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Low home cost but high taxes vs. the opposite
So since H and I plan on buying a house next year after we sell our condo, I've been going back and forth on something. Right now we live in a city (it's not a city like new York but it's bigger than a town so they call it a city. It's pretty rural everywhere and there are no tall groups of buildings. When poking around at homes online in our price range which will be about $220K max, we can find a bunch of homes that will meet our needs in the same city, but the mil rate for our city is 34 (I don't know if it's .34 or 34%-not sure how its measured) so the property/car taxes are pretty expensive. But when I look at homes in surrounding towns, the mil rates are 26-28 but there are hardly any homes in our price range that we would even consider buying because they are just dumpy. We would probably be paying $220K-$240K for something livable. I'm sure we may stumble among something that we would could fix up in these surrounding towns, but I would REALLY like to stay in the town that we live in....so don't you think we would break even regardless if we bought a cheaper home with high taxes vs. a more expensive home with cheaper taxes? Can you give me some advice? We had toyed with the idea of moving to cheaper states but I don't think we are going to be doing that until retirement or so....I live in CT with HCOL. Help me make sense of which would financially be a better decision.
Just to give an example, we have friends that just bought a house in our city for $209,000 brand new/re-built from top to bottom, and her taxes will be in the $5,000 range for the year
Re: Low home cost but high taxes vs. the opposite
Yes, this would probably be our forever home in CT. That's a good idea to try out the mortgage calculator, I didn't really pay attention to the taxes part of it though so I will see how it comes out! We really don't want to go out of budget just to get into an area with cheaper taxes, because we really want to buy a house in the $180-190$K range. It's all we need for not having any kids so why over do it.
Xstatic- There are all very good points and I am right there with you on all of them. This is exactly why I don't want to leave this city
When we bought our house, taxes weren't really a deciding factor for us. We were more focused on finding an area where we wanted to live and an area where home prices have remained steady. In my opinion, I'd much rather pay a couple extra thousand in taxes each year than buy in an area where home prices are likely to plummet the month after we close. If the increased taxes also means better schools/city services (I realize this is not always the case) then I would then really rather live in the area with higher taxes.
Focus on what qualities that you (and other homebuyers) are looking for in a neighborhood. Don't worry about the taxes, as long as they are affordable.
We decided to buy in a high tax area, knowing that our property taxes this year may be up to 10k which is insane to me. But when we think of what we are getting for it versus our last home where there was none of this, it makes it completely worth it. We have a community, good schools, parks, playgrounds and a much shorter commute for DH. Those things aren't necessarily quantifiable in $, but are important to me none the less.