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I was at a lunch with a friend when he brought up the difference between real estate taxes in Greenwich vs. Westchester County. As we were discussing the huge discrepancy between the two areas, it brought me back to when my family and I were moving to the suburbs. Having spent most of my life in California up to that point, I did not know a ton about the differences between Scarsdale, Rye, and Greenwich. Once, we saw the difference in the taxes we decided on Greenwich, as we felt we would rather have the money go to the price of the house. I have been researching ways to best demonstrate the differences in taxes and costs between Westchester and Greenwich. The Mortgage guy I work with in my office prepared a nice one sheet for me spelling out the closing costs between the two areas:
The above document is based on $2.5M single family home. I went to Zillow and took the most recent homes sold in Greenwich for $2.5M. Zillow had four properties whose average taxes came to $22,031 average. The four most recent sales in Scarsdale for $2.5M had average annual taxes of $59,902.
If we take that a step farther, I figure with a 4% rate on a 30 year mortgage with $2M financed (20% down) one is looking at $9,550 a month payment. When we add the average taxes the same valued home in Greenwich and Scarsdale costs a lot more per month in Scarsdale:
Greenwich monthly payment $11,385.92
Scarsdale monthly payment $14,541.83
That is a difference of $3,155.91 a month, which is 33% of the $9,550 mortgage payment. Thus, that extra 33% being spent on taxes could be used for $660,000 more in purchase power in this example.
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Jared Randall
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