Tax Foundations - Taxes on Owner Occupied Housing

The Tax foundation , whom I don't necessarily agree with but they have many points to make which are reasonable just posted a page with information about property tax rates on owner occupied Housing.

http://www.taxfoundation.org/taxdata/show/1888.html



Often times users complain that their "effictive property tax" rates are higher than what the American Community Reports. This makes a difference and I'll tell you in a bit.

A high property tax can reduce a homeowners equity in their home, suppose
you have a house that is worth

300,000k and in 20 years its worth 450k with inflation of 50%, its worth the same (assuming no housing bubble or economic recession/depression)

the property taxes will stay the same adjusted for inflation, this 2% of market value.

Thus - in property taxes ALONE - 90k of the value is lost 300-90k=210k.

Negative equity, my friend.

Keep in mind that this is only for owner occupied housing not commerical and California's prop 13 distorts the figures for its state because while new homeowners may be 1% of market value , existing homeowners may pay 0.1% on the same block , same type of property.

More on that later, you'll see how old grandpa and his descendates may pay $400 a year in taxes while a person with an indentical home across the bl0ck pays $4000 a year. Stupidy of Prop 13.