 1 to 3 family units of similar value would be taxed at. I’m told that when buildings started to convert from residential rentals to coops, the city still wanted the same tax on the properties, so it was agreed that the tax basis would not change to reflect individual ownership. It has been in litigation for years, and the city refuses to allow the case to go to trial.

The farm situation is horrific. Families on Long Island simply cannot keep their farms because the developed value has skyrocketed. I believe their inheritance taxes are based on what the land could be used for.....
 

StephanieLynn

Ideal_Rock
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Wait. It's not the norm to pay taxes on food?? We pay taxes on EVERYTHING WE BUY here (the South). Every single thing has sales tax, of which ours is among the highest in the country at 10%.
Sorry I was referring to groceries, do you pay tax on groceries? Here they imposed a new tax where if you buy a bagel from the grocery store it's taxed but six bagels are not. They consider a single bagel a convenience food, there is a whole list of foods from the grocers that were never taxed before but they are now.
 

Alex T

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One school district in one of the very high tax areas redid the bathrooms in one of the high school over the summer.
The spent over $1 million dollars over the cost of chrome plated facets for 18k gold plated models.
In high school bathrooms!
That is just shockingly indulgent & unnecessary. And will the school children appreciate it & look after it? Nope. They'll be graffiti there at some point, I expect!
 

asscherisme

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That is just shockingly indulgent & unnecessary. And will the school children appreciate it & look after it? Nope. They'll be graffiti there at some point, I expect!
Agree, that is shocking and such a tremendous waste of money. I have two kids in high school now and if my school district tried to spend money so frivolously I would be vocal about it and would have no trouble rounding up my friends who also have kids in the school.
 

Loves Vintage

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@mellowyellowgirl - Realtor.com is superfun to look at real estate for sale in the US.

Here's a house for sale in Greenwich, Connecticut. Taxes are 96k per year! This is not the norm for your average home in Connecticut, but such places do exist!


Here's a random house for sale in Denver, Colorado. Taxes are $6400/year. Which seems super inexpensive to me for a $1.5m home.


Another Denver home, taxes are only $2300. I live in CT, my house is valued at less than this house, but my taxes are over $10k.

 

Alex T

Ideal_Rock
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Well this has blown my mind. I am reading these tax quotations out to my husband & his jaw literally gets further to the floor. He is Googling as I speak in disbelief.

I just cannot fathom how these high property tax figures are reached & justified, other than greedy council fat cats (who probably claim their own taxes on expenses) living the dream.....

And are paid YEARLY???!!! :-o

Y'all should move over to England & save your pennies!
 

Bron357

Ideal_Rock
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Wow, that’s an eye opener for an Aussie?
We only pay land tax, so it’s not on the whole value of your property. It’s levied against the total land value of all and any properties you own. On say $1,000,000 it is about $4,300 pa.
We don’t pay any taxes upon inheritance on the primary residence of the deceased but investment property and other investments are subject to Capital Gains tax. That’s basically half the value of “the profit” since acquisition until death and its half that $$$ amount at marginal tax rates. The estate pays any taxes owing before distribution to beneficiaries. our highest marginal tax rate is 45% Plus 2% medicare levy.
any non primary residences owned (and all other types of investments) are likewise subject to Capital Gains tax when you sell them. Again, half the profit amount at your marginal tax rate.
on top of any land tax the state government might levy, all home owners pay Council rates, ours are about $2,500 a year.
The other tax we pay is Goods and Sevices Tax. That’s a 10% tax on basically everything.
I think our income tax rates are higher than most places. Our top rate is 45% plus 2% Medicare. We have tax deductions but nothing related to your primary residence or a privately owned car has any tax deductions. Deductions are basically only for reimbursement on certain costs you incurred in earning your income. If you’re employed by a major company you basically don’t get any deductions. If you own a business or run a company, you get more deductions.
 

msop04

Ideal_Rock
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Sorry I was referring to groceries, do you pay tax on groceries? Here they imposed a new tax where if you buy a bagel from the grocery store it's taxed but six bagels are not. They consider a single bagel a convenience food, there is a whole list of foods from the grocers that were never taxed before but they are now.
That sounds crazy... but, yeah, we're taxed on everything, regardless of quantity, size, or description.

ETA: ...and this is not limited to groceries. Any item purchased is subject to whatever the sales tax is in that county.

Besides... what if six bagels is my convenience food?? ;-)
 
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Snowdrop13

Brilliant_Rock
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Well this has blown my mind. I am reading these tax quotations out to my husband & his jaw literally gets further to the floor. He is Googling as I speak in disbelief.

I just cannot fathom how these high property tax figures are reached & justified, other than greedy council fat cats (who probably claim their own taxes on expenses) living the dream.....

And are paid YEARLY???!!! :-o

Y'all should move over to England & save your pennies!
I don’t know about your part of the UK but most of the councils round us have been making huge cuts to services because there isn’t enough money. I’m pretty sure that at some point funding will have to be found from somewhere and the council tax thresholds/bands haven’t been updated for years......
 

bludiva

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Thanks guys! The person told me they paid $40,000 in property taxes which shocked me!
it differs by jurisdiction but can get very pricey. where I live it's close to 3% of the assessed value of the home (as determined by the county) each year so you have people who can't afford to stay in their homes if it's appreciated over decades or values shot up quickly because the taxes become onerous.
 

rocks

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I don’t know about your part of the UK but most of the councils round us have been making huge cuts to services because there isn’t enough money. I’m pretty sure that at some point funding will have to be found from somewhere and the council tax thresholds/bands haven’t been updated for years......
In ny under Cuomo (ny state) and deblasio (nyc) they rarely cut services. They just raise taxes. Our real estate taxes go up about 8% a year in the city. Sales tax is 8.875% (combined state and local tax). The only thing that is excluded from sales tax is groceries. Prepared and convenience foods are taxed. On top of that we have significant state and local income taxes and a local payroll tax for transportation. It never ends. We just suck it up....for now.
 

mellowyellowgirl

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Thanks guys! I'm flabbergasted!

I cannot believe that a bathroom renovation etc can increase your taxes. That's just...I have no words!
 

rocks

Brilliant_Rock
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Thanks guys! I'm flabbergasted!

I cannot believe that a bathroom renovation etc can increase your taxes. That's just...I have no words!
My brother’s town surveys homeowners to see whether they have added a bathroom or renovated anything that can’t be seen from outside. Everyone avoids getting permits unless absolutely necessary. His taxes for a nice, but nothing special house are $39k...and that is a after grieving/disputing his taxes for years. Just nuts.
 

Polabowla

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Where I live property taxes are insanely high & the schools are very poorly rated. (like a 2 or 3)
So idk where my taxes are going, but not to the schools!
 
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mellowyellowgirl

Ideal_Rock
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My brother’s town surveys homeowners to see whether they have added a bathroom or renovated anything that can’t be seen from outside. Everyone avoids getting permits unless absolutely necessary. His taxes for a nice, but nothing special house are $39k...and that is a after grieving/disputing his taxes for years. Just nuts.
Is that just one year Rocks???

I'm..... Maybe we'll stop whinging about property prices in Australia now :lol:
 

MollyMalone

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Talking about farms it was on the news the other day that 80%+ of the farms in my county have disappeared in the last 20 years.
The gist of the story was that farmers are going under.
The truth is the vast majority sold out to developers or big factory farms and retired to Florida or their kids inherited then sold them.
Farming is a very demanding life (and those mega-factory farms that have developed in recent years make it even harder). My great-aunt and uncle were dairy farmers who kept the farm until my great-aunt died & my great-uncle sold the farm at a good price to an Amish family, who's still operating the farm.

I really hate to see pastureland and crop acreage paved over for an industrial park or residential development . But neither my brother nor I nor our cousins were eager to take on my relatives' farm, so I understand why an aging farm couple -- or their inheriting offspring -- would cash out. The cost of long-term health care, and Medicaid's qualifications plus the Medicaid Estate Recovery Program, also drive at least some aging farmers to sell before their death.

Since 1997, there's been a "special use valuation" federal estate tax provision whereby a deceased farmer's or rancher's agricultural land is evaluated as agricultural property -- if the heirs are family members -- not at what it would be worth if it were sold for development. Those same kinds of heirs also are given 15 years to pay estate taxes; don't even have to pay interest in the first 4 years. But if they abandon farming, then they have to pay up, so to speak. And there is a cap on the special use valuation, indexed to inflation, on the reduction allowed; for 2020, it's $1,118,000. So yeah, Congress should give consideration to upping that, with certain provisos.

@rocks - I don't know if you have any interest in donating to a farmland/agricultural preservation trust, but the Peconic Land Trust on Long Island seems to enjoy a good reputation.
https://peconiclandtrust.org/

Nationwide directory here:
 

rocks

Brilliant_Rock
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Farming is a very demanding life (and those mega-factory farms that have developed in recent years make it even harder). My great-aunt and uncle were dairy farmers who kept the farm until my great-aunt died & my great-uncle sold the farm at a good price to an Amish family, who's still operating the farm.

I really hate to see pastureland and crop acreage paved over for an industrial park or residential development . But neither my brother nor I nor our cousins were eager to take on my relatives' farm, so I understand why an aging farm couple -- or their inheriting offspring -- would cash out. The cost of long-term health care, and Medicaid's qualifications plus the Medicaid Estate Recovery Program, also drive at least some aging farmers to sell before their death.

Since 1997, there's been a "special use valuation" federal estate tax provision whereby a deceased farmer's or rancher's agricultural land is evaluated as agricultural property -- if the heirs are family members -- not at what it would be worth if it were sold for development. Those same kinds of heirs also are given 15 years to pay estate taxes; don't even have to pay interest in the first 4 years. But if they abandon farming, then they have to pay up, so to speak. And there is a cap on the special use valuation, indexed to inflation, on the reduction allowed; for 2020, it's $1,118,000. So yeah, Congress should give consideration to upping that, with certain provisos.

@rocks - I don't know if you have any interest in donating to a farmland/agricultural preservation trust, but the Peconic Land Trust on Long Island seems to enjoy a good reputation.
https://peconiclandtrust.org/

Nationwide directory here:
Farming is a very demanding life (and those mega-factory farms that have developed in recent years make it even harder). My great-aunt and uncle were dairy farmers who kept the farm until my great-aunt died & my great-uncle sold the farm at a good price to an Amish family, who's still operating the farm.

I really hate to see pastureland and crop acreage paved over for an industrial park or residential development . But neither my brother nor I nor our cousins were eager to take on my relatives' farm, so I understand why an aging farm couple -- or their inheriting offspring -- would cash out. The cost of long-term health care, and Medicaid's qualifications plus the Medicaid Estate Recovery Program, also drive at least some aging farmers to sell before their death.

Since 1997, there's been a "special use valuation" federal estate tax provision whereby a deceased farmer's or rancher's agricultural land is evaluated as agricultural property -- if the heirs are family members -- not at what it would be worth if it were sold for development. Those same kinds of heirs also are given 15 years to pay estate taxes; don't even have to pay interest in the first 4 years. But if they abandon farming, then they have to pay up, so to speak. And there is a cap on the special use valuation, indexed to inflation, on the reduction allowed; for 2020, it's $1,118,000. So yeah, Congress should give consideration to upping that, with certain provisos.

@rocks - I don't know if you have any interest in donating to a farmland/agricultural preservation trust, but the Peconic Land Trust on Long Island seems to enjoy a good reputation.
https://peconiclandtrust.org/

Nationwide directory here:


We have a home within that geography, so I am familiar with the trust. A worthwhile organization.....though I have to say we have a lot of crazy out east.
 

MollyMalone

Ideal_Rock
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We have a home within that geography, so I am familiar with the trust. A worthwhile organization.....though I have to say we have a lot of crazy out east.
:lol: I have friends out on the North Fork who would agree!

I've realized I previously neglected to thank you for your tactful reminder about the difference in tax rates, so thanks!

Did you know the City posts spreadsheets so you can see what rental apartment building(s) they've deemed comparable to your co-op/condo; I wouldn't have guessed the rental bldg the City most recently decided is the comparable for my condo building.
 

Alex T

Ideal_Rock
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I don’t know about your part of the UK but most of the councils round us have been making huge cuts to services because there isn’t enough money. I’m pretty sure that at some point funding will have to be found from somewhere and the council tax thresholds/bands haven’t been updated for years......
Yes, you're right. Although our council tax has been increasing each year since we moved here almost 14 years ago. But some cut backs have been really beneficial, such as all the grass verges in the villages & the nearest town were planted with wild flower seeds a few years ago & now they don't get mowed until late into Autumn, which I find a very beautiful double win.
 
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