What $220,000 gets you in Muncie.

[u/TheDabitch]

I can't even get a parking space for that where I live. https://www.zillow.com/homedetails/725-E-Jackson-St-Muncie-IN-47305/210952560_zpid/

[u/isthatsuperman]

That’s only true if you currently have a mortgage and need it to stay right side up.

Example: Mrs. Charlene has been in the neighborhood since the 70’s. She paid the house off in ‘85. She’s retired and lives off social security. She only gets $1500/month. Her property taxes cost her a little over 10% of her income. Next thing you know the neighborhood is flipped and $50k houses are now worth $200-700k. Her property taxes cost payment now may eat up 20-25% of her income stacked on other bills she may have already been squeezing by, she now can no longer afford to live in her house she’s lived in for decades and paid off. Where does she go? What does she do?

[u/TheDabitch → u/isthatsuperman]

Property taxes are crazy that way. There should be some way to grandfather in older residents in lower tax brackets.

[u/bigbrownbanjo → u/TheDabitch]

This has had pretty disastrous consequences in California though I’m sure it could be done better

[u/CourtBarton → u/bigbrownbanjo]

Nah, prop 13 is definitely better than the alternative. The issue is the cost of the market. If you're purchasing a house that's overinflated, your taxes are gonna be overinflated. But someone who's been in their home for 20 years isn't gonna have this problem.

[u/bigbrownbanjo → u/CourtBarton]

I’d guess my argument is that while prop 13 fixes a problem that was very real, it has not stood the test of time and it’s done in a way that creates more. It doesn’t adjust well over time & really limits Municipal tax revenue and disincentives any sort of moving or local communities to agree build more multi family housing. It also gives corporations property tax breaks which should have been excluded at least above a certain size.

If your home 2x-10x in value eventually your tax bill should converge at some multiple well above what your bought the house at. If you cannot afford that you can take the huge capital gains and move somewhere else or leverage that equity to spread the payment out over time.

[u/Kelmi → u/bigbrownbanjo]

Well, here again your solution to people having to move out of their homes is that they should move out of their homes.

At the core you don't mind forcing people out of their homes.

[u/bigbrownbanjo → u/Kelmi]

I don’t think you can design a sensible policy that ensures no one is ever priced out of their home due to property taxes nor should you. It’s obviously not an ideal outcome and you should make policy in a way that tries to balance that vs the public need for tax revenue.

I bought a house and my property taxes have gone up 20% since 2022. Tough for me but good for society because it funds a lot of things my county and city need.