Property Taxes

In 1973, I bought a house for $15,000. Payments which included an escrow for insurance and taxes were only $76.00 / month. I have borrowed via a second mortgage against the property, and kept it rented for 17 years. Those mortgages were paid off several years ago and now, the only expenses to pay on the house and property are the upkeep and taxes. The house is the same as when I bought it except for closing in the garage to make another bedroom, the occasional paint job, replacement of trim, and two roofs.

Today the property, for tax purposes, is estimated at $100,000. That’s a seven-fold increase in the 36 years that I have owned this property. Am I carping -- no, but just think about it. The house was 10 years old when I bought it. It was built to different standards than new houses and add to the mix, the foundation has settled, cracking the brick veneer outer walls. (2 very minor cracks) Looking at the house from a purely physical standpoint, the house is not as good as it once was, so it ought to be worth less, not more. The property the house sits on hasn't gained any girth so it is the same size.

The neighborhood was once a thriving middleclass area, but most of the houses are rental houses now and the middleclass have moved out to the burbs for newer digs. So what is it about this property that the county, city and state find so valuable?

I know that this story is not unique, but when you own a property in an area dominated by Democrats and Liberals, you can expect your housing appraisal to increase with regularity. By increasing the appraisal value, they can collect more taxes and make the claim that they haven't raised taxes. At least they can claim not to have raised the tax rate.

If I were still living in the house, other than carp about the taxes, I probably would not have an issue. The house is kept rented which supplants my income and pays the taxes on the property. However, I have to rent it for much more than I should to overcome the high taxes and insurance. Several times, I have listed the property for sale, but received no offers for what the county appraiser says the property is worth.

I think of myself as a principled person so I took the house off the market for good. I will leave the disposition of the property to my children when I am gone. In good conscious, I cannot saddle another human being with a mortgage of $100,000 for a 46-year-old, small 1400 square foot house in a rental neighborhood. It is my opinion that the house is not worth its appraised value and that the county officials should be ashamed of themselves for running up the appraisal on those old tract houses. No doubt, that the house has appreciated in dollar value because of a less valuable dollar, but not to the tune of what the county appraisers say. If I sold the house for what I thought it was worth, I would be cheating myself out of a good monthly income from the rent I receive.

If I were to sell the house for market value, the new owner could not recoup the purchase price. It works for me because I have so little in the property. So, if you like seeing your house increase in value because of tax appraisals, then keep electing Democrats. They will keep you satisfied.

I relate this story because everywhere Liberals or Democrats dominate, their areas become depressed. It is always for the same reasons -- they tax their constituents until those with the ability to pay move and leave the high taxes to those who cannot. The county in Texas where I live is being developed at a very fast pace as people move here from Houston to escape the city and county taxes. Friends of mine who bought their homes in Harris County pay more in taxes than for their mortgage. It is really a sad commentary for an area with so much industry and great heritage. Unless things turn around in Houston, that city will wake up one morning and realize that those who can afford to pay high taxes are gone. That leaves the city with those who cannot afford the taxes. What will they do then? It will be especially painful for Houston if the Liberals and Greens diminish the oil business. Yet the people keep electing Democrats. Democrats are like smoking cigarettes, you know they will kill you but the addiction (to their handouts) is too powerful to overcome.

Maybe it is just me, but I don't see anything that Obama is doing that will help this country. His policies will drive our wealth to foreign shores. If you are one of the lucky ones to have a job, I would suggest that you hold on to it. Unless Obama stops his war against those who make it possible for everyone else, things will get immeasurably worse. We will be sitting here with our high tax rates for the rich and watching our jobs migrate to other countries. We won't have to worry about polluting the atmosphere when nobody can afford to drive their cars if they own one.

Hope to be more cheerful next time. I promise to not write just after opening my 401K statement.

Cheers,

-Robert-