So… one takeaway from this digression is that maybe some seniors, depending on their personal, physical and financial situation, and where they live, should consider renting, not owning in their golden years. Home ownership, tax implications and maintenance has its drawbacks (and being in the middle of repairing the mess from a hot water heater induced basement flood and its ramifications, this is pretty clear).
If a home is paid off, renting may not be practical. Then again, there are a lot of costs to home ownership.
Addressing social security solvency is an actuarial matter. And the issues involved have been known for a long time. Its not like we woke up one day and found out 10,000 people were unexpectedly retiring each day. The proposed fixes have been known for a long time as well and are not complicated. Though the longer we wait, the tougher the fixes become (because there is less time for them to work the longer we wait). Knowing all that we have instead elected to kick the snowball down the road. At some point presumably that will stop. Medicare on the other hand is, relatively speaking, a much more difficult issue to address.
Many (think its most and it may be all) states created a right to an education in their state constitutions. In those states support goes beyond a sense of community. And real estate taxes aren’t the only way to fund schools (even in states where real estate taxes are the primary funding source - there are other broader taxes of some type that provide a portion of the funding). Real estate taxes could be replaced with income, sales or some other type of tax. And if spending is increasing rapidly, changing to a different tax won’t change the necessity for tax increases.
If you rent in an area with increasing real estate taxes, don’t rents go up to cover them?
@jym626 - I can’t answer for @alwaysamom, but we pay property taxes on real estate that is neither occupied by us or rented to others in eight different school districts. I don’t enjoy writing the checks, but I don’t object to paying our reasonable share of the cost of educating those districts’ students. I see it as part of the social contract.
These taxes are voluntary, in that we aren’t being forced to own the real estate.
Hi @Sherpa. If I owned real estate as a business I’d expect to pay all the associated taxes. The homestead exemption, and then the school tax break for senior homeowners on their primary residence is a benefit just like your benefit of having a low income on paper and benefitting from ACA subsidies. Ironically, the public schools in my area are some of the top schools in the extended metro area. Guess they are doing something right with their tax dollars.
As was mentioned above, there are lots of ways to fund education. Our county has raised the sales tax to fund education, so much of what we save in the senior school tax exemption goes backinto the county coffers in the tax on our spending in the county.
I just looked at the other county tax exemption categories in our county. Most, even an additional seniors benefit, are income capped (have to earn below a certain income threshold, and I assume its earned income). There are also disabled veterans exemptions, surviving spouse exemptions, etc.
There are probably homeowner seniors inthe county who aren’t aware of the exemption so may not take advantage of it, but it would be surprising if many consciously choose to continue to pay the school tax when they qualify to exempt.
And to clarify, @veryhappy, the other county homeowner taxes remain in place. Its only the school tax that one is exempt from after a certain age. So the police, fire, library funding is still covered.
In my town, about 85% of property taxes go to the schools. “Lots of things” is a pretty small piece of the pie.
“School taxes” are not broken out as a separate component of the total property tax. So it wouldn’t even be possible to exempt someone from just the school portion of taxes.
The cost per child per year of the schools exceeds most what most people pay per year in property taxes, and if you have two or more kids you are really getting a bargain. These families are getting subsidized by everyone else without kids. No one complains about that.
I have seen a lot of people complain about that. “I sent my kids to private schools so why should I have to pay for you to send yours to public?” “My kids left the public schools 10+ years ago, so why am I still paying for public schools?”
In our district, the average priced house pays a little less in annual real estate costs than the district spends per kid on education. So more than half the households with at least one kid are getting a bargain. You could live in the cheapest house in the district and pay the lowest property taxes and have 4 kids in the schools. Or you could live in the most expensive house in the district (about 15-20 times the value of the average value) and have no kids in the district. Its the nature of the beast in terms of taxing based on property values. And people understand that when they move/build here.
But pay for schools with say income taxes and you have similar issues. You make 10 times what I do and have no kids and I have 4 kids in public schools and I am getting a bargain and you aren’t. Likely some people would complain about that too.
Only way you would get no complaints from a bargain/no bargain stand point would be if everyone paid based on the number of kids they had. At that point its not public education.
In the end, if you live in a district which may have significantly higher taxes, seems to me you need to plan for that somehow in terms of retirement planning. Live in a district which caps them or reduces them for people over a given age. Or save more for retirement or plan to spend less on other things or leave less to your kids. Or plan to move to a location with lower taxes.
And in terms of what anyone pays for various services and how, seems to me that is beyond the scope as there are literally thousands of ways that is done so we would be comparing apples to oranges to bananas.
It is interesting to see how other places handle things. Private trash pick up here as well. You can pay really little or through the roof depending on how much garbage you generate. I like that I am not subsiding my wasteful neighbors. Taking things to the dump? Minimal fee of $25 applies that covers a small load. Street lights - depends on the city and development. Sewer rates here are billed based on the lowest water consumption per month in a given year, which makes sense (no one waters their garden in January, lol). In other local places, it is assumed that every drop of water goes into the sewer, even water that is used for irrigation. In a neighboring city, irrigation systems have to be on a separate meter, and minimal per meter charge is billed even when it is not used.
Interesting that some say there is no breakdown of property taxes. Our county breaks down the taxes into categories with dollar announts, so it easy easy to see what goes where. The taxpayers need to know where the money is going.
“New wealth” driving housing prices in places like CA has not been such a problem for folks staying in their houses as it is here because there are protections in place, such as capping property valuations for as long as one stays in their house or by some other mechanisms. It is a huge issue where there is no such cap - it can hit folks hard.
Private trash pickup ($34 quarterly) and metro fire service ($700 annually) here, but property taxes are roughly $1/square foot. Schools suck, but everything else is heaven. We were fortunate that we did not have to move too far away from our long-term neighborhood to disengage from higher property taxes (still low compared to the coasts), but we DID very consciously decide to move while we are still healthy and with rising taxes and long-term cost of home ownership in mind. My mother did the same thing and decided to move from Michigan to our town in AZ when she was 78, leaving her five brothers and sisters and extended family and neighborhood from birth in MI. She’s almost 81 now and is thrilled with her new home, friends, church, activities, weather, and having me nearby. She’s in perfect health which I’m sure is key in making this kind of adjustment at her age, but she was very mindful about it. My dad, too. He move from MI to AZ, about an hour away from us, several years ago in his 70s. I’m very happy they decided to uproot because I’m near now in the event they ever need me, and I know that they are living well within their means and will not run into any financial difficulties in the future.
I think you misunderstood that comment about “no one complains” @saillakeerie . I took it to mean that the people with multiple kids in the public schools benefitting from the taxes paid by singles or couples with no kids aren’t complaining.
Maybe I misread it. But why would people getting the benefit complain? Wouldn’t it be the people not getting the benefit (direct benefit rather than ancillary such as increased property values associated with good schools) but paying for it who would complain?
I used to also think that the older people were not benefiting from great public education - until my dad reminded me that the students his taxes are paying for in his 60’s will be the people caring for him in his 80’s - and he wants them to be educated!
^I like that. Also, we all vote together to select our leaders. I would want everyone educated and make informed decisions whether I agree with their choices or not. If seniors are better off financially than other age group, I don’t see why they should get a tax break. We should take care of next generations not unduly burden them.
Was at $8782
Dropped to $8452 (-6.0%)
Went up to $8753 (+3.6%)
Dropped to $8254 (-5.7%)
Went up to $8421 (+2.0%)
Dropped to $7798 (-7.4%)
Went up to $8926 (+14.4%)
Dropped to $8617 (-3.6%)
Went up to $9130 (+6.0%)
Dropped to $8731 (-4.4%)
Holy cow.
Since its peak in mid-December, it has dropped over 50%.
Anybody loading up their IRAs with this? I think the stress would kill me. #-o
