The 2022 Housing Bubble has resulted in a big increase in home prices, which is causing a big price increase in Property Taxes. For instance – in Austin, TX the tax assessments for homeowners and real estate investors just surged by over 50% in 2022.
Other Housing Markets like Dallas, Phoenix, and Nashville have also had massive tax assessment increase. The result is that the cost of owning a home in these areas will surge dramatically going forward.
Higher Property Taxes can cause big problems for Seniors and those on Fixed Incomes because their incomes do not go up enough to offset the tax increases. Moreover – high property taxes are a big problem for INVESTORS.
Particularly in Real Estate Markets like Austin and Dallas, where the property taxes are high and the rental yields are low. Investors are already struggling to turn a profit in these markets. Increasing property taxes even further could result in investors losing money and being forced to sell.
Higher Property Taxes are also a big issue for New Home Buyers / First Time Home Buyers. New Buyers aren’t protected by Homestead Exemptions or Property Tax Caps, so they are buying into the market at the highest property taxes in history.
Combine that with surging Mortgage Rates and you have an affordability crisis for new homebuyers. In cities such as Austin, Los Angeles, and Seattle, the cost to own a home is nearly double the cost to rent a home. The more that taxes go up, the more that renting appears like a better financial option.
But this isn’t the case everywhere. Some parts of America, particularly cities like Oklahoma City, Tulsa, Memphis, and Miami, are actually cheaper to buy/own a home than to rent. Higher property taxes might not be as damaging to these Housing Markets.
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Austin Article 1: https://www.kxan.com/news/local/austin/travis-co-appraisal-district-says-their-market-values-have-been-too-low-what-does-that-mean-for-your-notice/
Austin Article 2: https://www.kxan.com/news/local/austin/never-seen-anything-like-this-realtors-caution-dramatic-tax-bill-hikes-for-new-homeowners/
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