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Thread: How much do you pay in property taxes?

  1. #26
    OH....IO Hink's avatar
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    Quote Originally posted by stroskey View post
    Someone remind me why we pay based on value and not lot size? If you paid based on lot size only wouldn't it encourage more dense development and stop some sprawlish development? (You pay the same in the city or 25 miles out, so which will you choose?)
    Because the wealthy can afford to pay more in taxes... I won't start that argument here because I don't agree with it, but the argument is that if you build something expensive you are able to pay taxes on it.

    Our tax structure does very little to stop sprawl, which is why it has been so successful in the past 50 years. I think you are onto something though with the concept of lot size. Although the income generated from property taxes would go down tremendously. Think about NYC...
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  2. #27
    Cyburbian WSU MUP Student's avatar
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    Also, if property taxes are designed to help pay for services that the local governments and school districts provide, a single-family house on 100 acres out in a township or unincorporated area of a county would likely be use significantly fewer government services than a high density apartment building with 150 households in it (regardless of the value of the apartment building) somewhere in the urban core on less than an acre of land.
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  3. #28
    Cyburbian imaplanner's avatar
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    Quote Originally posted by WSU MUP Student View post
    Also, if property taxes are designed to help pay for services that the local governments and school districts provide, a single-family house on 100 acres out in a township or unincorporated area of a county would likely be use significantly fewer government services than a high density apartment building with 150 households in it (regardless of the value of the apartment building) somewhere in the urban core on less than an acre of land.
    Hink Planner makes a very good point about how our tax structure encourages sprawl. And while your point is valid, it sort of also proves hink planners point.

    My new house in California is about 1000/year in property tax. I'm not sure why it is so low. In Washington my house is about 4000/year in taxes.
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  4. #29
    Cyburbian cng's avatar
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    Quote Originally posted by imaplanner View post
    My new house in California is about 1000/year in property tax. I'm not sure why it is so low. In Washington my house is about 4000/year in taxes.
    1000 a year?? Let's trade. I pay $2800/yr in property tax for my modest house in California... and that's down from $3200 a few years ago, before a reduction in the assessed value.

  5. #30
    Cyburbian Raf's avatar
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    Quote Originally posted by cng View post
    1000 a year?? Let's trade. I pay $2800/yr in property tax for my modest house in California... and that's down from $3200 a few years ago, before a reduction in the assessed value.
    Welcome to prop 13 world. My parents assessed value in property taxes this year is only $1500. Their neighbor's? try almost 2,400. Makes no sense huh?
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  6. #31
    Cyburbian stroskey's avatar
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    Quote Originally posted by WSU MUP Student View post
    Also, if property taxes are designed to help pay for services that the local governments and school districts provide, a single-family house on 100 acres out in a township or unincorporated area of a county would likely be use significantly fewer government services than a high density apartment building with 150 households in it (regardless of the value of the apartment building) somewhere in the urban core on less than an acre of land.
    Good point. But that's also helps point of my tax-based-on-size theory... if you can afford to pay that much then you will. If that one house doesn't use more services than why does a $300,000 house with no children "use more services" (paid through taxes) than a $150,000 house with 3 children? Surely it doesn't cost the PD or FD more to "patrol" the property and increased utility costs are a personal bill, so what is the actual justification for charging more? There is none. If you own land you should pay the government a property tax. It would seem logical that the more you own the more you pay. And having a nicer house does not equal owning more land.

    Say each resident uses Z dollars in services, be it school, police, roads, etc. If your previously-mentioned 150 residents on 100 acres cost 150Z, they each pay 6.5% of the total cost. 1 resident on that same hundred acres has to pay the same tax rate, so he has to pay 100%. When you are looking to buy a house or build a development, what is more attractive to middle-class buyers - paying 100% of the taxes or paying 6.5% of the taxes?

    If the property tax is $5,000/acre, than 100 acres would cost $50,000 per year. One house = $50,000 in taxes and your 150 houses = $3,334 in taxes. If you can afford that, I envy you. If you can't afford that then you will build closer in where costs are more spread out.
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  7. #32
    Cyburbian cng's avatar
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    Quote Originally posted by stroskey View post
    Good point. But that's also helps point of my tax-based-on-size theory... if you can afford to pay that much then you will. If that one house doesn't use more services than why does a $300,000 house with no children "use more services" (paid through taxes) than a $150,000 house with 3 children? Surely it doesn't cost the PD or FD more to "patrol" the property and increased utility costs are a personal bill, so what is the actual justification for charging more? There is none. If you own land you should pay the government a property tax. It would seem logical that the more you own the more you pay. And having a nicer house does not equal owning more land.

    Say each resident uses Z dollars in services, be it school, police, roads, etc. If your previously-mentioned 150 residents on 100 acres cost 150Z, they each pay 6.5% of the total cost. 1 resident on that same hundred acres has to pay the same tax rate, so he has to pay 100%. When you are looking to buy a house or build a development, what is more attractive to middle-class buyers - paying 100% of the taxes or paying 6.5% of the taxes?

    If the property tax is $5,000/acre, than 100 acres would cost $50,000 per year. One house = $50,000 in taxes and your 150 houses = $3,334 in taxes. If you can afford that, I envy you. If you can't afford that then you will build closer in where costs are more spread out.
    This is similar to something my city tried many years ago--except with development fees. We had what we called an "urban structure fee" as part of development impact fees that is based on the project's distance from the city's urban core, and from fire and police services. Basically, the further you are away, the more you pay in impact fees. It was a fiscal way to control leapfrogging developments and sprawl. Some questioned the legality of this fee. But also, I have yet to see the effectiveness and intended results from the implementation of this program.

    There are ways to "punish" builders and users of sprawl developments... but I think a better approach would be incentivize infill development. It's still important to provide a variety of housing options, and not create a unfair burden for those who choose a more rural lifestyle, but I do agree that each household should pay their fair share contribution to municipal services, in accordance with their usage.

  8. #33
    Cyburbian WSU MUP Student's avatar
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    Quote Originally posted by stroskey View post
    Good point. But that's also helps point of my tax-based-on-size theory... if you can afford to pay that much then you will. If that one house doesn't use more services than why does a $300,000 house with no children "use more services" (paid through taxes) than a $150,000 house with 3 children? Surely it doesn't cost the PD or FD more to "patrol" the property and increased utility costs are a personal bill, so what is the actual justification for charging more? There is none. If you own land you should pay the government a property tax. It would seem logical that the more you own the more you pay. And having a nicer house does not equal owning more land.
    I agree that having a nicer house does not mean having more land, more services, or more taxes. Let's leave the value of the house and the number of residents out of the equation and focus solely on the size of the property and the density of the development and stipulate that all developed residential units are "filled".

    In the Kingdom of Stroskey, property is taxed at the rate of $1,000 per year per acre and there are a total of 20 acres (it's a relatively young kingdom but they are not opposed to seizing the lands in the Grand Duchy of WSU at a later time). The wise and benevolent King Stroskey has divided his kingdom into two 10 acre parcels, Parcel A and Parcel B. Parcel A has one house on it and subsequently, the owner pays $1,000 in 2010 to fill King Stroskey's coffers which would be used to pay for the paving of the roads, sewer/water services, police and fire protection, etc. Parcel B however has been subdivided into 10 equal sized parcels and each homeowner will pay King Stroskey $100 in 2010 bringing total treasury reserves to $2,000.

    However, without increasing the size of the actual property or revenue, the services demanded will indeed go up disproportionately. The same water/sewer line that was adequate to serve one household on 10 acres is not likely to be adequate for 10 households on 10 acres because as more hookups are added to it pressure will drop or more people flushing their toilets are going to send more waste back to be treated.

    Fire protection for one home on 10 acres is a different beast than the more dense 10 homes on 10 acres where there is more of a concern of fire spreading from home to home (maybe not so much on 1 acre lots but how about 4 or 5 houses per acre?). The same holds true for police services - it is pretty easy to patrol the area in the Kingdom of Stroskey in Parcel A but the without adding additional patrolmen, the homes in Parcel B would suffer because the patrol would have to be concerned with additional buildings to patrol around.

    If all of the units are filled, there will be a disproportionate demand for school services because of more households in Parcel B. If additional schools are built, you will actually be depleting your tax base by taking previously taxable land and turning it into schools. As the development gets more and more dense, more and more land will need to be removed from the taxable base for other schools, roads, right-of-ways, public buildings, etc.


    Quote Originally posted by stroskey View post
    Say each resident uses Z dollars in services, be it school, police, roads, etc. If your previously-mentioned 150 residents on 100 acres cost 150Z, they each pay 6.5% of the total cost. 1 resident on that same hundred acres has to pay the same tax rate, so he has to pay 100%. When you are looking to buy a house or build a development, what is more attractive to middle-class buyers - paying 100% of the taxes or paying 6.5% of the taxes?

    If the property tax is $5,000/acre, than 100 acres would cost $50,000 per year. One house = $50,000 in taxes and your 150 houses = $3,334 in taxes. If you can afford that, I envy you. If you can't afford that then you will build closer in where costs are more spread out.

    Unfortunately residents and property owners don't use services at an equal rate and the density at which property is developed, as shown above, does indeed factor into the equation. In your scenario, the homeowner paying $50k in taxes per year for 100 acres would help subsidize the 150 homes on the same size piece of land. But what happens if the resident paying that $50k gets tired and subdivides his property up to 150 smaller lots? Again, you will be adding new homes and demand to the system without adding revenue to pay for it. The level of services provided will have to be decreased or the tax rate will have to increase. Unfortunately, for some things like fire protection, public health or schools the theory of economies of scale doesn't hold true like it does for manufacturing widgets.

    I'm not saying that our current system is perfect but to tax solely based on the size of the parcel doesn't take into account that the population can increase but your geographies tax base cannot.

    In the end, the property tax system as it is currently already does account for the size of the parcel in a round-about, but unavoidable way in that the size of the parcel will get factored into the price when a property is sold and resold and then when the property is assessed for tax purposes. Since I have never heard of a smaller parcel of land being worth more than a larger parcel (ceteris paribus again) the larger parcel will be sold for more and the owner will therefore pay more in taxes.
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  9. #34
    Cyburbian stroskey's avatar
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    I like your story but would like to mention this:

    In the kingdom of Stroskey, taxes would not be set at 1K per acre. They would be set at a rate higher than what the maximum density needs, with annual adjustment for inflation, etc. So let's say they are 5K per acre (which leaves enough so they don't have to borrow money for capital projects). Parcel A has 10 acres so he pays 50K, and Parcel B is now 10 houses, so they each pay 5k, for a total of 50K. Much like traditional zoning, there are maximum densities - clever formulas that have determined the average total cost of such density on the system and sets the taxes just above that rate.

    In reality, an apt building with 1000 residents is worth 20 million. Michael Jordan has a 20 million dollar house. In your example you say it's unfair because Parcel A is subsidizing Parcel B. I've explained why that wouldn't happen, but this already happens in real life, so it's not a unique criticism of my example.
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  10. #35
    Cyburbian TexanOkie's avatar
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    I'm not sure what the breakdown is from my rent, but I know my dad pays somewhere around $7K/year for a 2800 sq. ft. home on a 0.5-acre lot in the Dallas-Fort Worth area. I've been told by almost everyone I've discussed the issue with that property taxes in Texas are abnormally high. Perhaps it's to make up for a lack of state and local income taxes? I don't actually know... I'd be curious to see what the Texan Cyburbians say. Perhaps my dad's bill is due to the specific city he lives in.

  11. #36
    Cyburbian WSU MUP Student's avatar
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    I guess in the end, IMO it comes down to the fact that if you are taxing on the size of the property, you are taxing based on a finite resource therefore your tax base can never grow regardless of how much development or how many people you can squeeze on to it.

    Whereas, if you tax based on the value of the property, as the value grows your tax base can grow which would allow for your revenues to increase without having to raise the rate at which you are taxing.
    "Where free unions and collective bargaining are forbidden, freedom is lost." - 1980 Republican presidential candidate Ronald Reagan

  12. #37
    Cyburbian otterpop's avatar
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    I pay about $1,900/yr in property taxes on a 10,500 sq ft city lot and a 1,700 sq ft house. I found out recently that my county and city collects the most in mils for education in the state. I would feel better about that if my son didn't have to wait his turn with the shared textbooks in his class.

    Guess I am old school, but I think each student should have the textbooks used in his grade.


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  13. #38
    Cyburbian Linda_D's avatar
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    Quote Originally posted by WSU MUP Student View post
    I guess in the end, IMO it comes down to the fact that if you are taxing on the size of the property, you are taxing based on a finite resource therefore your tax base can never grow regardless of how much development or how many people you can squeeze on to it.

    Whereas, if you tax based on the value of the property, as the value grows your tax base can grow which would allow for your revenues to increase without having to raise the rate at which you are taxing.
    Then there's the issue of the 10 acres of swamp 10 miles from the nearest paved road and 10 acres of flat, buildable land at the highway interchange.

  14. #39
    Super Moderator kjel's avatar
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    $0 as I am a renter but it does trickle down to the rent I pay.

    The apartment complex I live in has 1009 units and is assessed at $22.22 million and has an annual tax bill of $1.36 million. I rent a 1 bedroom, 1 bathroom apartment for $1045 per month. If divided on a per unit basis without taking unit size into account the tax per unit is $1347 per year. Although I am a renter we do get a break on state taxes for rent paid as long as you don't live in publicly owned property (city, county, state).

    Average single family home value is around $325K with an annual tax bill of about $7500.
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  15. #40
    Cyburbian Linda_D's avatar
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    I pay about $ 2400 in taxes, primarily school tax, on my house, which is about 1400 square feet, 2+ BR, 1 BA with 2 car garage in a desirable city neighborhood.

    My electric, water, sewer, and garbage are around $70 monthly in the summer and about $100 monthly in the winter when I heat the sunroom with electric. My gas bill would be $78 monthly on balanced billing, but I just pay my bills as I get them. The highest gas bill I've had has been < $250 even in the coldest months.

  16. #41
    Cyburbian ThePinkPlanner's avatar
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    $3900/year on 250k of assessed value. Thats down from the $4500 on 200k in assessed value on my previous home, only one town over. More than 80% of that is to education. In VT, wealthier towns subsidize education for towns with a lesser tax base. I live in a "giving" town. I have seen the same assessed value in a town with a lesser tax base and thus a "receiving town" as low as half of what I pay.

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