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Comment by aprilthird2021 | Hacker News Reader

aprilthird2021

I waited till I had the whole sale price in cash then bought, it's reduced my layoff anxiety 1000% and I'm sure it's not the savviest financial choice, but I'm happy with the security of knowing I can stay here for a long time no matter what

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It depends on the appreciation and in turn the property taxes. I own my house outright. Completely paid off. But the increases in property taxes is forcing us to sell and move, likely in the next 5 years. Too bad, love the neighborhood and the area.

I don't understand. The increase in property tax is forcing you to sell? How much percent is the property tax? Alternatively won't you make a windfall in the sale (I assume property tax only go up when the value goes up)

In most places in the US (california being a notable exception) taxes are reassessed regularly based on market conditions. In some areas this can result in the property taxes rising to an appreciable fraction of the mortgage rate - or in the GPs case, what the mortgage would have been, if they hadnt paid it off already.

Yeah. Unfortunately the real market value grew so fast that when the assessed value catches up over the next few years the property tax is going to take a nice chunk of my net income.

Honestly, this is not a hardship but a nice problem to have. I grew up chronically poor and I feel fortunate and grateful that we have a comfortable home that is ours with equity while a lot of people have housing insecurity.

I agree on the windfall part but selling to get that money is not that simple in the current real estate market and political climate. ie you got to live somewhere... and everywhere you desire is expensive.

If you own the house outright then how can the increased value force you to sell? You don't have a mortgage, and your property tax can't be that much more than a normal rent in the area. Can it?

Because of the rising tax rate relative to income. Ours is projected to increase to about 20% of our net income. That's why.

So yeah nice on paper that the house is worth a lot more than we bought it... but that value matters if we sell and move. There is a lot more to that decision than just the property tax, however it sort of putting a time limit to it.

Thanks for clarifying. I guess I thought 20% of net income is not that high for housing costs...

Most people will never be able accomplish this because home prices increase so much. And meanwhile you have to live somewhere, and all the rent money is money you dont get to save or put towards home equity

Maybe so, but I just have always been averse to debt and mortgage for exactly this kind of scenario

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