Florida property tax

[Dave Gray]

House prices in CA are very high for a similar reason: we also have a cap on the amount property taxes can rise.  What voters don't seem to understand is that these two things are linked, and lowering taxes is what MAKES house prices high.

People shop for homes based on the monthly mortgage note they can afford to pay.  If interest rates or property taxes are high, then that means buyers (at every level) have to shop for less expensive homes, which pushes prices down.  Conversely, if property taxes or interest rates are low, that means people can afford to take out a larger loan, which pushes house prices up.

If property taxes were at market value, it's not like millions of Floridians would just go homeless.  The housing market would fall until house price+property tax is in line with incomes.

I recognize this as true.

There is also the reality that things like minority owned properties will go up in value, the taxes come with it and push out these families that have lived there.

I don't like the idea of the home that I've already purchased growing out of my price range after I've already bought it.  I think we need to encourage families to put down roots.



We also have a separate issue here where people buy up several houses or companies own single family homes and then just rent in perpetuity.  Also bad.

Housing here is fucked.



I am not even coming across as dead-set against the property tax thing.  I think there's a balance.  However, I do reject the idea that the government being full of unqualified bozos and overspending on stupid shit -- that you can combat this by reducing their revenues.  They don't fix their problems with a lack of money; they just go into debt.

[Spider-Dan]

First off, state real estate values have skyrocketed and state property tax revenue has nearly doubled since 2019. Consequently, nearly all Florida counties are holding record high surplus reserves. Florida property tax revenue has greatly outpaced inflation and population growth since 2019. In my opinion, the cost of running local governments isn't tied to real estate values. Under the current system, if everyone's house doubles in price 6 months and their taxes go up how does that valuation number on a tax appraisers piece of paper make the cost of running the local government go up? Where is that money going? And more importantly, how am I benefiting from it?

[...]

All I've been seeing lately on the news and social media is articles with the politicians crying about how they will have budget shortfalls. Seeing as how they have record surpluses based off of years worth of overinflated home prices. They don't have a revenue problem, they have a spending problem.

There is a fundamental contradiction here.

On the one hand, you are saying that if there is a budget surplus, the government should NOT be spending that extra money, but rather returning it to the people while spending stays the same.  But then when there are budget deficits, you don't think taxes should be raised to cover that shortfall.  Instead, deficits are "a spending problem," so we should cut services... until government is back into surplus, at which point it's time for more tax cuts?

You are describing a one-way ratcheting of government, where even the services deemed to be important must be cut because It's A Spending Problem, and that spending is never restored when budgets are back in surplus.  As I said earlier, it is the approach of those who believe government is the problem and spend their time in power trying to prove it.

[Spider-Dan]

I don't like the idea of the home that I've already purchased growing out of my price range after I've already bought it.

I'm saying that a major cause of this is when taxes are too low.  Incomes are what they are... if property taxes rise to the point where the majority of people cannot afford to pay their mortgage+taxes, the price of houses will necessarily decline until this is no longer the case.

[Phishfan]

I'm saying that a major cause of this is when taxes are too low.  Incomes are what they are... if property taxes rise to the point where the majority of people cannot afford to pay their mortgage+taxes, the price of houses will necessarily decline until this is no longer the case.

That doesn't help a person like me where I am settled into my home and don't have intention to move. I need my mortgage and tax to be affordable for me now.

[Spider-Dan]

That doesn't help a person like me where I am settled into my home and don't have intention to move. I need my mortgage and tax to be affordable for me now.

Sure it does: your property tax is based on the value of your home, which is tied to the value of recent sales among your neighbors.  If those homes are affordably priced (and your local government hasn't yet been so gutted that you cannot file for a property tax reassessment), your property tax will be as affordable as theirs is, and your mortgage is unaffected.

But here we run into the other big obstacle to American housing affordability: existing homeowners want their property value to be sky high but their property taxes to be on the ocean floor.  So if there is a circumstance where your property taxes and value are driven way down, you (as a homeowner) are going to be pissed off, despite the fact that your home actually became MORE affordable (because your taxes went down).

All of this stems from Americans treating their homes as retirement investment plans instead of a place to live, which is itself a symptom of the nationwide destruction of REAL retirement plans like pensions.

[pondwater]

All of this stems from Americans treating their homes as retirement investment plans instead of a place to live, which is itself a symptom of the nationwide destruction of REAL retirement plans like pensions.

I totally 150% agree with this statement. However, would you also agree that owning a home is owning an asset?

[Phishfan]

I don't care about property value except for the relationship to taxes. I don't plan to buy another home,  I don't have kids to leave it to. As a matter of fact I will probably look at a reverse mortgage when older just to get that cash in hand and the bank can have it when I die.

[MyGodWearsAHoodie]

I don't care about property value except for the relationship to taxes. I don't plan to buy another home,  I don't have kids to leave it to. As a matter of fact I will probably look at a reverse mortgage when older just to get that cash in hand and the bank can have it when I die.

Be careful with reverse mortgages.  Often there is a clause where you lose the house if you don't die soon enough.

[Spider-Dan]

I totally 150% agree with this statement. However, would you also agree that owning a home is owning an asset?

It's definitely an asset, though as anyone who was a homeowner during the Great Recession can tell you, sometimes it's a depreciating asset.

[Spider-Dan]

I don't care about property value except for the relationship to taxes. I don't plan to buy another home,  I don't have kids to leave it to.

Many homeowners would be quite upset if the value of their home declined below the amount they owe on it (even if they can still comfortably afford to pay the mortgage).  Speaking of which:

As a matter of fact I will probably look at a reverse mortgage when older just to get that cash in hand and the bank can have it when I die.

If you owed more than the house was worth (i.e. if property values plummeted again like they did in 2008), a reverse mortgage would not be available to you.

[Phishfan]

Be careful with reverse mortgages.  Often there is a clause where you lose the house if you don't die soon enough.

I figured there is some tricky language to go through. It seems they want you to think the deals are too good.

[Phishfan]

Many homeowners would be quite upset if the value of their home declined below the amount they owe on it (even if they can still comfortably afford to pay the mortgage).  Speaking of which:
If you owed more than the house was worth (i.e. if property values plummeted again like they did in 2008), a reverse mortgage would not be available to you.

I bought a l9ng time ago. My house would be paid off.

[Sibster]

I have no problem with it.   I own my home and will die owning it.   That being said, countries like the Cayman Islands or the Bahamas operate the same way.   No property taxes.   If you buy a house, it's yours.

[Dave Gray]

The only way to limit the outflow is to limit the inflow.

This just doesn't happen, at least at the Federal level.  Republican administrations always cut taxes with the promise of cutting "waste, fraud, and abuse" but they continually blow up the deficit.

It's fair to say that Dems spend too much.  But Republicans cut taxes and also spend too much.

Clinton was the last person to balance the budget.
W. Bush increased by 4 trillion over 2 terms. (high income tax cut and war)
Obama was 8.4 over 2 terms. (recession crawlback)
Trump was 7.8 over 1 term (high income tax cut and initial COVID response)
Biden was 7 trillion over one. (infrastructure, COVID, rescue plan)
Trump's 2nd term is increasing the deficit at 1.9 trillion per year, which is the highest ever, I believe.

It's not exactly apples to apples since inflation changes things and W. Bush and Clinton are decades in the rear-view, but there just doesn't seem to be a throughline between cutting taxes to force cuts to spending with any meaningful effect.