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Does anyone know why The Rushmore owners received an 8 times (8X) per month tax increase in August 2012?
Hi Riversider Noticed it got posted twice (had a computer error the first time) --- and your comment about the base rate. Don't know what it means. All I know is that The Rushmore owners just received an 8x the monthly tax rate increase and were surprised. Seems they were not told in advance or did not know. I thought that when there is a tax abatement for many more years the tax is not supposed to increase significantly. Or if that is the case then the on site sales people could have explained it upfront. How does one calculate what the actual tax is going to be for the next seven years before the tax abatement expires?
Did you even read the offering plan? Your attorney should've went over that with you before you signed the contract. Taxes increase every 2 years until its 10th year where full tax is in effect (You can assume 20% increase every 2 years until it reaches 100% on its 10th year)
So if your full tax rate is $2000 with current tax abatement of $100, year 3 would put you at $400, year 5 at $800, etc.
Go over your offering plan and it should have all the details.
I forgot to note that different properties have different terms, but that should be the case with Rushmore.
This is one of the many reasons, why every purchaser should pour over the offering plan and understand it. The timing and amounts of the planned real estate tax increases can have a very serious impact on a home owner's cash flow. Also think in the case of Rushmore the eventual taxes will be much more than five times. The appraised real estate values seem very conservative here when looked versus Riverside North, and maybe the work of a very convincing real estate guy professional. It's not unreasonable to suspect that as Riverside South gets built up assessed rates will climb to what occurs at Trump place. Personally I'd plan on at least a 20-30% add on to what the offering plan states as the eventual rate.
8x increase sounds like the fully assessed taxes without abatement. Wonder if there was a screw up somewhere? My condo board sends a letter in advance of our step-up every two years to remind all the owners that it's happening. I would assume owners at the Rushmore should have received a letter with an explanation of sort.
Must be something there...
8x increase is waaaaaaaaaaaaaaaaaaay too small of an increase to be considered a fully assessed tax.
8x $50-100 is still only $400-800, where it should have been $1500-3000
Right, the tax they've paid so far is what Riversider, in the other thread, called the mini-tax.
The first 20%, now kicking in, is some multiple of that.
E.g., if project full-year tax is $10,000, with a ten-year abatement, then:
Year 1&2: $200 (or some other nominal amount)
Year 3&4: $2000 (the 10X or whatever they're getting all het up about)
Year 5&6: $4000
Year 7&8: $6000
Year 9&10: $8000
Year 11: $10,000
The actual amounts would be larger. E.g., the tax might increase to $15,000 by year 11.
This is an "educated guess" --- maybe the original assessed tax value was based on the land only (not including the fully finished construction) and not on the completed unit which would then make sense for the 8 times tax increase despite the 421a schedule. We did not buy and I am reviewing the numbers closely as we consider it. ba294 is correct in regards to the fully assessed tax. My estimates match. If my guess is correct then sales should have disclosed it. $50 a month was too low for a completed project. The current $500 average monthly tax bill is lower vs. similar properties which do not have the 421a.
Don't look at the tax abated amount when purchasing it. Find a comparable unit close by and compare Rushmore's fully assessed rate. Their amount should be within same range.
IMO, Rushmore offers great value with luxurious amentities. I once considered purchasing a unit there but decided to to UES new development instead.
My sprint is going up 8x. Who cares about my 'expenses.'
Obtw. No worries. The professional re Borker will tell you, you'll make up all the cash bleed when the $1mm studio sells for $2mm in 5 yrs. no worries, just heloc it. Ka Ching!
Heloc and buy sprint or pay re taxes? Choice is yourz.