No, @Data10 I just hit the wrong keys on my keyboard because I was trying to watch something on the news while typing! Oops. $14,400 in real estate taxes still seems low for SF. So @gallentjill my typing is wrong, but IIRC the real estate taxes don’t get the huge jump until resale in SF.
As a follow up to the above post, I looked up the tax history (assuming zillow is right) on DS#1 and wife’s SF home. I did recall correctly about the jump happening after resale. The previous owners last paid approx. $5900 in real estate tax in 2015. This year DS paid over $19K!
Taxes vary depending on when you bought the house but are very close to 1% of assessed value. As I said, assuming it was bought for $1.2M (fairly typical for a normal 4/2.5 house in 2010) that means $12K per year tax plus a few minor fees/parcel taxes (~$500 would be usual unless there is something like a sewer district in a more rural area billed with property taxes). Then increasing by 2% pa for 8 years adds another 20%.
Yes, very. And I was comparing to a 1.2 million dollar home. Twoin18 is saying that the home is now worth 2.5 million with that tax burden.
In my county, a $2.5 million dollar home has a property tax bill of around $55K.
I’m guessing, though, considering the comments about how tax appraisals are controlled, that wouldn’t help you if you just bought a 2.5 million dollar house new, vs. owning one that has appreciated to that value over time.
Exactly. Hence people stay put. You can also get around the taxes by remodeling/rebuilding since the increase in what the home is worth usually isn’t fully captured in the newly assessed value, so that can be a significant windfall for those who do it themselves and is still a benefit if you use a contractor.
“In my county, a $2.5 million dollar home has a property tax bill of around $55K.”
Eek. I guesstimate that it would be around $21-23k in my county.
We previously lived in Park City, Utah, where primary residences receive a double tax subsidy: first, any dwelling unit that is (owner or tenant) occupied full time gets a significant tax property break compared to commercial properties or second homes. Second, there are a lot of high value second homes, especially in Deer Valley, whose owners put no strain on the school system but pay taxes at a higher rate than the locals.
As a result, we had the best public schools in the state and the property taxes on our million dollar home were a little under $5000.
I haven’t read the whole thread but I think some of it depends if you were born on third base. My husband I worked really hard to get from the middle class to where we are today.
We live in an area with good schools but my husband and I highly value education. That means $20 to $25 thousand per child per year from K to 12. There were years when we were in the red. Now that my children are working or in grad school I can say that it was well worth it. They were well prepared to breeze through college with high honors and excellent internship opportunities. Now the excess goes to retirement funds and we can retire before 60.
@MaterS “We live in an area with good schools but my husband and I highly value education. That means $20 to $25 thousand per child per year from K to 12.”
Can you explain what you mean here? Are you suggesting that you lived in a public school system that required you to pay an additional 40-50K per year for your kids to attend? If so, that is more than most private schools were I live. I’m confused?
I’m saying that while the public schools are good, if you what the best education for your child you need to pay for private school.
“I’m saying that while the public schools are good, if you what the best education for your child you need to pay for private school.”
Where we live the schools are excellent. You only choose the public for a kid that can’t hack the public schools rigor and competitiveness.
Sadly, while that used to be the case for some of our public schools, now most folks who can afford it take their kids out of public schools and put them in private schools. That adds a lot to the family expenses.
Really? No exceptions? Are there no parents of really awesome students who want their kids to receive a private religious education, or kids who can handle rigor and competitiveness as long as they have a really low teacher to student ratio only found in a private school?
Yeah, I mean, I don’t know, just a feeling. And I’m not even judging–I’m making money no real estate right now, and we all have to do our best to care for our old age and our loved ones. It would be pretty cool, though, if we didn’t have to worry so much about our old age, our health, and the old age and health of the people we love. My parents are getting up there in age, as are my in-laws, but although the latter have less wealth than the former, they live in a country with very robust social welfare systems, and although my parents are (probably) going to be okay, it’s sad to see the US falling so far behind far less wealthy countries in caring for the sick, elderly, disabled, mentally ill, and otherwise unfortunate. There but for the grace of God, &c.
One other thing that makes me uncomfortable about passive investment income is how thoroughly it reinforces pre-existing wealth.
Who’s best able to profit on downturns? The rich–a bad economy is just a sale for people with money.
Who’s best able to weather downturns? The rich–they can simply hold for a better day.
And with the current estate tax laws, you can pass on >$5 million to your kids without any taxation at all in many cases (source: https://www.attorneyoffice.com/pay-taxes-inherit-money/ ), so money keeps siphoning upwards, pooling at the top, with no end in sight.
(Heck, even the most basic laws favor the rich. After all, “punishable by fine” means “legal for rich people.”)
Public or private is a very personal decision for those who have the funds. We chose a town with excellent public schools and pay the property taxes that go with it. My older daughters had a wonderful experience. However, things seem to be changing with the advent of “common core” and some of the rigidity and lack of creativity that go along with it. I have recently been wondering about private school. In order to make it work, though I would have to move somewhere with a far, far less expensive cost of living.
I know, I know. Just being able to have that dilema means I am fortunate and priviledged and rich regardless of what % I fall into. And yes, I am grateful.
Perhaps not that unusual among high earners, but it does look like most of these items involve spending much higher than “need” levels (even in expensive areas, since the yearly total of the above is significantly greater than the median pre-tax household income in San Francisco or San Jose). Obviously, that is personal choice, but let us hope such a household is not complaining about not making ends meet on an income far higher than what most people earn.
I am not @MaterS , but I think I understand, as we have the same mentality. We live in a good school system for our state, but chose to send our kids to private school, so while the district we live in is good, and the house, when we sell, will benefit from being in this school district, we put our kids in private school and have never looked back.
@Nrdsb4 - the tax bill on a $2.5M house is $55k a year??? Whoa!
@marvin100 The article you linked from 2014 is outdated regarding passing on wealth.
$11,180,000 in 2018