Thursday, 28 October 2010

House prices and property tax

When you buy a house here in California, the sale/purchase price is a matter of public record. This is quite different to UK/Ireland, where the purchase price is totally private.

The house we're currently renting though, last sold for about $620k. About seven years ago. (Wow!)
It's probably worth a bit more now, but it's totally academic.

You can find all this sort of information out through

But that's not what this blogticle is about: what's interesting is the property tax.

The property tax on this house is about $8400 a year. My goodness. As far as I can tell, the main chunk of the property tax will not be more than 1% of the assessed value of a house. If you buy a house, there's an assessed value right there.

Soooo, if you buy a house, figure on paying 1% of the purchase price in local taxes every year for ever more.

Thanks to the famous (Reagan-era?) proposition 13, though, your property tax will not rise by more than 2% a year. So if you never move house, that 1% of purchase price is going to increase every year by 2%.

But still ... one percent. Ouch.

The lesson for me is that suddenly I don't feel *so* bad about the rent on this place: nearly a quarter of it goes in local taxes! (Unfortunately, of course, I don't get to deduct these against my income tax. Such is life. I guess that's why I "should" buy a house here. Aye, right.)

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