Question about taxes after buying a foreclosed home???

[CA renter]

Wow. I’ve been around real estate all my life (broker/investor parents) and never knew this. That is very important information for everyone to know.

When I’ve bought before though (near the bottom), the tax was based on my purchase price, so wondering if it’s not REO-specific????

[sandiego]

I did grasp the point. In your example, the buyer is saving a few hundred thousand dollars on the purchase price of a newer home and worrying about a few hundred dollars per month difference in property taxes. If that is the case, homeownership may not be for you.

It is also a temporary situation. If you follow the proper procedures, you MIGHT be able to reduce your BASE tax after a year or two. Of course the entire neighborhood will have to slump in order to get enough comps to make a case. Ultimately, this will lead to lower tax revenues at the state level, which will trigger budget cuts locally. Now you have a nice, new, cheap home but no teachers to fill the big schools that you are paying for with your CFD/Mello Roos payments. Damned if you do, damned if your don’t.

BTW, nobody mentioned assessments because they aren’t taxes. They are on your tax bill but you can’t (legally) deduct them on your income taxes. Most educated buyers realize that those are a fixed cost for a minimum of several years.

[sandiego]

I did grasp the point. In your example, the buyer is saving a few hundred thousand dollars on the purchase price of a newer home and worrying about a few hundred dollars per month difference in property taxes. If that is the case, homeownership may not be for you.

It is also a temporary situation. If you follow the proper procedures, you MIGHT be able to reduce your BASE tax after a year or two. Of course the entire neighborhood will have to slump in order to get enough comps to make a case. Ultimately, this will lead to lower tax revenues at the state level, which will trigger budget cuts locally. Now you have a nice, new, cheap home but no teachers to fill the big schools that you are paying for with your CFD/Mello Roos payments. Damned if you do, damned if your don’t.

BTW, nobody mentioned assessments because they aren’t taxes. They are on your tax bill but you can’t (legally) deduct them on your income taxes. Most educated buyers realize that those are a fixed cost for a minimum of several years.

[sandiego]

I did grasp the point. In your example, the buyer is saving a few hundred thousand dollars on the purchase price of a newer home and worrying about a few hundred dollars per month difference in property taxes. If that is the case, homeownership may not be for you.

It is also a temporary situation. If you follow the proper procedures, you MIGHT be able to reduce your BASE tax after a year or two. Of course the entire neighborhood will have to slump in order to get enough comps to make a case. Ultimately, this will lead to lower tax revenues at the state level, which will trigger budget cuts locally. Now you have a nice, new, cheap home but no teachers to fill the big schools that you are paying for with your CFD/Mello Roos payments. Damned if you do, damned if your don’t.

BTW, nobody mentioned assessments because they aren’t taxes. They are on your tax bill but you can’t (legally) deduct them on your income taxes. Most educated buyers realize that those are a fixed cost for a minimum of several years.

[sandiego]

I did grasp the point. In your example, the buyer is saving a few hundred thousand dollars on the purchase price of a newer home and worrying about a few hundred dollars per month difference in property taxes. If that is the case, homeownership may not be for you.

It is also a temporary situation. If you follow the proper procedures, you MIGHT be able to reduce your BASE tax after a year or two. Of course the entire neighborhood will have to slump in order to get enough comps to make a case. Ultimately, this will lead to lower tax revenues at the state level, which will trigger budget cuts locally. Now you have a nice, new, cheap home but no teachers to fill the big schools that you are paying for with your CFD/Mello Roos payments. Damned if you do, damned if your don’t.

BTW, nobody mentioned assessments because they aren’t taxes. They are on your tax bill but you can’t (legally) deduct them on your income taxes. Most educated buyers realize that those are a fixed cost for a minimum of several years.

[sandiego]

I did grasp the point. In your example, the buyer is saving a few hundred thousand dollars on the purchase price of a newer home and worrying about a few hundred dollars per month difference in property taxes. If that is the case, homeownership may not be for you.

It is also a temporary situation. If you follow the proper procedures, you MIGHT be able to reduce your BASE tax after a year or two. Of course the entire neighborhood will have to slump in order to get enough comps to make a case. Ultimately, this will lead to lower tax revenues at the state level, which will trigger budget cuts locally. Now you have a nice, new, cheap home but no teachers to fill the big schools that you are paying for with your CFD/Mello Roos payments. Damned if you do, damned if your don’t.

BTW, nobody mentioned assessments because they aren’t taxes. They are on your tax bill but you can’t (legally) deduct them on your income taxes. Most educated buyers realize that those are a fixed cost for a minimum of several years.

[hipmatt]

Sandiego, apparently, since I consider a surprise $360 a month more on a mortgage to be a significant discrepancy and one that would personally affect my decision to buy, or at least the sales price of the home that may be involved just shows how poor, pathetic, and how peons like me shouldn’t be considering home ownership. I will now continue renting until I make it to full time a-hole status, and at that point, I won’t have any cares as to the details of a mere 23% surprise in my monthly home expenditures. I will then tell the poor renters looking to buy, that if they partake in doing some research and sharing it online with a few other interested parties who found it to be valuable info, then they too are just too stingy, and home ownership isn’t for the prudent or thrifty.

BTW.. wouldn’t it be nice if the several years you referenced regarding the assessments wasn’t 10 or 20, like they are in reality.

[hipmatt]

Sandiego, apparently, since I consider a surprise $360 a month more on a mortgage to be a significant discrepancy and one that would personally affect my decision to buy, or at least the sales price of the home that may be involved just shows how poor, pathetic, and how peons like me shouldn’t be considering home ownership. I will now continue renting until I make it to full time a-hole status, and at that point, I won’t have any cares as to the details of a mere 23% surprise in my monthly home expenditures. I will then tell the poor renters looking to buy, that if they partake in doing some research and sharing it online with a few other interested parties who found it to be valuable info, then they too are just too stingy, and home ownership isn’t for the prudent or thrifty.

BTW.. wouldn’t it be nice if the several years you referenced regarding the assessments wasn’t 10 or 20, like they are in reality.

[hipmatt]

Sandiego, apparently, since I consider a surprise $360 a month more on a mortgage to be a significant discrepancy and one that would personally affect my decision to buy, or at least the sales price of the home that may be involved just shows how poor, pathetic, and how peons like me shouldn’t be considering home ownership. I will now continue renting until I make it to full time a-hole status, and at that point, I won’t have any cares as to the details of a mere 23% surprise in my monthly home expenditures. I will then tell the poor renters looking to buy, that if they partake in doing some research and sharing it online with a few other interested parties who found it to be valuable info, then they too are just too stingy, and home ownership isn’t for the prudent or thrifty.

BTW.. wouldn’t it be nice if the several years you referenced regarding the assessments wasn’t 10 or 20, like they are in reality.

[hipmatt]

Sandiego, apparently, since I consider a surprise $360 a month more on a mortgage to be a significant discrepancy and one that would personally affect my decision to buy, or at least the sales price of the home that may be involved just shows how poor, pathetic, and how peons like me shouldn’t be considering home ownership. I will now continue renting until I make it to full time a-hole status, and at that point, I won’t have any cares as to the details of a mere 23% surprise in my monthly home expenditures. I will then tell the poor renters looking to buy, that if they partake in doing some research and sharing it online with a few other interested parties who found it to be valuable info, then they too are just too stingy, and home ownership isn’t for the prudent or thrifty.

BTW.. wouldn’t it be nice if the several years you referenced regarding the assessments wasn’t 10 or 20, like they are in reality.

[hipmatt]

Sandiego, apparently, since I consider a surprise $360 a month more on a mortgage to be a significant discrepancy and one that would personally affect my decision to buy, or at least the sales price of the home that may be involved just shows how poor, pathetic, and how peons like me shouldn’t be considering home ownership. I will now continue renting until I make it to full time a-hole status, and at that point, I won’t have any cares as to the details of a mere 23% surprise in my monthly home expenditures. I will then tell the poor renters looking to buy, that if they partake in doing some research and sharing it online with a few other interested parties who found it to be valuable info, then they too are just too stingy, and home ownership isn’t for the prudent or thrifty.

BTW.. wouldn’t it be nice if the several years you referenced regarding the assessments wasn’t 10 or 20, like they are in reality.

[sandiego]

It is not $360 per month forever. It is a total of $8,640 ($360 x 24 months max). In addition, the RE taxes will be prorated in escrow so you won’t even pay a full portion of the first year. If you just picked up an REO at discount of 52% of its latest sales price ($270,000 in real dollars) and you are worried about $8,640 over 24 months, then homeownership is probably not for you.

Homeownership is full of “surprises”.

I used the term “several years” because I don’t know the age of the house or the term of the CFD/Mello Roos bond.

[sandiego]

It is not $360 per month forever. It is a total of $8,640 ($360 x 24 months max). In addition, the RE taxes will be prorated in escrow so you won’t even pay a full portion of the first year. If you just picked up an REO at discount of 52% of its latest sales price ($270,000 in real dollars) and you are worried about $8,640 over 24 months, then homeownership is probably not for you.

Homeownership is full of “surprises”.

I used the term “several years” because I don’t know the age of the house or the term of the CFD/Mello Roos bond.

[sandiego]

It is not $360 per month forever. It is a total of $8,640 ($360 x 24 months max). In addition, the RE taxes will be prorated in escrow so you won’t even pay a full portion of the first year. If you just picked up an REO at discount of 52% of its latest sales price ($270,000 in real dollars) and you are worried about $8,640 over 24 months, then homeownership is probably not for you.

Homeownership is full of “surprises”.

I used the term “several years” because I don’t know the age of the house or the term of the CFD/Mello Roos bond.

[sandiego]

It is not $360 per month forever. It is a total of $8,640 ($360 x 24 months max). In addition, the RE taxes will be prorated in escrow so you won’t even pay a full portion of the first year. If you just picked up an REO at discount of 52% of its latest sales price ($270,000 in real dollars) and you are worried about $8,640 over 24 months, then homeownership is probably not for you.

Homeownership is full of “surprises”.

I used the term “several years” because I don’t know the age of the house or the term of the CFD/Mello Roos bond.

[Author]

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