People forget … If you refinance you are essentially selling the house to yourself with the lower rate, but Mr. Taxman will up your taxes to the current market value of your home, which is ridiculously high right now. Any savings in interest goes back into higher taxes. And now you will need more expensive insurance to cover the increase in home value.
This is not how things work in the US. At least not in the states that I’ve lived in: TX, CA, IL.
My current state, TX, regularly updates the property value assessment, so even if I don’t refinance, my property taxes goes up. With homestead exemption, the rise is capped at 10%, but over 2-3 years, it easily catches up to the market value.
But if you’re in CA or NV, that value assessment increase is capped at something like 2% or 1% annually, respectively. (Proposition 13) Creating situations where homes purchased 20 years ago are still paying really low property taxes compared to today’s buyers.
Isn’t that the way it should be? In Florida it’s capped low per year also…you bet the county raises it the max each year. My 95 year old neighbor has a yearly tax bill of 590, mine was 6k. If I stay in my house 50 years, my tax bill will be 1 tenth that of the new owners too.
People forget … If you refinance you are essentially selling the house to yourself with the lower rate, but Mr. Taxman will up your taxes to the current market value of your home, which is ridiculously high right now. Any savings in interest goes back into higher taxes. And now you will need more expensive insurance to cover the increase in home value.
This is not how things work in the US. At least not in the states that I’ve lived in: TX, CA, IL.
My current state, TX, regularly updates the property value assessment, so even if I don’t refinance, my property taxes goes up. With homestead exemption, the rise is capped at 10%, but over 2-3 years, it easily catches up to the market value.
But if you’re in CA or NV, that value assessment increase is capped at something like 2% or 1% annually, respectively. (Proposition 13) Creating situations where homes purchased 20 years ago are still paying really low property taxes compared to today’s buyers.
Isn’t that the way it should be? In Florida it’s capped low per year also…you bet the county raises it the max each year. My 95 year old neighbor has a yearly tax bill of 590, mine was 6k. If I stay in my house 50 years, my tax bill will be 1 tenth that of the new owners too.