The biggest economic enemy facing the American family in the years to come are high property taxes.
If you follow much of the financial news these days, especially within the real estate industry, you’ll hear comments being made about historic inventory shortages, unreasonably high mortgage rates, inflation, and even building supplies, supply chain disruptions and overall costs. But these are simply the initial barriers that any potential homeowner will be forced to face. The one enemy that continues to wage its unrelenting war on homeowners is the invisible siege of governmental property taxes.
Sure, consider that home prices have risen over 30% in the last 3 years, and even inflation running around 8% or 9% a year, there are other matters that are going to challenge homeowners moving forward, and these are the ridiculously high real estate taxes being levied upon individuals. The unseen factor that makes this so problematic is that when the home appreciates, the taxes increase, thus penalizing a homeowner even though they have never even realized the increase in homeowner equity. They’re still paying taxes on the appreciation for the entire time that they own their home, even though they haven’t even sold the home.
According to ATTOM, the data analytics firm, U.S. homeowners have paid nearly $440 billion in property taxes. This is 3.6% more than they paid in 2021.
The most egregious perpetrators of property taxes are primarily in the Northeast: New Jersey, Illinois, Connecticut, Vermont, Nebraska, Pennsylvania, New Hampshire, Ohio, and New York, respectively.
This presents that the top 6 out of 8 states exercising property taxes on homeowners are in the Northeast.
According to the April report published by ATTOM, the average single-family home estimated value increased 7.9% from 2021.
Let’s dig a little deeper into the actual numbers for New Jersey: in 2022 the effect of real estate tax for the state of New Jersey was 2.49%, which translated into annual taxes on a median priced home of $8,362. That translates into a total amount of taxes paid over 15 years presuming that the taxes don’t rise, of $125,430 for a $335,000 home. So in other words, the homeowner for the first 15 years that he owns his home, is having to pay 1/3 of its value back to governments, primarily state governments. This escalation of tax cost is ultimately going to undermine the true value of purchasing a home unless something is done.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single-family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.
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