Question: I have been looking to buy in the area where I live for about a year now, financed I thought with my fiancee, but he changed his mind. I started looking on my own, and can get a much smaller home loan on my own,but did some research first. Where I live (some may know it, sewmaster for one) is one of the fastest growing areas in Ohio, both for upper scale housing suburbs, and business. Almost all of the schools in the area have those modular trailers for extra classes, and 3 new schools need to be built soon to try to keep up with the growth. I have been looking into areas north, just 10-15 minutes away, but really want to stay in the area. My friend at work got financed, and is looking to buy right in town. The sellers are willing to pay closing, give cash for unfinished updating, and help for down payment. She told me the taxes, insurance, and loan would all be included in her house payment. She is a single mother, making just a little more than I am. She felt like I was trying to scare her off, because I have not found a place yet. I feel that the taxes in this area are going to skyrocket in the next few years, and think she is making a major mistake. I decided to wait until I had a large down payment, but still will not buy in the town. The house she wants to buy is very small, she is actually looking at enlarging it when, or if she gets it. Am I being to cautious? I want a home also, but do not want to pay $2000 in taxes a year just to own it.(Less than 95,000 home)
Answer: I also live in Ohio. Does the area in question have a school income tax? If so, it’s less likely property taxes will skyrocket. Income tax may go up but that’s less of a burden at lower income levels than property taxes.
If property taxes are the primary school funding I doubt a house with a market value of $95k would be hit with a $2k property tax bill anytime in the near future. It will probably happen eventually but, in my area at least, you need to reach $140k or so to hit that level even in the higher tax areas that don’t have a school income tax.
If you don’t feel like the schools deserve additional funding you can also vote/lobby against any future levies.
A good source of details on these matters is your local county auditor’s web site.
Another reply mentioned homestead laws. In Ohio, I believe they only apply to low income senior citizens. There’s a 2.5% reduction for owner occupied houses that everyone can get. Ohio does take steps to proportionally reduce taxes as property values increase to prevent windfalls for taxing authorities. That’s done automatically.
In my opinion, if you can currently afford the house and really like the area I’d go ahead and buy. You can’t control the future anywhere. If things do really take off then your house would likely be much more valuable. You could sell it and put them profits into a house in a less expensive area.
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