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UK council tax vs. US property tax

UK council tax vs. US property tax

Old Aug 18th 2016, 3:27 am
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Default UK council tax vs. US property tax

Hi everyone, our family recently moved from Surrey UK to San Diego California due to my husband's work relocation.

Just realised how expensive property tax here is compared to the UK while we are deciding whether to buy a house here. Back in Surrey we had a four bedroom house and the council tax costed about £120 per month. Here in San Diego if we buy a house say price about $500K and the property tax is around $7300 a year, which works out approximately $600 per month, that's equivalent to £460 a month!! Almost four times as much compared to the UK (£120) and that's only one month before you multiply it by 12 for the year! How ridiculous... Just wondering what's everyone else's experience on that and what are your thoughts on this? Why is the US property tax so much more expensive that of the UK?

As we are very new to this forum so I do apologise if this topic has been discussed a number of times before. Thanks!
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Old Aug 18th 2016, 3:36 am
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Default Re: UK council tax vs. US property tax

Depends where you are. A $500k house would be expected to attract about $2,500 in property tax here in NM. But I'm sure someone from the northeast will be along soon to tell you how good you have it.
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Old Aug 18th 2016, 3:45 am
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Default Re: UK council tax vs. US property tax

$400k house here is about $8000 a year, but if it was one county over it would be around $4000 a year. The US has high taxes, something people in the UK may not be aware of. Have you encountered "use" tax yet?
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Old Aug 18th 2016, 5:04 am
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Default Re: UK council tax vs. US property tax

Originally Posted by Mirage88 View Post
Hi everyone, our family recently moved from Surrey UK to San Diego California due to my husband's work relocation.

Just realised how expensive property tax here is compared to the UK while we are deciding whether to buy a house here. Back in Surrey we had a four bedroom house and the council tax costed about £120 per month. Here in San Diego if we buy a house say price about $500K and the property tax is around $7300 a year, which works out approximately $600 per month, that's equivalent to £460 a month!! Almost four times as much compared to the UK (£120) and that's only one month before you multiply it by 12 for the year! How ridiculous... Just wondering what's everyone else's experience on that and what are your thoughts on this? Why is the US property tax so much more expensive that of the UK?

As we are very new to this forum so I do apologise if this topic has been discussed a number of times before. Thanks!
Property taxes in CA are relatively high. However, you are protected by prop 13 for the size of future rises. Also, remember you're effectively paying those taxes through rent as well, even though it's the property owner who's actually paying them.

Imo, you can't look at one particular tax in isolation, but have to look at one's tax situation as a whole - income, sales/vat, property and gas taxes likely being the main components.
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Old Aug 18th 2016, 5:20 am
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Default Re: UK council tax vs. US property tax

Welcome to California !!

On my property tax bill you start with the basic 1% of the purchase price of your property then add on all the other taxes and fees which are mainly made up of voter approved bonds for the 'benefit of the community' ie. unified school bond, community college bond, health care tax, metro water charge.These alone add on nearly $1,800 to the basic charge.

Then you get fixed charge assessments: CSA radio equip (?), mosquito surveillance, vector disease control, fire protection special tax, etc etc.

Another $180

My sister who lives in Norwich has always been horrified by how much we pay in property tax in San Diego.

Unfortunately each time we have an election and there is a bond coming to an end, another one gets put onto the ballot and if it's for schools and education it always get approval for renewal.
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Old Aug 18th 2016, 6:18 am
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Default Re: UK council tax vs. US property tax

Welcome to SoCal. I really like San Diego.
The property tax in California is IMHO screwy.

We bought a place recently and mine is nearly $1000 a month as the tax is calculated at the sales price of the house and property prices are near the all time high.
Compare this with the guy next door who lives in a similar sized house but has been there 36 years. His house was worth peanuts back then compared to now and so his property taxes are mere hundreds a month as their taxes can only be increased by a small percentage year on year.

So you're not only paying for local services for you and your family, but also the people that have lived there for ages too. Even though they've been enjoying those facilities for many years, at a nice discount.

However I definitely feel I get waaaaay more out of my property tax here than I ever did in the UK for council tax. Back in the UK we had decrepit or non existent facilities, no local police presence, awful recreation options, oversubscribed schools and doctors, crappy road systems that were never maintained, litter, graffiti... I could go on. But where I am now is like paradise in comparison. And paradise costs!
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Old Aug 18th 2016, 7:48 am
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Default Re: UK council tax vs. US property tax

Originally Posted by Mirage88 View Post
How ridiculous... Just wondering what's everyone else's experience on that and what are your thoughts on this?
Cheap as chips. I used to pay 14K for a 450K property on Long Island.

Originally Posted by AdobePinon View Post
I'm sure someone from the northeast will be along soon to tell you how good you have it.
She has it good!

Last edited by Scott33; Aug 18th 2016 at 8:16 am.
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Old Aug 18th 2016, 8:11 am
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Default Re: UK council tax vs. US property tax

Originally Posted by Mirage88 View Post
Hi everyone, our family recently moved from Surrey UK to San Diego California due to my husband's work relocation.

Just realised how expensive property tax here is compared to the UK while we are deciding whether to buy a house here. Back in Surrey we had a four bedroom house and the council tax costed about £120 per month. Here in San Diego if we buy a house say price about $500K and the property tax is around $7300 a year, which works out approximately $600 per month, that's equivalent to £460 a month!! Almost four times as much compared to the UK (£120) and that's only one month before you multiply it by 12 for the year! How ridiculous... Just wondering what's everyone else's experience on that and what are your thoughts on this? Why is the US property tax so much more expensive that of the UK?

As we are very new to this forum so I do apologise if this topic has been discussed a number of times before. Thanks!

One of the things that put me off moving over there. While San Diego can be nice, house prices are crazy and if you've managed to save up for a house you are then punished with insane property taxes. The whole idea of buying a house is that you are one day mortgage free and don't have to pay rent. The property taxes alone will buy you a nice holiday home on the Costa Brava.


While parts of Europe might have problems too, it's nothing compared to what I've seen in many parts of California or San Diego, so the comment from Marc_ely that you get waaaaay more out of property tax in the US is not correct in my opinion.


I don't even pay $1000 for two homes including taxes, don't need police presence if there is no crime, never seen graffiti on walls here.
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Old Aug 18th 2016, 11:51 am
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Default Re: UK council tax vs. US property tax

But because it is a real estate tax you can deduct it in figuring your US tax liability each year; so you need to look at the after tax cost to you.
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Old Aug 18th 2016, 12:19 pm
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Default Re: UK council tax vs. US property tax

Originally Posted by Cook_County View Post
But because it is a real estate tax you can deduct it in figuring your US tax liability each year; so you need to look at the after tax cost to you.
True:
Homeowners who itemize deductions may also reduce their taxable income by deducting property taxes they pay on their homes. That deduction is effectively a transfer of federal funds to jurisdictions that impose a property tax (mostly local but also some state governments), allowing them to raise property tax revenue at a lower cost to their constituents.


Nevertheless it's still far too high.
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Old Aug 18th 2016, 12:33 pm
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Default Re: UK council tax vs. US property tax

Originally Posted by Mirage88 View Post
Why is the US property tax so much more expensive that of the UK?
Because different countries choose to collect revenue to pay for public services in different ways. The US estate/ inheritance tax is vastly different too, for example, with the first $5.45 MILLION being exempt from tax. FICA at 6.2% is different to UK NI rates of - what is it now, 12%? - and they pay for different services. Switzerland, where we used to live, has income tax along with an annual wealth tax of a (small) percentage of your entire net worth.

Direct one-off comparisons aren't really valid, even for things that appear as similar as an annual tax on living in a house. If you want to make a comparison, then add up your total tax load in each country, including VAT and sales taxes, capital gains, healthcare costs, etc and see how it pans out.
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Old Aug 18th 2016, 12:34 pm
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Default Re: UK council tax vs. US property tax

Originally Posted by Marc_ely View Post

However I definitely feel I get waaaaay more out of my property tax here than I ever did in the UK for council tax. !
Not sure about this perspective.

Wherever you live (UK, California, France, wherever...) you get the services you need from government. Doesn't really matter if the government is village, town, county, state, federal or even European Union or similar. Doesn't really matter if the tax is federal or local. In terms of your budget, it's all tax. So because of political realities, in the U.S. each successive level of government wants to pitch taxes as low as possible. So you end up paying more tax at the lowest level (school district, property taxes etc.) Then stupid fees for services (a dollar or two for this & that at the DMV) to make up for the shortfall in taxes. Then you pay for trash pickup, which in other places is covered by tax.

Further, you pay through the nose for healthcare, which in developed countries is often fully or partially covered by public funding - taxation.
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Old Aug 18th 2016, 12:37 pm
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Default Re: UK council tax vs. US property tax

Originally Posted by Marc_ely View Post
Compare this with the guy next door who lives in a similar sized house but has been there 36 years. His house was worth peanuts back then compared to now and so his property taxes are mere hundreds a month as their taxes can only be increased by a small percentage year on year.
Is that because of Proposition 13?

In my town they revalue the properties every 10 years. If you've made significant improvements to your house then your bill can easily double.
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Old Aug 18th 2016, 12:38 pm
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Default Re: UK council tax vs. US property tax

Originally Posted by kodokan View Post
Direct one-off comparisons aren't really valid, even for things that appear as similar as an annual tax on living in a house. If you want to make a comparison, then add up your total tax load in each country, including VAT and sales taxes, capital gains, healthcare costs, etc and see how it pans out.
Yes - we do this occasionally. Living in the US still works out to be a lower tax burden, despite our property tax being $7000 a year.
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Old Aug 18th 2016, 1:26 pm
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Default Re: UK council tax vs. US property tax

Originally Posted by kodokan View Post
Direct one-off comparisons aren't really valid, even for things that appear as similar as an annual tax on living in a house. If you want to make a comparison, then add up your total tax load in each country, including VAT and sales taxes, capital gains, healthcare costs, etc and see how it pans out.
In one way true, but just because VAT and sales tax are higher, doesn't always mean you are actually paying more for a product. In Ireland the VAT is 23%, but the shoes I bought were still €20 cheaper than back in Germany where you have 19%.


Of course other things are more expensive here but it's the way you tax. If taxes on your home are so high, you don't really have a choice apart from selling and downsizing and in places like California there aren't that many cheaper options when it comes to housing. In Europe taxes are spread out more, so you have the option to save in certain areas without losing your home when you're older. With a small pension, the US is a nightmare when you own a home and have to pay for health care.
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