Real Estate Taxes Average 2.72% Of A Home’s Value In WSSD
Property taxes and homeownership are inseparable. Across the country virtually all local governments levy property taxes on land, commercial property, and residential homes within their jurisdictions. The rate of taxation varies greatly amongst the many municipalities in the U.S. According to a study by the Urban-Brookings Tax Policy Center the average annual real estate tax burden across the country represents an amount of less than of 1% of a home’s value, with 60% of municipalities levying taxes less than the 1% of home value threshold.
Welcome to Delaware County where the tax enivronment is a little less friendly to homeowners.
Using data from the Multiple Listing Service (MLS) for closed home sales data for the first 6 months of 2014 I compiled the average sale price, annual real estate tax, and the ratio of the annual tax to the average sale price for each of the 16 school districts that are in Delaware County (Chester-Upland was not included due to incomplete tax data – Unionville and West Chester School Districts boundaries include areas in Delaware).
There is an astounding variance in the tax burden across the county. Homeowners in the West Chester School have the lowest tax burden of 1.14% of their home’s value to 5.09% for residents in the Southeast Delco School District. This represents a difference of over 400% between the high and the low in Delaware County.
To illustrate how onerous the tax burden has become in some eastern Delaware County communites there areas where a buyer purchasing a home with 20% down will pay more in real estate taxes per month than what they pay in principal and interest! As principal and interest payments remain static the payment ratio becomes further skewed though annual real estate tax increases.
If the ratio of taxes to value from the County’s highest mark in the Southeast Delco School District is applied to the average selling price of the 154 homes sold in the Wallingford Swarthmore School District, which was $291,293, the average tax bill locally would come in at $14,826, a whopping 87% higher than the average tax burden of $7,923 based upon tax data for homes sold in the first half of 2014.
For example a listing in Collingdale in Southeast Delco schools listed at $67,400 and sells for that price, which is close to the average selling price for the first half of 2014 of $67,259, will have monthly real estate taxes that exceed the monthly principle and interest payments by 32%. More money goes out each month for taxes than for servicing the debt on the home. Another sign of trouble to come is that this listing, picked by random mind you so I can assume there are others, is that the property is listed below the home’s appraised value. Now remember the appraised value is a result of the County’s market value reassessment conducted in 1999-2000, so this means the value of this home now is less than it was 14 years ago!
Scenarios such as this are a huge deterrent to growth in home values and inhibits the ability for homeowners in those areas to find buyers for their homes. The traditional movement of sellers westward in the county to areas such as Wallingford and Media is stymied and the pool of potential buyers shrinks as a result.
Wallingford PA Real Estate – Wallingford, PA 19086
