NorTracNY
Platinum Member
I'm still baffled by people talking about paying hundreds of $$ in property taxes. I pay about 3.8% of my assessed value each year in property taxes!
Property Taxes
- Thread starter dooleysm
- Start date
- Views: 26375
brin
Super Member
That is horrible...!!!! 3.8% Wow ! By the way I am complaining about paying thousands as well....not hundreds...
Bird
Rest in Peace
You're kidding, right? You may not think you can raise the rent high enough to suit you, but those property taxes are definitely included in the rent charged. And the renter doesn't even get to deduct that expense on his income tax return, as the owner does. The owner is indisputably ahead of the renter. If he wasn't, he'd get rid of that rental property.:laughing:
But as to whether a larger sales tax would be more fair than the property tax . . . I really can't say. You might be right.
MossRoad
Super Moderator
- Joined
- Aug 31, 2001
- Messages
- 67,223
- Location
- South Bend, Indiana (near)
- Tractor
- Power Trac PT425 2001 Model Year
I would be in favor of both a flat federal income tax with no cap and a flat state income tax with no limit. But I would like to see the elimination of local option income taxes and special city taxes. For example:
My wife and I frequent the local McDonald's drive through for lunch several times a week. We get our food and sit by the river and watch the submarine races. :laughing: Anyhow, it was too cold to sit by the river one day, so we went inside to eat. Nice digs. Clean, etc... I order the food and the counter person says dine in or carry out? I say dine in. We get the food and I comment to my wife that the meal cost more than usual. I look at the receipt and there is a dining room tax of 40 something cents! Apparently restaurants in certain areas of our town have to impose it and some do not. I have to find out why. Something to do with tourism, TIF districts, etc... pretty stupid law that you don't get taxed at the drive through for the same food. :confused2:
brin
Super Member
Bird....NO --ABSOLUTELY NOT KIDDING AT ALL ! I have owned rental property for 30 some years now and I am here to tell you that if you are in a competitive rental market there is just no way you can keep tenants and continue to raise the monthly rate to keep pace with the rising property taxes..Believe it or Not !
MossRoad
Super Moderator
- Joined
- Aug 31, 2001
- Messages
- 67,223
- Location
- South Bend, Indiana (near)
- Tractor
- Power Trac PT425 2001 Model Year
Here in South Bend, IN if your house is not appraised that much, you do not pay that much.
Then there is the homestead exemption which knocks off some of the appraised value before taxes.
Then there is the mortgage exemption, which knocks off more.
For example, we have a low interest home equity loan against our house. It is considered a mortgage. We save quit a bit of money each year in property taxes because we have a mortgage that qualifies for the mortgage exemption. The most interest we have ever paid on the loan in a year was about $200. So we save quite a bit of money a year by having a mortgage. :confused2:
MossRoad
Super Moderator
- Joined
- Aug 31, 2001
- Messages
- 67,223
- Location
- South Bend, Indiana (near)
- Tractor
- Power Trac PT425 2001 Model Year
I should add that the system sucks, but it is the system we have, so you have to work the system in your favor. Sounds sleazy, doesn't it? :drool:
Bird
Rest in Peace
Of course we have the homestead exemption, but I never heard of a mortgage exemption, so I don't know what that is.
I can remember the days when almost any "interest" paid on any loan, credit card, etc. was tax deductible, but not for many years now. We, too, have a mortgage, so that interest is tax deductible, if that's what you're talking about.
Bird
Rest in Peace
Those are not taxes; those are user fees.:laughing: That way, the politicians can say they didn't raise taxes.:laughing:
No, Indiana has a separate mortgage exemption. It's not alot, something like $3000, nothing like the homestead exemption, but it helps.
We just paid off our house with a HELOC (lowered our rate from 5.8% to 3.25%) and one of the first things the loan officer told us was to make sure we kept our mortgage exemption, as the HELOC counted for those purposes.
We just paid off our house with a HELOC (lowered our rate from 5.8% to 3.25%) and one of the first things the loan officer told us was to make sure we kept our mortgage exemption, as the HELOC counted for those purposes.
brin
Super Member
Be careful with the HELOC.....
" The Risks of a HELOC
The major disadvantage of the HELOC is its exposure to interest rate risk. All HELOCs are adjustable rate mortgages (ARMs), but they are much riskier than standard ARMs. Changes in the market impact a HELOC very quickly. If the prime rate changes on April 30, the HELOC rate will change effective May 1. An exception is HELOCs that have a guaranteed introductory rate, but these hold for only a few months. Standard ARMs, in contrast, are available with initial fixed-rate periods as long as 10 years.
HELOC rates are tied to the prime rate, which some argue is more stable than the indexes used by standard ARMs. This is an illusion, however, arising from the fact that the prime rate doesn't change from day to day. In 2003, it changed only once, to a low of 4% on June 27. However, in the next three years it changed 17 times, by .25% each time, reaching 8.25% on June 29, 2006. In 1980, it changed 38 times and ranged between 11.25% and 20%.
In addition, most standard ARMs have rate adjustment caps, which limit the size of any rate change. And they have maximum rates 5-6% above the initial rates. HELOCs have no adjustment caps, and the maximum rate is 18% except in North Carolina, where it is 16%. "
We are well aware of the risks. However, at our current rate of repayment, we will be free and clear in 2.5 years. We could pay off faster if we had to. However, we reasonably comfortable that rates will not rise very far in the next couple of years. They certainly won't shoot up overnight.
Dargo
Super Member
- Joined
- Mar 6, 2004
- Messages
- 6,011
- Location
- S. IN
- Tractor
- Jinma, Foton, TYM, Belarus, Yanmar, Branson, Montana, Mahindra and maybe some green and orange too.
I own 4 separate parcels of property in Indiana and the freaking state went nuts this year!! According to the state two of my homes went up in value by 50% in the last year. I'm willing to sell to them at 90% of their "appraised" or assessed value. They are insane! Two parcels of land only more than doubled. Again, NOT what the trend is. We have more property for sale in my county than they ever have since they've been keeping records. The average home is sitting on the market longer than ever as well. I filled out 4 of the 130 forms that you're supposed to fill out to contest the appraisal(s). I'm beyond ticked. There is no justification for this robbery. At least a large parcel of property I own in Pike county only went up about 20%. When I questioned them about it, at least they were honest; they said the county was basically broke and they had to raise money to even afford to prosecute criminals. I didn't contest that parcel's assessed value. I feel I got an honest answer there.
Bird
Rest in Peace
OK, Shawn, so what's a "HELOC"?
Bird
Rest in Peace
300UGUY
Super Member
In Michigan, property taxes cannot go up more than 5% per year, or the rate of inflation, whatever is less. My taxes went down this year, property values are falling pretty bad around here. One other thing, Michigan doesn't tax pensions, so it is a prtty tax friendly state overall.
Dargo
Super Member
- Joined
- Mar 6, 2004
- Messages
- 6,011
- Location
- S. IN
- Tractor
- Jinma, Foton, TYM, Belarus, Yanmar, Branson, Montana, Mahindra and maybe some green and orange too.
Yes, there are some risks just like there are for credit card holders. It's all in how you manage your finances. I've never paid a dime in credit card interest because I simply use credit cards in lieu of carrying around cash. Well, also for the reward points. Every once in a while a company will try to charge me a fee because I never carry a balance. I promptly terminate that card.
The same goes for a HELOC. Since I carry no mortgage on any of my properties, I have a HELOC so I can get the "mortgage deduction" on my property taxes (it's a drop in the bucket, but I'm fed up with being taxed silly). I only have to 'borrow' something once every 15 years to keep the deduction in Indiana. When I bought my son a car I transferred money from the HELOC account (borrowed money from it), until a CD matured later that month. I then paid it off. That was a year or so ago. I have 14 more years to worry about having any sort of balance.
2manyrocks
Super Member
- Joined
- Jul 28, 2007
- Messages
- 9,585
It's nutty that you have to have a mortgage to get a tax exemption.
Sooner or later our local government will fall into the borrow and spend mode to the point where our property taxes are ridiculous, too. Just a matter of time. Need to figure out how to put our property into a charitable trust and then tie it up so it can't be developed.
The HELOC's I see are fully drawn second mortgages behind a first mortgage-those borrowers are sitting ducks for a rise in interest rates.
Sooner or later our local government will fall into the borrow and spend mode to the point where our property taxes are ridiculous, too. Just a matter of time. Need to figure out how to put our property into a charitable trust and then tie it up so it can't be developed.
The HELOC's I see are fully drawn second mortgages behind a first mortgage-those borrowers are sitting ducks for a rise in interest rates.
