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Old 02-23-2010, 04:11 PM   #61
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It is 8%, but that is 8% simple! Not Compound, so it is not as bad as you would think. It still amounts to who is going to spend your money, you or your kids.
8% is pretty high to me. I thought it was better than that.
Seems to me if you don't pay the property tax and opt to take the 8% simple tax deal--and are making only 4-6% on an investment you put your money into like stocks (instead of paying the property tax bill)--you are still the loser in this deal. I'm disappointed in Texas.

And I haven't heard of any State but Texas doing this property tax deferral either.
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Old 02-23-2010, 04:25 PM   #62
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I think this bill was to help out seniors who own their home but don't have the money to pay their property taxes (which otherwise would force them to sell their home or lose it). So the bill doesn't come due until their estate is settled.

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Old 02-23-2010, 04:30 PM   #63
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I think this bill was to help out seniors who own their home but don't have the money to pay their property taxes (which otherwise would force them to sell their home or lose it). So the bill doesn't come due until their estate is settled.

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One way or another the locals get their property taxes with interest.
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Old 02-23-2010, 04:52 PM   #64
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Orchid,
It is the lack of compounding that makes the difference, and the fact that the legislation was enacted when 8% sounded like a real good deal. I ran a spread sheet and if you do this for 15 to 20 years you come out with about 4 to 5% total. I won't guarantee the accuracy of my spread sheet, and if you do it for one year, it is obvious you will pay 8% At 5% interest you will pay about $1,526 compounded and 8% simple $1,600. Someone will have to check that but I think it is right. If you live into your 90's it just gets better.
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Old 02-23-2010, 05:01 PM   #65
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In our area of Texas, $7,000 of property tax buys you 3,000 sq ft, new home, on 1.2 acres of lake front property! At age 65 if the house is paid off you can defer your taxes until you and your spouse die. Admittedly your estate would have to pay the tax or loose the home, so you have to make up your mind how much estate do you want to pass to your kids, or weather you want to spend it.

.
Thinking back to my many years in the land of snakes and spiders, I recall that about yearly the local TV guys would do a story featuring a group of heirs, usually children, who had just gotten the word that Dad had gone for the "plan" years before his death, and that there would be no real estate inherited that day.
A bit shocking, and a little sad, but I managed to reach down and find at least a small smile.
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Old 02-23-2010, 05:02 PM   #66
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So I too disagree. You can live where you want only if that fits your budget.
My observation is that between state income taxes (or lack thereof), sales tax, property tax, and all the rest, the differences among locations may not be as great as it seems.

Example: in Az we paid $5000 in property tax and maybe 6% in state income tax. Here in Tampa, the property taxes are double (aargh) but... no state income tax. If I had young kids home, they'd be going to private schools (aargh) but back in Wi (high everything tax), they proudly went to public schools right through graduate school, at very low in-state tuition.

So you can find exceptions to any rule, but for us the apparent differences from locale to locale (assuming comparable settings) were more apparent than real. If your life planning hinged on $1000 a year or so, maybe it would be a deciding factor.
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Old 02-23-2010, 05:04 PM   #67
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It use to be you had 3 months to settle the account, I think it is 6 now, not sure. If you don't pay the taxes, then they become due with penalty. No loan shark ever charged a penalty like the state of Texas! I think it is close to 35%! You might as well give them the house!
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Old 02-23-2010, 05:09 PM   #68
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If you defer property tax in Texas, you still have a 6.5% sales tax (excluding food, medical, and services), more in a city, with the exception of car registration, that is just about it. A 3 bedroom, 1,800 sq ft home in a country setting can be had for less than $100,000. Utilities, could be a killer, heat/air runs about $200 or more depending on size of home, location, and insulation.
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Old 02-23-2010, 05:22 PM   #69
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8% is pretty high to me. I thought it was better than that.
Seems to me if you don't pay the property tax and opt to take the 8% simple tax deal--and are making only 4-6% on an investment you put your money into like stocks (instead of paying the property tax bill)--you are still the loser in this deal. I'm disappointed in Texas.

And I haven't heard of any State but Texas doing this property tax deferral either.
It isn't only Texas. Low income/disabled seniors in King County WA (my current place of residence) can get a property tax exemption or deferral. Low income or disabled seniors in Gray's Harbor County (where I plan to retire) can get an exemption from special levies and possibly also from a portion of the regular property tax, depending on how low their income is. I wonder why GH Co has an exemption rather than a deferral. I would think it'd be better to get the money later than not at all, especially since they are economically depressed.
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Old 02-23-2010, 05:54 PM   #70
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If you defer property tax in Texas, you still have a 6.5% sales tax (excluding food, medical, and services), more in a city, with the exception of car registration, that is just about it. A 3 bedroom, 1,800 sq ft home in a country setting can be had for less than $100,000. Utilities, could be a killer, heat/air runs about $200 or more depending on size of home, location, and insulation.

I paid $200 a month for utilities in Bellaire/Houston, but that was not for every month at all. Only mid-June thru mid-September was it necessary to have a/c all the time.
Winter months like Jan-mid-Feb. or so could be costly, but the rest of the months from mid-Sept. to Jan. and mid-Feb. to mid-June were low cost utility months. At least that was my experience there. You do get a breather some months.
But God bless the inventor of ceiling fans when you live in Texas! I had 6 of them going almost all year around either pushing air down or pulling air up.
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Old 02-23-2010, 08:03 PM   #71
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I was being a little sarcastic with my comment, ...
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Old 02-23-2010, 08:06 PM   #72
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Here's everything you ever wanted to know about Texas property taxes. Zzzzzzzz. Apparently there are additional tax exemptions beyond the homestead exemption to look forward to at age 65.

Texas Property Taxes: Taxpayers' Rights, Remedies & Responsibilities
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Old 02-25-2010, 07:57 PM   #73
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I grew up in an extended family of City of Chicago employees. We were loyal (understatement!) Chicago Dems and absolutely devoted to oiling the machine. Even had a picture of Mayor Daley I (God rest his soul) on the living room wall!

But things seem to be changing here in Illinois....... Careless politicians unable to rake in payola and keep the machine on track while still delivering services and keeping a reasonably balanced budget. Some even winding up in jail!

No doubt our flat 3% state income tax is toast. Under funded past promises to gov't employees need to be met and current employees need generous raises and benefit improvements while being asked to do less.......

It's bad. I hope this Illinois thing, this deterioration in the ability to manage gov't and increased shenanigans, doesn't spread to the rest of the country. Then there won't be anyplace for retirees to hide.
I think Grand Bahama and other places south will start filling up
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Old 02-25-2010, 10:21 PM   #74
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Then again, if you want to be close to a lot of opportunities to spend money shopping, restaurants and culture, you'd have to be closer to the city, and for any reasonable nice urban or suburban area, the housing prices combined with more property taxes make it harder for the math to work.
There are sometimes opportunities. We were recently looking for our retirement home living in a house with high property taxes in Ft. Bend County (west of Houston).

We found an ideal house for us. It is costing a little under $200k (1900 SF), is unrestricted (important for us given our pets), and taxes are about $3200 a year. It has no MUD taxes (it is on well and septic).

However, it is les than 5 minutes away from a mall and a good hospital and a lot of shopping and restaurants and it is an island surrounded by a sea of very nice houses. And, it is in an excellent school district.
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Old 03-03-2010, 12:58 PM   #75
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But things seem to be changing here in Illinois....... Careless politicians unable to rake in payola and keep the machine on track while still delivering services and keeping a reasonably balanced budget. Some even winding up in jail!
I grew up 60 miles south of Chicago and used to get my Cherry-Colas at the small neighborhood drug store owned by one of those imprisoned politicians. His brother, and co-owner and eventually Lt. Gov. I think, lived across the street. To me it was the epitome of small-town America, at least in my memory. Now I read that one of the friendly guys that ran the drug store is in jail. Hard to believe.

My wife and I are both from Illinois and will retire very soon. Neither of us are in a great hurry to move back to IL, though I'm sure that it would be much cheaper than here. But what always makes me write it off as a possibility: the flatness! I still shudder when I visit and see all that flatness. For some reason I just can't handle it! Though I do love seeing the full sky, something I rarely do in Philadelphia.
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Old 03-03-2010, 04:47 PM   #76
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And I haven't heard of any State but Texas doing this property tax deferral either.
Here in CT its done by each town. They also have a tax abatement for low income seniors to reduce their tax by $500 or so. They say it's to keep a balance of people in town. I think it's just because they want to point us out and tell their kids "that's what you will look like when you get old".
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Old 03-21-2010, 09:27 AM   #77
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The map gives a whole new slant on "blue" states. Not to get too political, heh, heh, but there does seem to be lot of overlap. Probably unrelated
well, considering that "red" states receive $1.99 from the USG for every $1.00 they pay in taxes, kind of belies their proud "self-reliant" facade. I guess that's unrelated too.
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Old 03-21-2010, 10:59 PM   #78
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well, considering that "red" states receive $1.99 from the USG for every $1.00 they pay in taxes, kind of belies their proud "self-reliant" facade. I guess that's unrelated too.
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Old 03-22-2010, 08:00 AM   #79
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well, considering that "red" states receive $1.99 from the USG for every $1.00 they pay in taxes, kind of belies their proud "self-reliant" facade. I guess that's unrelated too.
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Old 03-22-2010, 10:29 AM   #80
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The Moderation Team would like to remind members of the rules pertaining to political discussion on the Early-Retirement Forum. Only political discussion that is directly related to early retirement is welcome.

Please watch your posts to ensure that this and other threads do not veer into purely political discussion, which is better suited to websites devoted to topics other than early retirement. Thank you.
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