3.25.2011

Taxed to Death

When I was young and carefree and I heard "old people" complaining about things like taxes and property values I didn't really understand what they were so upset about.  Now that I am older, a tax payer and a consumer of more then just little things like food and clothes I get it.  Being a homeowner I get it even more.  My goodness...I seriously feel that I am being taxed to death.  I get my pay check and it's taxed.  I buy something at the store it's taxed.  I win a 2 night hotel stay and I have to fill out a W2 because it's going to be taxed.  I can't touch any retirement money I have saved before whatever ripe old age they have decided upon or else it'll get taxed.  When we bought our house we had to seriously factor taxes into what we could afford for a mortgage because it adds almost $350 a month.  The principal and interest payment might look pretty nice but when you add in the taxes and suddenly it's not so affordable anymore.  The only reasonable way to handle these monster property taxes is to set up an  impound account with your mortgage company and pay into it monthly along with your mortgage so that when the taxes are due twice a year the money is there.  All set right?  Well not quite. 

A couple months after we moved in last year we got a supplemental tax bill for $1,012.  They say it's typical on new construction.  We expected it but  weren't actually prepared to pay it so we asked for half to be be paid out of impound and by the time the other half was due this year they had already factored it in to this years impound and it would be taken care of.  We even got a nice escrow refund check.  Yesterday, we got yet another supplemental bill and the only thing it supplements is my annoyance.  This time it's $3,000 on top of our normal taxes.  That's not exactly what we planned on using our tax refund for so I call our mortgage company and thank goodness they agree to pay it.  It will raise our mortgage by $25.00 a month come May because it creates a deficit in our impound account but that hurts a lot less them ponying up 3k at once.  Now get this.  He says the reason could be for home improvements which allows the city to say that our house is worth more and therefore we owe more property taxes.  I wondered, how do they know anyways?  If we did anything that would require a contractor to get permits then it's reported to the city.  The only thing we did is our backyard so that must have been it.  We are already paying taxes on the house, then we get taxed on the landscaping job itself, then getting a 3k bill was like doubling the cost of our landscaping job-for  no good reason!  Apparently, California is notorious for doing their little shady re assessments on property value.  I suppose we better watch out when we get ready to do our kitchen remodel and we can probably forget about getting another escrow refund. 

But really.  It's enough to make your head spin.  At least we got a decent tax refund this year-goodness knows we've paid enough.  According to an old saying the only thing you can be sure of is death and taxes.  I may not have understood that as a kid but I certainly get it now.


5 comments :

Rania said...

Welcome to homeownership. Property taxes go up just about every year, that's just how it usually goes. In Texas it's based on your area, school district, neighborhood, house appreciation (regardless of any improvements), etc.

You can get an appraisal on your house and/or fight the property tax being assessed on your home if you feel that the taxes are too high. If you can prove that your home is not worth what the tax man says it is, you can get your taxes reduced. My uncle does this faithfully every year and has successfully lowered what he has to pay in property taxes. We just got our home appraised last month because we recently refinanced our home and when the tax documents come out later this spring, we will be comparing notes. If our appraisal comes in lower than what they say they think our home is worth, we will fight the tax increase.

Kristin said...

That's it. I'm never buying a house, forget getting older. To be honest I have no idea what you are talking about for most of this post. For our taxes we put "0" on every line because we don't own/do anything taxable! But I kinda know how you feel. City taxes in Japan, especially Tokyo, were insane. It's how they keep those streets so clean!

Lil' Woman said...

Taxes suck. Period.

Ameena said...

Property tax kills us every year! We even went to court to have our place re-assessed and while they gave in a little last year, they upped it again this year. So basically we lost out on the lawyer's fees too. What a waste!

ruthy ann said...

sometimes "adult" things suck big time! I hate seeing how much of my paycheck is lost due to taxes!

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