[cyanregiment]

I had the same fears but even the boomers sitting on million dollar homes are being called “cash poor”.

You still need an income. You can only refinance so much, and then you’re paying off interest.

If your home 10x’s in value so does your property tax. Some people are paying $1500/mo. in property tax. They need a job just to cover it.

You can’t sell the house and cash out because you need that cash to buy the next house without having a huge monthly payment.

It’s not enough to just own assets. They have to be capitalized upon in some way - having a renter, building a farm, storage, or other business with it, and so-on.

But nobody is really doing that. I think boomers thought they would get rich off the real estate and it’s not really happening. All it did was make prices out of reach for the average person.

Super wealthy are buying homes at inflated prices which is interesting and surprising but they’re largely not boomers.

Dynasties calling shots maybe, probably. But what’s new?

[loeg]

> If your home 10x’s in value so does your property tax.

This isn't how property tax works in many places (assuming you're talking about supply/demand constraint reasons and not individual property development, e.g. apartment building). There is an overall assessment being raised by the entity (e.g., county), and it is divided pro rata across property owners. In this system, if everyone's property goes up 10x, the amount they pay individually stays exactly the same.

[sokoloff]

> If your home 10x’s in value so does your property tax

If the entire city goes up 10x (without corresponding general inflation), you’ll likely find the tax rate goes down because most places tax property to fund government and few places would quickly swell the city budget by 10x.

[cortesoft]

> If your home 10x’s in value so does your property tax.

That depends on where you live. For example, in California we have Prop 13, which limits how much the assessed value for a home can increase without being sold.

This means that even if your house goes up 10x in value, California will only increase the assessed value for tax purposes by 2% each year.

[smhenderson]

It's similar where I am - a bank and a realtor might say a home is worth .5M but the tax man still assesses it at around 115K.

I bought my home over 20 years ago and it is worth much more than I paid on the market. Yet the value of the property for tax purposes is only 3K more than what I paid for it in 2002.

[deepsun]

Curiously, most homeowners, even recent ones, vote against changing that, because nominal value of the tax would go up for everyone, so we have the status quo.

But the solution I think should come out of the budget -- say, a municipal budget gets $100 today from property taxes, while recent homeowners pay $80 of that. If we just change the assessment rules to make it fair with long-time homeowners, then recent homeowners will pay $90, and long-timers will pay, say, $70. But budget only needs $100, not $160. So we can lower taxes at the same time as equalizing the assessment rules.

[Danox]

If you are of retirement age prop 13 saves you if you own your house and are on a fixed income and not a member of the 5%, because if it wasn’t for prop 13, the local municipalities would continue to jack up your property tax to the moon.

Prop 13 was passed through a statewide initiative process, because at the time the statewide politicians were never going do the right thing for retirees that managed to own a house.

Prop 13 is not necessarily a perfect solution, but since that time the politicians inside California or in other states are by and large incapable coming up with any other solutions that would benefit a larger body/group of people who own or are buying homes.

[tzs]

We've got a pretty good system in Washington for helping retired and disabled people not get taxed out of their homes.

• Applies to age 61+, age 57+ surviving spouse if the person who qualified dies, unable to work due to disability, or disabled veteran with a service connected rating of 40%+.

• Disposable income must be less than 70% of median county income.

• Your assessed value for property tax purposes is the minimum of the actual accessed value and the accessed value when you qualified for the program.

• You are exempted from paying one of the statewide school levies (there are two of them) and from paying "excess levies". Generally, "excess levies" are voter approved levies.

• If your disposable income is less than 60% of the county median household income you also are exempt from regular levies on min($70000, max($50000, 0.35 V)) where V is the assessed taxable value.

• If your disposable income is less then 50% of the county median household income the exemption from regular levies is max($60000, 0.60 V).

In my county those income levels are $65k, $56k, and $46k but are updated every three years and for 2027-2029 will be $93k, $81k, $70k. For a house with a tax of $3600, the tax as you go through those levels would be about $2200, $1900, and $1000 (or maybe it was $2400, $2200, and $1000...it was a while ago that I calculated it and I'm not sure which it was). (For King County, which is where Seattle is, the levels next year will be $101k, $89k, and $76k).

Disposable income is basically all your income, even if it is not taxable, with deductions for various medical things like drugs, in-home care and assistance, Medicare and Medigap premiums, and many others.

If your disposable income goes over the 70% threshold and you lose eligibility but it comes back down after one year and you reapply you get back your original frozen assessment. You can repeat this so you could qualify and get the frozen assessment and the exemptions, then alternate years in which you take a big IRA withdrawal which pushes you over and you pay tax that year based on your actually assessment and with no exemptions, then do a year with the frozen assessment and the exemptions.

[cyanregiment]

Should have just said “if value goes up 10x the tax increases” to keep it accurate.

The overall point stands though beyond that nitpick

[SoftTalker]

> I think boomers thought they would get rich off the real estate and it’s not really happening.

It would have if they had paid off their mortgages instead of borrowing against equity, refinancing and taking equity out, etc.

If you still owe 70-80% of your house to the bank when you retire, it's not really an asset.

[cyanregiment]

Exactly, it’s not enough to just own it. They find themselves tapping into that sweet equity.

You have to do something with the land even if it means improving your home, paving a road, to increase the value above and beyond the market trend - to live off of! Otherwise you’re a buyer (or borrower) again

[Danox]

Correct, you have to own the house outright which is the first step towards financial independence. Next step is having some investments if you’re lucky, fortunate at least a million-two million dollars above and beyond owning your house.