[snegu]

What I didn't understand when I bought was that property taxes actually will make your mortgage payments go up. Mine went up about 1.5% after one year. I'm very curious what it will be this year, as property values have gone way up.

[epistasis]

Property taxes are a small fraction of a mortgage payment though. When property values go up, rents usually go up a similar amount, and renters eat all that cost. However homeowners housing costs go up a tiny fraction compared to renters.

[shados]

If by a small fraction you mean 20, 30% or more (and higher if your home appreciated a lot since you bought it), then yeah, sure.

My taxes are about 25-30% of my mortgage payment (after a massive residential exemption, too), and if you have a slightly more expensive than average home in a low cost area (so things like school taxes will be higher to raise a similar amount of money per child), it can get reaaaaally expensive.

[shados]

yeah, our property taxes have been skyrocketing, because the city is raising it by the max legally allowed every year AND they have votes to raise it further (usually by misrepresenting the needs to get people emotionally involved. Also renters generally think tax rates don't affect them, which is incorrect).

On the other hand, I chose to manage my own taxes instead of having the lender escrow it for me, so I get to see them separately. It helps putting things in perspective.

[epistasis]

Higher property taxes mean that less property will be hoarded, and that it's likely that real estate will be put to more productive use.

It's the rare market where rents are set according to how much it costs to provide the rental, as that would be a market that is oversupplied, and most governments work hard to prevent that from happening. In supply-constrained markets, rents are set by what the market can pay, not based on how much property taxes are or interest rates for mortgages or maintenance costs.