If you are a resident of a U.S. city, you probably wonder how it is that your government charges so much money on property taxes and local government services. While each city’s government is unique, there are several general facts about U.S. cities that you should know. The first thing you need to know is that U.S. cities have a very high property tax burden because they take on too many services. Even though the states have more general revenue funds than their cities, the cities always ask for more, and they get it.
Cities like New York, Los Angeles, San Francisco, Phoenix and Las Vegas are the most populous cities in the U.S., and they all have a lot of people. In each of these cities, the cost of living is very high and residents must pay a great deal of income and local government taxes to support their lifestyles. Only a small percentage of these cities actually raise their incomes at the same rate as the national average. That means the rich people who live here to contribute a greater percentage of the national income than everyone else – and that percentage is steadily rising. This means that all U.S. cities with the highest taxes and services will get even higher taxes and service expenses in the years to come.
This is not good news for the citizens of these cities. But, this problem can be solved. There is a very simple solution that most cities with the highest taxes and property taxes would do well to learn about. It is called property value index financing. Why is this better than property tax lien financing?
First, the valuation of the real estate is based on current market values, not future values. Second, this system provides a mechanism for owners of property to borrow against their home equity. Because the owners are borrowing against their equity, it is based on future income streams rather than current income streams. Third, this method does not require additional financing for any reason other than an increase in property values.
How do you apply this to cities with high property taxes? Just do what is mentioned above. Instead of applying traditional financing to property taxes, use the equity in your home (which you can tap into) to raise the money needed to pay the property taxes. In essence, you would be using the equity you have accumulated over the years to pay for property taxes. It makes sense and works really well and is the exact same financing system used by thousands of other cities with the highest property taxes around the nation.
So there you have it. There is no need to continue paying property taxes. They are already too high and they will never go lower. The best way to save them is to simply do what works in your city and pay your property taxes as a property value on an annual basis. That way, the money stays in your pocket and you have it to invest or give away. But of course, that is the subject of another article.