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Humungous 2010 property tax bill


Well, it happened.  Our property tax bill crept past 5 figures this year!  We just sent off the checks to the county and are still reeling from sticker shock.

photo from luxury home magazine blog

No, that’s not our sprawling 5 bed-, 7 full- & 2 half-baths estate mansion (looks really nice though.)  The tax bill covers our primary home, a rental property, and a recently-acquired investment property.  The tax went up 3% this year and in this economy every little bit stings.  The property value  is still down…why does the tax bill keep rising? Oh yeah, it’s because the county can’t keep a budget.  I’m going down to see the Board of Property Tax Appeals, but I doubt it will do any good.

Writing off big checks to the county sucks, but I would rather do this than sending a check to the bank every month. The bank loves this check from homeowners.  They can earn interest for 12 months from your money.  (Can the banks leverage this money? I couldn’t find any info on this.)  Instead of sending a check to the bank, I put it in my investment account and put it to work.  We just have to be aware that the bill is coming in November and be ready with the cash one to two months before the bill is due.  Of course, we have to be very careful during the down market and make sure there is enough in our emergency fund to cover the bill in case of another stock market dive.  A high yield savings account is also a great option to at least get some interest from it if you think stock/bond is too risky for this short time line.

We also pay our own homeowner insurance and haven’t had any problems so far.  If you are discipline and know how to save, it is better to have the money in your account rather than in the bank’s escrow.

What about you?  What is your strategy for dealing with property tax?  Do you just let the bank deal with it?  Do you think the big bill in November is too much trouble?

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{ 14 comments… add one }
  • Jessica07 November 10, 2010, 9:57 am

    You know how it goes… Your insurance company sees your house as a shack and your county appraiser sees your house as a mansion.

    • Sandy @ yesiamcheap November 11, 2010, 7:45 pm

      Amen to that one. I want to know who the hell assessed the value on the investment property that I owe because they might have been off by a county or two. Anyway, I pay the entire tax bill at once because the county give you an incentive (something like a 15% reduction) if you pay it early and in full. I bite the bullet and pay, pay, pay.

      • retirebyforty November 11, 2010, 10:53 pm

        Wow! 15% reduction??? That’s huge. We get 3%, that’s barely any incentive. bah!!
        I went in to appeal in 2008 and they were all very nice people who said they will consider it. Tax still went up!
        useless fools!

  • 101 Centavos November 10, 2010, 4:11 pm

    rb40, that sounds like an elephant-sized tax hit.
    our own property tax bill went up 15% this year, without so much as a by-your-leave. Made me mad enough to spit. Our long-term strategy is moving out to our country place on a permanent basis, which I’d do today if our kid’s weren’t settled in school and the present neighborhood. The property taxes on the little house in the country are less than a fifth of the taxes in the city.

    • retirebyforty November 10, 2010, 8:48 pm

      We live in downtown area so the tax is higher than the surrounding burbs. Someday….

  • Everyday Tips November 11, 2010, 6:11 pm

    Our property taxes have actually gone down the last 2 years, that is how bad it is where I live!

    I invest some cash into a Smarty Pig account every month, and I withdraw the amount I need in December and then September

    • retirebyforty November 12, 2010, 3:37 am

      I would like my property tax to go down, but if the paper value drop that much I would be even more peeved. 🙁

      • Everyday Tips November 12, 2010, 10:25 am

        It is the only silver lining in this black cloud called Detroit-Area-Real-Estate…

  • Janette November 12, 2010, 2:07 pm

    Our county did something different. They decided to increase the value of our property and then declare that “taxes have not been raised this year”. The houses in the neighborhood have sold for about 20% lower than last year- and the “value” went up 10%.
    I save every month in a separate account. I withdraw it on the day it is due. I might only make 15 cents on it over a year- but it is MY 15 cents!
    BTW- just my house taxes are about half of all of your taxes—and I live in the country.

  • Squirrelers November 12, 2010, 10:00 pm

    I have tried to appeal…well, actually it was a condo association in a building in lived in years ago. It was a smaller building, and I was actually the association President. Thankless job, by the way. Anyway, back to my story, we were a new building and got hit with a sizeable tax bill. We had an attorney in the building who dilligently secured information to build a case for our bill to be reduced. The result…..our bill did NOT get reduced! Stayed the same. The lesson I learned, besides high taxes on new construction, is to buy a home in a lower tax area. Simple as that. I don’t have that luxury now, but I think it’s a matter of homebuyers really giving thought to the reality that taxes A)are a huge part of your housing expenses, and B) can go up annually, unlike a fixed mortgage.

  • Aloysa November 14, 2010, 4:37 pm

    Our property bill was OUTRAGEOUS. We were shocked and launched ourselves into appeal process. But then we got a letter that it was a mistake. It did go down a little but it is still way too high. Our small condo is not worth as much as the county claims. It is always painful to pay it.

  • Matt February 16, 2014, 10:44 am

    I found your blog about a year ago and follow it regularly and I decided to start reading through from the beginning. There’s something in this entry that stood out to me and compelled me to comment. The 3% tax increase has absolutely nothing to do with your county’s ability, or lack thereof, to keep a budget. I understand you’re trying to make a point, but I believe it’s misguided.

    The reason your tax bill increased 3% in a year where the market value has declined is because the voters of our State have limited the increases in assessed value to 3% per year (in my mind a good thing and many states have done this). Think back to the years when we were consistently seeing double digit increases in home values year over year and you can imagine the gap that has developed between assessed value and market value. Not too many people pay much thought to this during those years of double digit increases when they’re only paying 3% more in taxes, but when the market is down like it has been for the past several years, and you’re tax bill keeps increasing, it gets a lot more negative publicity. This used to drive me crazy when I would see my house value plummeting but my tax bill increasing year over year. I don’t like paying for things that I don’t understand so it got me looking into it. I don’t look forward to cutting that check every year and I believe we pay more than our fair share of taxes, but at least now I understand why I’m being asked to pay more in down years.

    • retirebyforty February 17, 2014, 4:54 pm

      Thanks for reading and commenting. I think 3%/year is fair for most properties. One of my property tax got reset to a high value in 2006. It’s a remodeled condo. In that case, I think it’s perfectly fine to ask for an evaluation.

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