The great state of California is not exactly well known for its management of money, despite being the 8th largest economy in the world. It can be daunting to think about just how many fees are associated with buying property here, especially considering how much your down payment will already be. We’ll look at property taxes not just here, but in comparison with other major cities and counties both in the state and the rest of the country.
How Much Will I Pay in Orange County Property Taxes?
Despite anything else you may hear, it will be difficult to budget for your property taxes. They’re due upon arrival, and while the base rate is 1% of the assessed home and land value (less exemptions), you’ll also pay different fees in addition to this depending on the area you live. All told, you’ll can see up to between 1 to 1.5% or so, but it is truly dependent on which area you pick in Orange County so you may need to budget for up to 2%. For example, the Community Facilities District Act or Mello Roos allows for special funding to go straight to local governments, and this would be a separate fee to city facilities like sewage.
Some people in the surrounding areas feel they can see exactly where their money goes as their neighborhoods improve around them with these extra fees, but some feel it’s just another way for the government to dig into their pockets. You can expect older parts of any neighborhood to abstain from paying Mello Roos fees, but it may be difficult to find these places in parts you want to live in as time goes by. As for the assessment value, you can expect there to be some subjectivity here considering it’s difficult to know what an ever-changing market will actually pay.
Regardless of a state’s official laws, you can always appeal your home’s value to the assessor if you think it’s far overvalued in relation to the reality of home buyer’s at the moment. Fortunately you can expect your home property value In Orange County to not exceed more than 2% in terms of property value from year to year (even if there is a huge real estate bubble) on the condition that you don’t do any major construction or improvements on the property itself. if you live in your home (as opposed to renting it out) you can deduct $7,000 off the home value as an exemption, but typically you’re not eligible for many other exemptions unless happen to run a not-for-profit business out of your home.
How Does This Stack Up?
In LA and San Diego, you can expect to pay about the same amount in property taxes as you do in the OC. Essentially if you want to live anywhere in Southern California, you’re not necessarily better off picking your area based on property taxes. You should do so based on which area appeals to you more. The good news is that there are so many different types of communities here that it would be hard not to find your new favorite town if you can live anywhere south of Santa Barbara. If you’re more open to living in the rest of the country, well Orange County looks positively cheap if you compare it to the suburbs of Chicago where you can expect to pay over 3%. In the city itself, it’s still above 2%. Even in a relatively cheap city like Cleveland, you can expect to pay about 2% or so, and even those rates are on the rise right now. In Seattle, it’s generally closer to 1%, but again they’re also subject to additional fees as well. Every city, county, and neighborhood reserves the right to tack on expenses when they deem necessary. Anything from school improvements to insect removals can all be part and parcel to your property taxes.
What Does This Really Mean?
As tempting as it might be to base your decision off of property taxes, just know that just because governments aren’t taxing you in one area, it doesn’t mean they’re not making up for it in other areas. Unless you’re an accountant, you’re probably not keeping track of just how much you fork over to the government every year so it can be hard to see. Whether or not you agree with how the money is spent or not, if you want to live in a nicer area you’re going to have to be prepared to pay for it. What you should be looking for is what the teachers are like at your child’s new school, and who exactly is hanging out at the parks. Exactly how are the streets and sidewalks kept up?
How does the neighborhood handle property owners who don’t keep up with maintenance on their land and home? Who exactly is your local mayor? If you live in a city like Irvine, you may end up paying up to 3 times as much for a home there as you would pay in Santa Ana. You can see the differences in the two neighborhoods in seconds flat. Irvine looks extremely well off with manicured lawns and homes everywhere, while Santa Ana looks much more run down. Many of the residents in certain spots of Orange County have been there for quite some time, and their homes reflect that. When you shop, try to keep in mind that you might need to go with the lower range of your budget in order to account for additional fees.
2 Point Highlight
Essentially if you want to live anywhere in Southern California, you’re not necessarily better off picking your area based on property taxes.
The good news is that there are so many communities that it would be hard not to find your favorite new town anywhere south of Santa Barbara.
