Kiplinger's State Guide to Taxes on Retirees

[Dtail]

Florida redoes the property tax when you buy a house so a $350,000 house would be paying a least three thousand dollars in tax. No matter what the age of the home.

True. We just bought a house for 370k and expect the tax bill for 2020 will clearly increase due to the 2019 assessed value being low and still recovering from 2008.
At least the future property tax increases are limited to a maximum of 3% yearly.

 

[killingme]

Well we're in Connecticut and between high assessments, property taxes and sales taxes on everything as well as no tax break on any type of income, they nailed it!

 

[Offgrid Organic Farmer]

Is part of that a farm exemption?

No.

Most of my land is designated as 'treegrowth', woodlot, or forest. Over 92% of this state is 'forest'.

I can leave it alone, or
I can clear cut it for timber, or
I can produce firewood, or
I can manage it as wildlife habitat.

... E.g. here locally a friend has a 50+ acre hobby farm.

But because he generates at least $1,000/year in agricultural revenue he only pays property tax on his home & the land on which it sits (zero tax on farm land, buildings, equipment)

There is no requirement for me to generate any money from my land. The 'treegrowth' status sets the assessed value as a set level. But it is stilled fully taxed.

I pay $1.05 per acre each year for my land.

 

[Camping]

There are many sites that try to compare states. Each uses different criteria, and each site comes to different findings.

New England has long been considered to be 'high' taxed.

I live in Maine, where my pension is not taxed, and where my property taxes are very low.

For a 2400 sq ft house on 150 acres of land with a quarter-mile of riverfrontage, I pay ~$850 / year.

So much of this is about perception.

Florida is commonly thought to be the primary state for retirees. Yet Florida does not have the oldest average age, instead Maine holds that honor. Nor does Florida have the highest percentage of retirees, again Maine holds that distinction.

I read your other post where you mentioned you live in an unincorporated township and on a tree farm, so the reason for your low property tax. Your pension not being taxed, is that Military? I didn't know that there was any type of income/pension etc that was not taxed in Maine?



I grew up in Maine and thought of returning when retired (soon), but the overall taxes and the new tick problem has soured me (I tramped all through the Maine woods as a kid in the 70s, and never seen or heard of a tick back then).


Maine Income tax rate, married filed jointly:
$0-$42,899 = 5.8%
$42,900-$101,549.00 = 6.75%
$101,550.00+ = 7.15%



Sales tax = 5.5%


Yearly excise tax on vehicles; Example, if one bought a new vehicle with an MSRP of $50K (a mid grade 4x4 truck with a selling price of $40K after incentives) would be taxed on the MSRP for $1.2K (2.4%) on the first year with a sliding decrease excise tax rate until .4% on year 6.


Property tax; Farmington or Wilton (example) = around 2% of assessed value which is right around market value. So a $250K house would cost around $5K a year.


Too bad about the taxes and ticks there, I love the pine tree state otherwise.

 

[Offgrid Organic Farmer]

I read your other post where you mentioned you live in an unincorporated township and on a tree farm, so the reason for your low property tax.

52% of Maine townships are 'unorganized', so they share much lower taxes.

Land that is kept forested is taxed much lower.

A lot of retirees want a homestead with 100 acres of forest where they can cut their own firewood each year. and this is the lowest price land, with fairly low property taxes.

... Your pension not being taxed, is that Military? I didn't know that there was any type of income/pension etc that was not taxed in Maine?

Yes, military pensions are exempted from income tax in Maine.

... tax on vehicles; Example, if one bought a new vehicle with an MSRP of $50K (a mid grade 4x4 truck with a selling price of $40K after incentives) would be taxed on the MSRP for $1.2K (2.4%) on the first year with a sliding decrease excise tax rate until .4% on year 6.

I have a '82 Chevy dump truck that is taxed $50/year.

My Honda Goldwing is taxed $15/year. My have a Willy jeep that is taxed $15/year.

We also drive a couple Priuses, they are newer so they are taxed higher.

... Property tax; Farmington or Wilton (example) = around 2% of assessed value which is right around market value. So a $250K house would cost around $5K a year.

Anywhere down in Congressional District #1 and all the tourist hotspots have much higher market values and higher taxes.

You will not find any $250k homes in my township. But you can find $40k homes.

Our mil-rate is 0.008

 

[sengsational]

These kinds of state by state tax guides suffer from averaging out everyone in the state, so the results are often meaningless. I could get a much better idea of how I would fare in a state if they instead had a set of families that they dropped into various locations and reported the overall tax burden. One family would have a defined portfolio consisting of $X MM, 80% tIRA and another family would be also $X MM 20% tIRA. If X was fairly large, and presuming they spend 3%+/- of it annually, then the $10K exclusion on income that gives the state a "friendly" badge for instance, is just noise. The 0% income tax state has a huge impact on the former family, and a smaller impact on the latter. And property taxes seem highly driven by the precise location. If the family was dropped into Fort Lauderdale, FL it would be a big difference compared to Zephyrhills, FL. It would be a cool simulator, but the states and localities are always changing the way they get their tax revenues, so it would be an endless battle to maintain.