San Francisco: Real Estate Investment in Silicon Valley

San Francisco is one of USA’s legendary cities. It is immediately next to silicon valley, was the birthplace of hippies, and is one of the most important cultural hubs of the 20th century. This is reflected in the real estate market though. There are many reasons why San Francisco is considered to be one of the most difficult real estate markets to get into. Not to worry though, we give you the full rundown of where you should invest in this metropolis. First we take a short look at the economy and the general real estate market though.

Why is San Francisco Economically Successful – Major Industries, Prediction

San Francisco may have started its fame with the gold rush, but nowadays it is a tech mega-city. While a lot of the action takes place in Silicon Valley, there’s a massive number of tech startups starting out within the city limits as well. Another important sector is finance, with the largest porportion of employment in the city. Next are business services like consulting, retail, and of course tourism.

• New Technology
• Finance
• Business Services
• Retail
• Tourism

Where does San Francisco Rank in Cost of Living? Expensive Luxury with Culture

In the cost of living index published by Numbeo, San Francisco is ranked 4th (94,17), with New York being two spots ahead at an index score of 100,00. The average restaurant trip here will cost $19,00 and a loaf of bread $3,80. If you’re looking to move here, remember that basic utilities for a month cost $166 and the average internet plan $69. Not to worry though, as the average monthly salary is higher than elsewhere too, with $7.777 after tax landing in your pocket. If you want to see where San Francisco ranks, look at a few select cities below, with their index and rank in US cities:

• Hamilton, BE (147,00) – 1
• New York City, NY (100,00) – 2
• San Francisco, CA (94,17) – 4
• Los Angeles, CA (81,31) – 15
• Miami, FL (77,98) – 25

Rent Index – Does San Francisco have the Highest Rent?

It is also possible to look at the rent index. This gives information about the relative price of rent. Considering that San Francisco is considered by many to be the most expensive city to rent in, it’s no surprise, that they rank first in the most expensive city for renting. This also demonstrates the unique position which San Francisco has, where its cost of living generally is not higher than other cities, but its rental price is. Take a look at the ranking below:

• San Francisco, CA (116,48) – 1
• New York City, NY (100,00) – 2
• Hamilton, BE (94,98) – 3
• Los Angeles, CA (75,17) – 10
• Miami, FL (62,01) – 16

San Francisco Views – Drone Flight

San Francisco is obviously most well-known for the Golden Gate Bridge. It has so much more beauty though, and this is captured by drone in the video below.

Real Estate Investment: High San Francisco Real Estate Inventory

Real estate in San Francisco is legendary. Not always in a positive way, but legendary nonetheless. From impossibly luxurious apartments, to the infamous rowhouses on its hills, and impossibly high rent, this real estate market has it all.

Real Estate Prices San Francisco – Overview

If you’re looking at investing in real estate, you can expect to pay an average of $14.485 per square meter in the city centre. Outside the city centre it’s less, but still a strong $9.989. Comparing that to a rental price of $3.224 for a 1-bedroom apartment, or $7.100 for a 3-bedroom.

• $14.485 per Square Meter
• $3.224 for 1-Bedroom Apartment

San Francisco Real Estate Market Guide – Is it a Good Time to Buy in the Bay Area?

In January of this year, the amount of sales were 67% higher than in the year previous. A remarkable increase. This is likely not going to continue increasing as heavily, but it is indicative of the positive change in the Bay Area. What’s important is that the San Francisco real estate market is incredibly complex, with prices varying quickly, and by location. At the moment the market is marked by very high inventory, and low sales. That means it is a good time to buy in San Francisco at the moment, especially single-family residentials!

• Yes, right now is a good time to buy, with low prices thanks to many houses being on the market

Most Expensive, Cheapest Neighbourhoods in San Francisco – Real Estate Prices

The most expensive real estate in San Francisco can be found generally in the North of the city. These are places like Presidio heights, Cow Holow, and Russian Hill. Central San Francisco is home to a broad range, with e.g. Ashbury Heights being among the most expensive, while Monterey Heights ranks lower. The cheapest can be found in Southeast San Francisco (Visitacion Valley, Bayview, or Silver Terrace).

The Top 5 Most Expensive Neighborhoods in San Francisco – Real Estate

If you’re buying a house, the most expensive place to do it is in Presidio Heights, with a median sales price of $7.350.000. Next up is Pacific Heights with a median sales price of $5.600.00, and Sea Cliff at $4.672.500. The full ranking of the top 5, by median sales price is below:

1. Presidio Height – $7.350.000
2. Pacific Heights – $5.600.00
3. Sea Cliff – $4.672.500
4. Cow Hollow – $4.296.000
5. Russian Hill – $3.850.000

Top 5 Cheapest Neighborhoods in San Francisco – Real Estate

If you’re looking for something a bit more affordable, but still in vicinty to the city, you’re still going to be forking out the cash. The cheapest area in San Francisco is Hunter’s Point, where you will still be paying around $825.000 for a house. Next up are Visitacion Valley ($910.000), Bayview ($920.000), and Oceanview ($935.000). The full list, from cheapest to more expensive below:

1. Hunter’s Point – $825.000
2. Visitacion Valley – $910.000
3. Bayview – $920.000
4. Oceanview – $935.000
5. Bayview Heights – $937.000

San Francisco Taxes – Property Taxes, Real Estate

San Francisco taxes are a complicated matter. It of course depends on if you’re in San Francisco County or San Mateo, and many more issues. Let us take a deep dive into San Francisco taxes, and what you can expect to pay.

San Francisco Tax Rates – How much Taxes do you Pay in San Francisco

In general the state of California has income tax rates between 1% and 12,5%. Also, for large businesses, the city of San Francisco has an additional tax for expenses of large businesses. This is a 1,5% gross receipts tax on payroll expenses. Additionally, in San Francisco there is a total sales tax of a massive 8,5%.

• Income Sales Tax: 1%-12,5%
• Sales Tax: 8,5%

San Francisco Property Tax Rates – California Rankings

California property taxes aren’t simple. In California, the average rate of property tax is 0,77%. Each county has their own regulations and expenses, therefore it is important to also look at the amount you will pay in San Francisco County. Here, the average property tax is 0,65%, compared to Los Angeles at 0,75% or the neighboring San Mateo County at 0,66%.

• Avg. US Property Tax – 1.1%
• Avg. California Property Tax – 0,77%
• San Mateo County – 0,66%
• San Francisco County – 0.65%

Interested in property taxes in California? Our full article on the matter should be interesting to you:

• California Property Taxes

SoMa to Ashbury: Top San Francisco Neighborhoods

There are too many neighborhoods to remember. Here we present the most important, hottest, and up-and-coming neighborhoods to keep in mind. Our top San Francisco neighborhoods for real estate are:

1. SoMa
2. Union Square
3. Sunset District
4. Nob Hill
5. Haigh/Ashbury
6. Pacific Heights

SoMa – Downtown Hub

This downtown San Francisco neighborhood is massive. If you’re looking for real estate, it’s a great catch though, South of Market (or SoMa for short) is still affordable. This is also in part due to the upcoming Central SoMa project which will create thousands of housing units and jobs.

Union Square – Lively, Exclusive City-life

Union Square is the pulse of the city, surely being among the liveliest and most exclusive parts of the city. Don’t forget luxurious shopping opportunities and swaths of hotels, restaurants and art galeries. It may be home to many tourists, but also to some of the best streets in the city

Sunset District – Suburban Dream

Sunset district is a massive neighborhood, in terms of space as well as population. It is the suburbia which many young American families are looking for. There are many schools and universities, it is safe, and with an unemplyment rate under 3%, it is also a financially healthy area. Not to forget are also the many parks, which make taking a stroll here a pleasure.

Nob Hill – Elegance and Style

While Russian Hill is still bustling with tourists due to nearby Ghirardelli Square, Aquatic Park and Lombard Street, Nob Hill is the elegant, exclusive side of San Francisco. This is the SoHo of San Francisco. Four of the best hotels reside here (Big 4), Grace Cathedral (a replica of Notre Dame, Paris) and beautiful parks, such as Huntington Park with the wonderful fountain of the tortoises.

Haight/Ashbury – Still in?

Haight Ashbury is still one of the hottest parts of the city. The former birthplace of the flower power movement, where legends such as Janis Joplin and Jimi Hendrix lived, is still the center of the alternative and creative scene in the USA. Here you can find many cafes and restaurants frequented equally by students, neo hippies, families and tourists. Although many expensive boutiques and high-end vintage stores have settled here, the flair as a former hippie stronghold is still palpable.

Pacific Heights – Best Quality of Life in San Francisco

When it comes to the quality of life, you can’t do better than Pacific Heights. This neighborhood is always described as the most expensive and exclusive part of the city, and for good reason. All around, there are unbelievable views of the coast. It is even home to what is called Gold Coast, one of the most expensive areas in the US inhabited by San Franciscos billionaires. For a more affordable area than gold coast, consider Western Addition which shares the luxurious atmosphere, without the sky-high prices.

Der Beitrag San Francisco: Buy Property! Neighborhoods to Invest – The Mission, Nob Hill, SoMa, Co. erschien zuerst auf ℄ Real Estates.

Paying to get Money Loaned

You pay off real estate by getting a mortgage. On this mortgage you have to pay interest No other country has mortgage interest rates as high as Argentina. Paying off a mortgage here means an uncomfortable 41.11% mortgage interest rate. In Finland, this is much more affordable with a manageable 1.42%. Before delving into mortgage interest, we explain shortly what a mortgage itself is.

• Highest mortgage interest: Argentina – 41.11%
• Lowest mortgage interest: Finland – 1.42%

Mortgage Definition & Explanation

A mortgage is a type of loan. That means it is a sum of money which a lender pays on behalf of a borrower. A mortgage is a loan which is used to pay off property. The borrower is required to pay the money which they borrowed back, but not as a lump sum, but rather in rates. This means that e.g. as opposed to paying 1 mil. in one transaction, the borrower can pay 10.000 every month for 100 months. On top of this though, the lender typically requires interest, which is a percentage of the total loan which the borrower must pay on top of the rates.

Curious about the details of mortgages? Our easy to understand guide explains everything you need to know:

• Mortgages Explained Easily – How-to, Easy Guide

Mortgage Interest – What is it?

Interest is a price which you pay for the service and risk of someone loaning you money. Mortgage interest rates are expressed as annual payments, and are e.g. 5%. That means that every year you will pay an additional 5% of the total loan amount to the mortgage lender.

How do Mortgages Work?

Who pays less on their mortgage? Which mortgage works for who? There are certain characteristics which make some people more attractive as borrowers to the lender, these people then have to pay less mortgage interest than others. These can be understood simply with the rule of thumb, the more you pay at the point of closing, and the less of a risk you are to the lender, the lower the interest rate will be. The following factors mean you pay a lower mortgage interest rate

• Higher loan orgination fee
• Larger down payment
• The property is a private residence
• Better credit score

APR or Interest Rate? Meaning Explained

What is the difference between APR and interest rate? Interest rate is the annual cost of the loan itself, while APR is the annual cost to the borrower, including fees and other charges on top of the raw percentage rate. This is so that the borrower is cleared up about exactly how much the loan is costing them. It is based on the Federal Truth in Lending act.

• Interest rate is the annual cost of the loan itself
• APR is the annual cost to the borrower

Calculating Mortgage Interest: Formula

How do you calculate mortgage interest? You will receive a mortgage interest rate or an APR, as explained above. This is an annual rate, but you will have to pay it monthly. As an example, we take a loan of $500.000 with an APR of 5%.

Loan Amount x Rate = Annual Payment

$500.000 x 5% = $25.000

Every month you will have to pay this amount divided by 12 (for the 12 months in the year). That means that in order too budget properly, you will need to calculate this as well. So, how do you calculate your monthly mortgage interest?

Annual Payment / 12 = Monthly payment

$25.000 / 12 = $2.083

Wondering about what you have to pay when buying a house? There are too many additional costs to name here, but we’ve summarized everythign you need to know

• All Additional Costs when Buying a House

Types of Mortgage Interest

When choosing your mortgage, you will have to decide between fixed-rate and adjustable rate. These differ significantly, and it is therefore very important to undersstand the advantages and disadvantages of each.

Fixed Rate vs. Adjustable Rate

Fixed-rate loans and adjustable rate loans (also called adjustable rate mortgages) differ in the variability of interest rate, as the name states. That means fixed-rate loans incur the same interest over the whole period of the loan, while adjustable rate loans incur a rate which is set to change across the lifespan of the loan.

The first, fixed rate loans are attractive because there is safety. The interest rate will not change, and therefore budgeting and planning is easy. Typically fixed rate loans are more expensive at the outset than adjustable rates. Additionally, fixed rate loans are designated by time period. The most popular time frame is a 15-year fixed rate loan. That means the borrower pays back the loan and the same interest rate over 15 years.

Second, adjustable rate loans, are attractive to start with, because the rates are lower. Yet, because they can change, borrowers can be surprised that the interest rate increases over time. These also usually begin with e.g. 5 years of a fixed rate, after which the rate begins to vary.

Mortgage Interest Comparisons: Where is Interest Highest?

There are a few top destinations for real estate investments, to know where it is financially viable to invest, and where the rates are high, we have cherry picled some important destinations. Further down is the full list of mortgage interest rates worldwide ranked.

USA – Land of Investment

New York or Los Angeles? What a choice. In the USA, you have a fairly high average mortgage interest rate of 4.9%. But thankfully it’s not difficult to Save on Real Estate Taxes. 4.9% is much lower than many other countries, including its neighbour Mexico, with 11.1%, but more than its other, Canada which has an average rate of 3.6%. Its massive standing worldwide means this is a place where investment is always attractive, and its unlikely to break down into a null market any time soon.

4.9% – Rank 67

• GDP: $20,54 bil.
• Pop: 327,2 mil.

Germany – Consumer Protection

Another country popular for property investment, Germany has a low low average mortgage interest rate of 1.88%. This ranks it the 9th lowest worldwide. With a growing economy, and home to cultural hubs such as Berlin, shopping and fashion centers like Dusseldorf, or new tech monsters like Cologne, its no surprise this is a growing market where many are looking to invest.

1.88% – Rank 95

• GDP: $3,95 bil.
• Pop: 83,02 mil.

Germany has a very different system for real estate, law and mortgages. Our article covers everything you need to know:

• German Real Estate Explained

United Kingdom – History and Power

The home of the Queen, Big Ben, and Stonehenge. There’s much to see here in what was once the world’s foremost power. No countries boast as long a tradition of power and money as the isles weest of Europe. Its average mortgage interest rate is 3.20%, among the lower rates worldwide, and lower than the United States.

3.20% – Rank 79

• GDP: $2.86 tril.
• Pop: 66,65 mil.

Mortgage Interest Worldwide – Full Ranking

Below the full list of countries worldwide where a mortgage interest rate (or comparable) exist. These are ranked from highest rate to lowest. As you can see, mortgage interest rates are highest in Argentina, Iran, Uzbekistan, and Ukraine. Also note that for a different time span, interest rates will be very different. These depart heavily from the average in the USA, which is 4.9%.

The ones listed below are for a 20 year plan with a fixed rate. Nonetheless, they give an accurate overview of where these rates are high or low.

• Argentina – 41.11 %
• Iran – 20.84 %
• Uzbekistan – 20.15 %
• Ukraine – 19.22 %
• Nigeria – 18.50 %
• Turkey – 15.57 %
• Sri Lanka – 14.66 %
• Kenya – 14.56 %
• Kazakhstan – 14.55 %
• Pakistan – 14.05 %
• Belarus – 13.95 %
• Egypt – 13.48 %
• Paraguay – 13.38 %
• Dominican Republic – 12.62 %
• Nepal – 11.74 %
• Colombia – 11.47 %
• Georgia – 11.41 %
• Armenia – 11.30 %
• Bangladesh – 11.21 %
• Mexico – 11.10 %
• Honduras – 10.92 %
• Ecuador – 10.73 %
• Indonesia – 10.29 %
• Russia – 10.25 %
• South Africa – 10.23 %
• Costa Rica – 9.69 %
• Brazil – 9.66 %
• Peru – 9.64 %
• Moldova – 9.39 %
• India – 9.25 %
• Vietnam – 9.17 %
• El Salvador – 8.93 %
• Tunisia – 8.91 %
• Iraq – 8.86 %
• Bolivia – 8.65 %
• Azerbaijan – 8.48 %
• Jamaica – 8.33 %
• Uruguay – 7.83 %
• Jordan – 7.82 %
• Guatemala – 7.79 %
• Palestine – 7.67 %
• Philippines – 7.61 %
• Lebanon – 7.08 %
• Montenegro – 6.63 %
• Algeria – 6.34 %
• Bahrain – 6.32 %
• Trinidad And Tobago – 6.30 %
• Kuwait – 5.99 %
• Iceland – 5.96 %
• Romania – 5.86 %
• North Macedonia – 5.53 %
• Panama – 5.42 %
• Thailand – 5.41 %
• Morocco – 5.34 %
• China – 5.15 %
• Albania – 5.12 %
• Hungary – 4.98 %
• Qatar – 4.78 %
• Oman – 4.71 %
• Greece – 4.67 %
• Kosovo (Disputed Territory) – 4.66 %
• Poland – 4.48 %
• Malaysia – 4.44 %
• New Zealand – 4.39 %
• United Arab Emirates – 4.27 %
• Saudi Arabia – 4.21 %
• United States – 4.19 %
• Bosnia And Herzegovina – 4.14 %
• Malta – 4.07 %
• Croatia – 4.02 %
• Serbia – 4.01 %
• Chile – 3.92 %
• Australia – 3.92 %
• Bulgaria – 3.84 %
• Israel – 3.62 %
• Ireland – 3.58 %
• Canada – 3.55 %
• South Korea – 3.44 %
• United Kingdom – 3.20 %
• Slovenia – 3.18 %
• Cyprus – 2.97 %
• Norway – 2.89 %
• Sweden – 2.75 %
• Czech Republic – 2.68 %
• Latvia – 2.67 %
• Hong Kong – 2.57 %
• Estonia – 2.52 %
• Lithuania – 2.40 %
• Singapore – 2.38 %
• Spain – 2.35 %
• Portugal – 2.28 %
• Netherlands – 2.24 %
• Austria – 2.07 %
• Italy – 1.94 %
• Germany – 1.88 %
• Taiwan – 1.84 %
• Belgium – 1.81 %
• Denmark – 1.69 %
• France – 1.56 %
• Slovakia – 1.54 %
• Switzerland – 1.52 %
• Japan – 1.47 %
• Finland – 1.42 %

Der Beitrag Mortgage Interest – Explained Easily, Worldwide Comparison + More erschien zuerst auf ℄ Real Estates.

Mortgage Tax – Taxing your Home Loan

In some U.S. states you are required to pay a tax on closing a mortgage. This is one of the most important closing costs for real estate purchases. For this reason it is a one-time payment when closing the mortgage. There are many names for this, from mortgage recording tax, to just simply mortgage tax. It is the buyer of a home who is required to pay a mortgage tax. Mortgage taxes can also vary within states, counties, and across cities.

Mortgages are complicated. We explain them easily

• Mortgage Explained – Meaning, How-to, Guide

What is a Mortgage Tax

This tax exists to document the transaction which takes place when closing a mortgage. It is constructed of a percentage of the amount of debt being secured as a result of the creation of debt. It is a state-based tax, and is paid towards the locations where the mortgage is documented and recorded. In Minnesota, there is an additional tax in some counties, the “environmental response fund tax”. The 7 states which require a mortgage tax are Alabama, Florida, Kansas, Minnesota, New York, Oklahoma, and Tennessee.

Mortgage tax is not the same as property taxes, or as mortgage interest.

How is Mortgage Tax Calculated?

Each state has a mortgage tax rate. The mortgage rate is easily calculated by multiplying the rate in the location of the property (make sure to take into account state and county regulations!) by the amount which is in the mortgage. Also, make sure to take into account that mortgage taxes are rounded up.

E.g. in New York State, there is a mortgage tax rate of 1.05%. That means closing a mortgage in New York costs USD$7.500, given the rate of 1.05% and a mortgage worth USD$500.000.

Mortgage Tax Payment = Mortgage Tax Rate x Total Mortgage Amount

It is possible to reduce the mortgage tax by “assignment transferring”. In a nutshell, the loanee takes the assignment of loaning the mortgage to a new company, here the original tax is transferred, and therefore does not have to be paid.

Want to find out more about saving on your real estate tax bill?

• Real Estate Tax Deductions USA – How to Save

List – Mortgage Taxes by State

There are seven states which require a mortgage tax. These may be called different names, but are all the same construct.

New York

• Name: Mortgage Tax
• Rate: 1.05%
• Exemption: Possibility of $30 if the relevant “property is, or will be, improved by a one or two family dwelling.”

Alabama

• Name: Mortgage Tax
• Rate: 0.15% (.15 per $100, total mortgage amount rounded up to the next highest $100.00)

Oklahoma

• Name: Mortgage Tax
• Rate: 0.10% (+ $5 certification fee)

Minnesota

• Name: Mortgage Registry Tax
• Rate: 0.24% (+ 0.01% Environmental Response Fund Tax in Hennepin and Ramsey Counties)
• Exemptions include contracts for deed, certain agricultural mortgages, marriage dissolution decrees, and certain low- and moderate-income housing mortgages.

An oceanside house surrounded by palms and beach in Florida.

Florida

• Name: Documentary Stamp Tax
• Rate: 0.35%
• Late penalty: 10% + increasing monthly interest rate

Tennessee

• Name: Mortgage Tax (part of “recordation tax” which includes realty transfer tax)
• Rate: 0.115% (does not apply to the first $2.000 of the debt)

Kansas (Until 2019)

• Name: Mortgage Registration Tax
• Rate: 0.26%
• Since 2019, you no longer pay mortgage registration tax in Kansas

Der Beitrag Mortgage Tax – Everything to know Explained, Tips, How-to, More erschien zuerst auf ℄ Real Estates.

Taxes when you Buy a Home

Your city, county or state may levy a Transfer Tax, which is a transaction fee for the sale of each property. It is one of the many additional costs accompanying the purchase of real estate. Depending on the location, either the seller or the buyer may be responsible for making this payment. The rate varies depending on the location. In the U.S., this variation takes place across states, across types of real estate, and across county and municipal borders.

“A real estate transfer tax is imposed upon the privilege of transferring title to, or beneficial interest in, real property.” – Civic Federation

Transfer taxes are are controversial, with many supporting it for being an effective method to increase state income with rare and comparatively small amounts. They are criticised for being regressive (i.e. disproportionately affection lower-income households), because they are unpredictable and difficult to understand, among other reasons. The National Association of Realtors has taken an official position against this tax.

Mortgage taxes are one of three taxes when buying real estate. The other two can be found here:

• All Taxes When Buying Real Estate

What is a Transfer Tax?

A transfer tax is a tax which is paid for transferring the title of a property from the seller to the buyer. This falls into the category of ad valorem taxes. Transfer taxes are usually based on the cost of the property when being sold. In other words they are a tax on the sale of the home. Some states describe it as a fee for the work which is necessary to perform the documentation of the new ownership.

Different names for transfer taxes (or very similar taxes) are real estate transfer tax, deed transfer tax, documentary stamp tax (in Florida and Pensylvania), real property conveyance fee (Ohio), real estate conveyance tax (Rhode Island), deed recording fee, and real estate excise tax (Washington State).

Who Pays the Transfer Tax?

In most cases, it is conventional for the seller to pay the transfer tax. Nonetheless, this number often becomes part of the negotiation process. Additionally, because there is no law stating that the seller must pay the tax, this is variable. If the seller is exempt from paying a transfer tax, the buyer is then forced to do this. Sometimes, such as in Washington DC, the tax is split 50/50 between seller and buyer.

What are the Different Tax Structures?

Taxes differ not only in their amount, but also in their structure. One popular tax structure is a straight percentage of the sale price, for example 4,5% in Pensylvania, or 4% in Delaware. These percentages give the amount which the seller or buyer must pay the state. 4,5 % in Another structure is Arizona’s flat fee of $2. Or in New York State, a tax rate of $2 per $500 of a home’s sale price. On top of this though, the so-called mansion tax, of 1% on the selling price when the price is larger than $1 mil. In practice, for example in New York City, the transfer taxes you have to pay can reach 2,6% of the selling price.

While most use a percentage of the selling price, this is not always the case.

How much is the Transfer Tax?

Thankfully, unlike your mortgage interest, you won’t have to pay transfer taxes more than once. Transfer taxes are incredibly difficult to calculate, being influenced by state, county, and city laws, as well as additional structuring. Most homebuyers will leave this for their realtor or another agency to calculate. The lowest transfer tax in the U.S. is in Colorado at 0,01%. Meaning that if you buy a house for $1 mil., either the seller or the buyer would pay $100 to the State of Colorado. Another example is the 4% in Pittsburgh, where a purchase of a 1 million dollar home translates to $40.000.

If you choose to buy a property in Los Angeles, you can examine the California tax rate. This is 0.01%, meaning a $1 mil. house requires $100. Yet this does not take into account municipal and county taxes. Municipal transfer taxes in L.A. are 0.45%, and county transfer tax rates in Los Angeles 0.11%. Effectively, buying a 1 mil. house in Los Angeles means $540 of transfer tax.

In California, a $1 mil house = $100 transfer tax

In Los Angeles, a $1 mil house = $540 transfer tax

When do you not have to pay a Transfer Tax?

You do not have to pay a transfer tax when…

• Transfers to children and grandchildren
• Tansfers based on a lawful divorce
• Transfers to co-tenants after the death of one of the parties
• Transfers of cemetery plots

Are Transfer Taxes High in the U.S.? Country Comparison

Generally, the U.S. does not have a very high transfer tax compared to other countries. One comparison found that, on average in the U.S., the property transfer tax is 0,6% on high-value properties. This is almost nothing compared to Belgium (11,3%) or Germany (5,3%)

• Belgium – 11,3%
• Germany – 5,3%
• United Kingdom – 3,5%
• Canada – 1,8%
• U.S.A. – 0,6%
• New Zealand – 0,0%

What States do not have a Transfer Tax?

Additionally, not all states have transfer taxes. In these states, no forms of transfer taxes exist. Some states though, such as Colorado or Kentucky, do not have state transfer taxes, but local transfer taxes. Finally, other taxes may also exist though, such as a mandatory local transfer tax with local rate options. Below the states that do not have transfer taxes at all.

• Montana
• Utah
• Indiana
• North Dakota
• Alaska
• Missouri
• Mississippi
• Louisiana
• Oregon
• New Mexico
• Wyoming
• Idaho
• Kansas
• Texas

Transfer Taxes

These hidden fees can often come as a shock to homebuyers. Yet they are important to keep in mind. There are many more of such taxes and fees which often go under the radar. Not so secret, and a hassle for many, the ever so complicated property taxes. Check out our article for a breakdown of property taxes, where it is most expensive to own property, and what exactly is taxed in property tax.

These are just some of the ins and outs to know for real estate taxes. To learn how to save more, read

• Real Estate Tax Deductions – Everything to Know

Der Beitrag Real Estate Transfer Tax – Hidden Additional Cost Explained erschien zuerst auf ℄ Real Estates.

Paying Because I Own Something!?

Property taxes are levied on land, buildings and for example a boat or lift. Property taxes are a fairly broad category. These are generally considered to be too low by the academic community, and there have been increased calls to increase property taxes, as they are an equitable, and non-damaging form of revenue for the government. Property taxes are levied once a year, as with other taxes, on the 15th of April.

Property taxes also have to be paid in advance when buying real estate. Learn more:

• All Taxes When Buying Real Estate

Property Taxes When Buying or Selling a Home

As property is rarely sold on the day where taxes are recorded, it is often a quite complicated manner to decide who pays what. The IRS will not check who pays the taxes, as long as the required amount is paid. The way this is usually handled is that when a house is sold, the seller, upon purchase, will pay for the entire year in advance. The buyer, then simply hands over his pro rata share. There is such thing as a transfer tax though, which should not be disregarded.

What Items are Taxed in Property Tax?

Property tax is often confused as being a tax on real estate property. Yet this is a misconception. The largest proportion of property taxes come from real estate, because this is the most expensive property most people own. Yet property taxes can also be levied on airplanes, computers, furniture, etc. Additionally, property taxes do not only consist of the house or building itself, but also the land, and any other item which is permanently attached. This means that wharves for example are also taxed in the property tax.

How much is Property Tax?

Property taxes are considered ad valorem taxes, meaning that it is based on the monetary value which is estimated to be attached to an item, piece of land, property, etc. The property appraiser provides the basis for calculation. This is based on the estimate of how much it would be to purchase this item in that year, which is oriented on the market value, location, condition, area, etc.

Usually there is a tax rate for the specific location which is influenced by local, state, and federal laws. This tax rate is multiplied by the assessed cost or value of the property. For example, paying for a piece of land which is worth $100.000 in California, where the property tax rate is 0.77%, you pay $770 to the tax authority.

In California, property worth $100.000 = $770 property taxes

Due to many different forms of tax structures, there are many factors which come into play depending on where the taxed item is located. This is why, when comparing tax rates, the “effective tax rate” is used, which takes into account factors which come into play for normal items.

U.S. Citizens Pay What?

In the U.S., each person pays $1.617 in property taxes a year. The state which pays the most property taxes is New Hampshire with $3.307. Meaning that the average person in New Hampshire pays $3.307 in property taxes a year. The state where people pay the least property taxes is Alabama. In Alabama, the average person pays $582 in property taxes.

• On average, Americans pay $1.617 in property taxes a year

Property Taxes Country Comparison

Different countries differ in their property taxes. With some countries requiring very little, and others a lot. Worldwide though, experts agree that in general property taxes are too low and the tax rates should be increased in developed countries.

Meaning that this takes into account the strength of the economy, and how much the property tax is compared to this economic strength.

Interested in Real Estate Taxes? Read our Article

• All Real Estate Taxes Explained

Does the U.S. have a High Property Tax Rate?

No. The effective property tax rate in the U.S. is 1.11%, lower than in most other developed countries. Again, this number is difficult to compare to taxes from other countries, as other coountries use different systems, and therefore, e.g. tax land and real estate separately. E.g. in France, where property taxes are 21.88%, called la Taxe Foncière. Yet this 21.88% is a percentage of half of the possible rental value, and there is an additional Taxe Habitation which individuals pay to live on the property.

Nonetheless, the property tax in the U.S. is quite low. In comparison, these are the rates in other countries:

• Germany: 0.26%-1.00%
• U.K.: 0%-5%
• Mexico: 6.5%
• Belgium: 1.25%-2.5%

Property Tax Rates by State

All states have a property tax. All states differ in what the average effective property tax rate is, how this is calculated, and what other factors come into play. On average, the cheapest property tax rate is found in Hawaii, with 0.30%. That means for an item of $100.000, you pay just $300 in property tax. This is just 70% less than the average U.S. state. California has a property tax rate of 0.74%, also low compared to the national average. Meanwhile, property tax on a house in Florida is $9.400 given its tax rate of 0.94% and a house worth $1 mio.

Lowest property tax rates: Hawaii, Alabama, Louisiana

Highest property tax rates: New Jersey, Illinois, New Hampshire

California – Destination Celebrity

California is a dream destination. For people from all over the world it represents the American dream, beach lifestyle, bathing in the sun with a cocktail in hand. Home to Hollywood, but also Silicon Valley, this is a state where things are happening. In Los Angeles County, the median property tax is comparatively low, slightly higher in Orange County, with San Diego County the lowest tax rate of the largest counties. Average property tax rate in California is at 0.74%.

• Property Tax Rate: 0.74%

In California, it is important to distinguish real property and personal property. Personal property is taxed differently than real property, and can be exempt from taxation, or have a different type of taxation.

Full Article: Property Tax How-To – California

Florida – Investment in the Sunshine State

Florida’s property taxes are considered quite high, yet they fall below the average for the USA, at 0.94%. In Florida, the majority of property tax are used for citizen support measures such as protective services, first responders and law enforcement. Other agencies include payment of other municipal employees, citizen services like garbage collection, and recreational services. Property taxes in Florida only apply to real estate.

• Property Tax Rate: 0.94%

The number one way to save money on property taxes in Florida is via the homestead exemption. This is a way to save up to $50.000 on the appraised value of a home.

Full Article: Property Tax How-To – Florida

New York – Penthouse or Villa?

New York’s property taxes are some of the highest in the country. With the top 5 highest property tax rates in the USA, finding home in New York State. This, despite New York City’s five boroughs having an average property tax rate 0.86%.

• Property Tax Rate: 1.40%

In New York State, property taxes change from year to year, depending on the needs of the state. Additionally, it is also complicated by the fact that tax rates are constructed in millage rates as opposed to tax rates.

Full Article: Property Tax How-To – New York

Property Tax Special! How to Write off Property Tax!

It’s possible to pay up to $10.000 less property tax if you do it right! You just need to follow the steps and deduct the right things from your bill. You can deduct the property taxes from everythign from land to boats and more! Just read our quick article on the topic!

Write off Property Tax

Property Tax List by State

These are the effective property tax rates per U.S. State in alphabetical order.

• Alabama 0.40%
• Alaska 1.02%
• Arizona 0.67%
• Arkansas 0.64%
• California 0.74%
• Colorado 0.56%
• Connecticut 1.70%
• Delaware 0.58%
• Florida 0.94%
• Georgia 0.92%
• Hawaii 0.30%
• Idaho 0.75%
• Illinois 2.05%
• Indiana 0.87%
• Iowa 1.50%
• Kansas 1.33%
• Kentucky 0.82%
• Louisiana 0.52%
• Maine 1.27%
• Maryland 1.04%
• Massachusetts 1.15%
• Michigan 1.44%
• Minnesota 1.11%
• Mississippi 0.65%
• Missouri 1.01%
• Montana 0.76%
• Nebraska 1.65%
• Nevada 0.66%
• New Hampshire 2.03%
• New Jersey 2.21%
• New Mexico 0.68%
• New York 1.40%
• North Carolina 0.85%
• North Dakota 0.95%
• Ohio 1.62%
• Oklahoma 0.88%
• Oregon 0.98%
• Philadelphia 1.51%
• Rhode Island 1.53%
• South Carolina 0.56%
• South Dakota 1.22%
• Tennessee 0.73%
• Texas 1.69%
• Utah 0.62%
• Vermont 1.80%
• Virginia 0.86%
• Washington 0.92%
• West Virginia 0.55%
• Wisconsin 1.73%
• Wyoming 0.55%
• Washington D.C. 0.59%

Property Taxes – Incredibly Important

Property taxes are a vital part of any homeowners tax bill. To understand and effectively work with this type of tax is extremely important. They are incredibly difficult to understand, thanks to the many varied types of property tax structures, and differences between states in what is included in the property tax. The comparison between these states should spell out clearly, what a high property tax rate is, and where the highest rates are.

Der Beitrag Property Taxes in the U.S. – Real Estate Tax Rates Explained, List by State erschien zuerst auf ℄ Real Estates.