Property Taxes -- Rocket Mortgage -- The US: The Greatest Country In The World -- July 8, 2023

July 14, 2023: Everything for TEXAS needs to be updated with this new development. 

The TEXAS package puts $12.6 billion of the state’s historic budget surplus toward making cuts to school taxes for all property owners, dropping property taxes an average of more than 40% for some 5.7 million Texas homeowners, and offering brand-new tax savings for smaller businesses and other commercial and non-homesteaded properties. The voters would need to approve the package in November for the cuts to take effect this year.

Using the table below: at a 40% cut --

• the TEXAS real estate tax would go to 1.08% -- #30 on the list below, and about par with that of North Dakota;
• the TEXAS average of $3,907 would go to an average of $2,344 -- again, about par with that of North Dakota.

North Dakota has also just passed new legislation cutting taxes. Link here.

• North Dakota's $500 credit = $40 / month savings.
• at the current $2,138 for North Dakota, a credit of $500 drops that to $1,638 to #15 between Tennessee and California.
  

Original Post

Link here.

Comments:

• top to bottom, removing the first two, which were obviously outliers; and the last one, also an outlier;
• range:  $1,113 - $4,942
• a difference of $3,829 = $319 / month (coffee and parking in the big city on a daily basis)
• the folks in the highest-property-tax states need to forgo Starbucks and start taking public transportation, start carpooling, or ask for free parking from their employer.
  
• three groupings
  
• 23 states: $1,000 - $2,000
• 11 states: $2,001 - $3,000
• 14 states: $3,001 - $5,000

In the fourteen "high-property states," there are two outliers, Nebraska ($3,754) and Texas ($3,907)

• $3,907 / 12 = $325 (compare to the low-property tax states, average, $319
• OMG: Texas -- $325 / month vs $319 / month in the low-property tax states

In the low-property tax states, there are three definite outliers:

• DC ($1,221)
• Delaware ($1,240)
• California ($1,644)
• throw out DC and Delaware, and we're left with California
• we have to eliminate California, also, due to property taxes being artificially low due to Proposition 13, perhaps one of the worst tax laws to befall any state.

Back to Texas: one can also argue we need to throw out Texas due to artificially low house prices reported by Rocket Mortgage because of the really, really low how prices in almost all of Texas, outside the five major urban areas, and especially, along the Mexican border, and out west (except in oil country -- Odessa, Midland).

But that brings me to my second argument with regard to this discussion regarding property taxes.

****************
Other Links

At this link, add the property tax paid and the income tax paid in dollars.

*******************
Three Arguments

1. People have no idea what they pay in property taxes; they know exactly how much they pay in state incomes.

2. People buy the house they can afford; property taxes are just part of the mortgage payment.

3. People can cut their state income tax by reducing their income; folks can cut their property taxes by moving into an abode which has lower property taxes (dollars, not rate).

***************
Other Comments

1. The difference in annual property taxes on a monthly basis is almost inconsequential among all states.

2. Property taxes are quietly paid on a monthly basis -- folks are completely unaware.

3. Whether enough state income taxes are withheld or not, state income taxees must be filed at which time one sees immediately how much one is paying in state income taxes. 

4. Most folks paying property taxes consider that a small fee / tax for the privilege of owning one's own home.

5. Majority of folks paying state income tax seeing no value added considering ten states do not have state income tax, and that as many as 50% of residents in a state don't pay taxes in the first event.