which is worse: costlier house vs higher property tax?

[kreactor]

property A property B (bayside, ny)

cost 840k 740k
10yr tax 40k 80k
(not yet accounting tax increases)

does it make sense to buy a more expensive property costing 100k more
than another that has twice the property tax in the same school district/ neighborhood,
all other things being equal (layout, proximity to transportation etc, crime etc)


(i plan to live in this property for at least 10-15 years)

edit: i was also thinking that i might be paying more $ for mortgage but i might get to refinance down the road when the rates drop vs already high property taxes that'll go even higher

 

[Noirish]

i thought property tax rate is the same per either county or state?

 

[spidey07]

more expensive house will appreciate more.

I'll go with the bigger/better house.

 

[chambersc]

other compelling factors go into this decision besides money...

how are the schools/fire/police/crime rate/appreciation of property/area of country/etc

 

[Thorny]

Originally posted by: Noirish
i thought property tax rate is the same per either county or state?

Ditto, my county is the same all over

 

[Slew Foot]

I wouldnt count on rates dropping anytime soon. On the other hand, the theory goes that you should always buy the worst house in the best neghborhood for maximum investment potential. Where are you planning on buying?

 

[thomsbrain]

rates are on their way up and are really freaking low historically (talk to baby boomers with 18% mortgages).

that said, i'd go with the more expensive house regardless.

 

[mugs]

$3k tax/year on a $840k house? Where is this?!

 

[kreactor]

it's in bayside, new york (the wife wants school district 26)

i'm leaning to go w/ the more expensive house because i figure
w/ a 30yr fixed mortgage w/ no prepayment penalty, i can refinance
when and if the rates drop.....vs the 8k i have to give government every
year no matter what.....also i figure even though i'm not really saving (like gathering/compounding in the bank) the 4-5k in taxes from plowing more $ into the mortgage, at least i can write off the mortgage interest (there's no property tax
deduction that i can take for irs afaik) so i probably come out a little ahead...

 

[Amplifier]

hi i am most qualified person to answer your question but saying nothing :shocked:

 

[Baked]

Property tax around here is based on original purchased price of the property. Hooray if you bought the house back in 1976. @#$% @#$%^ if you bought it after 2000.

 

[Thorny]

You might want to double check the taxes. Taxes are based on fair market value of the home and change every time the house is appraised or sold. If the house with the lower tax has been owned by the same people for years and has not been reappraised or adjusted by the township, the tax the current owners pay will be MUCH less than you will pay. You are would be wise to check at the courthouse for the assessed value of the property, its public information.

The house with the highter tax my have just been appraised more recently, which is why the tax is higher. Call the county collectors office and ask for the tax rate of assessed value so you can figure what your taxes will actually be. The numbers you posted don't seem right if your in the same school district, being that they are the major recipient of your taxes.

 

[spidey07]

Originally posted by: kreactor
it's in bayside, new york (the wife wants school district 26)

i'm leaning to go w/ the more expensive house because i figure
w/ a 30yr fixed mortgage w/ no prepayment penalty, i can refinance
when and if the rates drop.....vs the 8k i have to give government every
year no matter what.....also i figure even though i'm not really saving (like gathering/compounding in the bank) the 4-5k in taxes from plowing more $ into the mortgage, at least i can write off the mortgage interest (there's no property tax
deduction that i can take for irs afaik) so i probably come out a little ahead...

You need to run the numbers on your goals. I am not a CPA or financial advisor, but some smart people can do this for you.

Rates ain't dropping my friend. Lock in now at 30 yrs fixed and enjoy the benefits 10 years from now provided you are smart and outpace your interest rate.

But then again, you say you aren't saving/investing so you really aren't outpacing anything. Speak with a planner and have your goals clearly outlined at 5, 10, 15, 20, 30 years.

With returns of 10-15% in the market it's foolish to waste money.