Taxes

[secondcurve]

Originally Posted by Biggd

We haven't really had a recession in over 15 years, other than the first 6 months of the pandemic and then prices took off. That's the only thing that really resets the economy and causes prices to decline. Prices on everything have gone up substantially and people are still working off that sub 3% borrowed money. At some point the consumer will balk at the increases and pull back. I don't think things can keep going up at this rate much longer without a pull back.

The recession during the pandemic was actually just two months! Length of the recession aside, your point is well taken. I’m not wishing for a recession but when one hits many things will be reset as there is a lot of leverage in the economy.

[jeffk]

The actual tax you pay is a complicated matter with multiple moving parts.

Your assessment is based on your properties value as COMPARED TO OTHERS IN THE TOWN. The net value of the property can go up, or down. The desirability of YOUR property can go up or down as measured by similar properties that have sold recently. This evaluation is not an exact science. A sale (or a couple) driven by someone willing to pay a premium for getting what they want can ripple through all other similar houses. Limited availability of properties can drive up competition and prices. The overall economy can limit or explode what people are willing to pay for property. The real issue is if YOUR property stands out to gain, or lose, from the factors that are driving the prices. There could be a general increase in prices but your house is in a desirable town and houses there similar to yours are being bid up. Your house valuation goes up with THEIR sales. You have a more valuable house and get the taxes that go along with that. When the town's percent change in valuation is announced, you can compare YOUR percent change in valuation and estimate that your taxes are going up or down and, generally, how big the change will be.

Then there is the town's budget. Again there can be many factors in play. There can be special considerations for THIS year that drives taxes up. Frankly, it seems that most budgets of towns around the lake are not exploding. Maybe they have been have been comparatively higher for a long time but they don't tend to make great leaps upward unless there are justifiable costs. YES, I know people can quote exceptions. However, if you live in a town that has had high taxes for the last 20 years, do you think that is going to change?

The tax RATE is set by the overall town valuation and the town's budget.

All the above has to play out before you get your tax bill. Every time new valuations get sent out, people panic because they have, usually, gone up. You need to take into account overall town valuation and the town budget. Then you have to wait for your actual tax bill.

I'm not saying it won't be bad news but until you get it, you can't be sure what it will be. As information is released prior to the bills coming out, you may estimate but ALL the information needs to be compared.