Renters, Home Owners, and Hidden Taxes: Home owners and property taxes.

For home owners, property taxes do not seem to be a hidden tax because they get a bill, or an assessment, telling them how much they must pay.  Property owners live in the home they own, and they are also landlords who rent to others.


A little later on I will explain the hidden tax nature of property taxes specifically for renters.

First, I will show how property taxes make the cost of buying and owning a home more expensive for everyone, including the lower income members of society.

I will show how property taxes make it harder to show that you can afford the monthly payment needed just to buy a house and eventually pay off the mortgage.

Adds to cost of monthly mortgage payment.

If you talk to officers of banks and mortgage lending companies, they will introduce you to something known as P.I.T.I.

P.I.T.I. stands for Principle, Interest, Taxes, and Insurance.  The taxes portion includes property taxes.

These lenders use guidelines for what portion of your total monthly earnings is the maximum the average person can afford to pay toward P.I.T.I.

These guidelines are based on studies of perhaps many thousand or even millions people showing who did and didn’t have trouble making the required payment.

Well, property taxes is one of the four parts of the P.I.T.I. amount assessed both to home owners and the property owned by landlords.

This fact puts buyers in a position of using less of their money toward actually buying a home.  This is because some of the money is redirected toward paying a tax that is hidden from at least some consumers.

Property taxes are also assessed on and paid on the property that businesses operate out of.

This means that the customers of each business are paying the property taxes of that business, which is just one more hidden tax included within the prices business charges to customers.

Must be paid even after you get your mortgage paid off.

This topic is simple.  As long as government uses property taxes to fund any part of its activities, property taxes will be assessed and paid by property owners.

This means you will continue to pay a property tax even after you get your home loan (or mortgage) paid off so you otherwise own your home free and clear.

Your home can be taken away from you if you don’t pay your property taxes.

This topic is also simple.  When taxes owed to government are not paid, government is allowed to take steps to forcefully collect those taxes.  For property owners, your property can actually be taken away from you just to pay any unpaid property taxes.

Even after you have worked all those years needed to finally pay off that mortgage, so you own your home free and clear of any mortgage, if your income, perhaps a retirement income, isn’t enough to cover all your costs of living, including health care expenses, and pay your property taxes, you can still have your home taken away from you so government can collect this one tax, if you are not able to keep paying it.

Under a transparent tax system such as I am proposing, your paid for – no mortgage home that you own free and clear is also free of the current threat of being taken away from you to pay a tax.  Property taxes have the potential to increase your monthly cost of living during retirement years.

Thank you for taking time to read and ponder my opinion on this topic.
An Opinion Article by Dave Kemper
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It has been said that: "One definition of insanity is to do the same thing, the same way, over and over and over again, each time expecting to achieve a different result."
Therefore, we must either CHANGE the way we live, or we bind our future to our past as if with CHAINS.
"I do not consider myself to be better than anyone else.  But I do believe in exercising my right to not stay stupid."

David W. Kemper, Author
© Copyright 2014 by David William Kemper.  All right reserved
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