If I received $1 every time I heard someone say, “I don’t want to live in Coatesville — the taxes are too high,” then I would be very wealthy. I am an honest, transparent person, and I am not ashamed to say that I live in Coatesville. And honestly, I am not offended that people just write off the Coatesville area because of hearsay. However, I do think it’s a bit foolish to make a blanket statement like that without some basic facts.
I know real estate well enough to understand that while some of the tax rates in the Coatesville area may be a bit higher than others, the home prices are lower, making homes more affordable and attainable. My gut was telling me it wasn’t as bad as people were saying, so I decided to do a little study.
The following study takes an analytical look at property taxes in five of the main school districts that my team and I service, and it compares them as objectively as possible. The five school districts are Downingtown, Coatesville, West Chester, Great Valley and Octorara. It’s basically what I call the “Rt. 30 Bypass Corridor.” In order to take a fair look at how these districts and townships compare to each other, we looked at the specific data, including but not limited to – Cost of the average home in that district; Average principal and interest payment on that “average” house; Millage rate per township – and more. The complete list of data is found in the complete study.
Of course there are some assumptions that need to be made. Those assumptions have to do with what constitutes the “average” home, how the home purchase is financed, and what debt-to-income ratios are required for a loan. The full list of assumptions can be found in the download-able study.
You can download the full report Chester County Tax Comparison report here.
Let’s see what conclusions we can draw from this study.
- The first criteria you have to consider is, “How much annual income do you have?” Income is the overriding factor that really determines what you have to choose from. If you can’t afford the average home in the Great Valley School district of $371,000, then it is even silly to consider looking there. At that point, it really is irrelevant whether the taxes are high or not.
- After the income question, you have to ask yourself, “What type of monthly payment am I comfortable with?” Again, this is another question that basically makes the tax question irrelevant. If you are only comfortable with a maximum monthly payment of $1,400, then you really only have one choice. On the other hand, if you are comfortable with $2,000 or more as a monthly payment, then you can pick and choose from any of the five districts included in this study.
- Once you understand what you can and are willing to afford with a house, then one can look at the townships within each district. Each township has its own millage rate and can vary as much as 12 mills, which is a big difference. If you determine you can generally afford a home in a certain district and are concerned with the amount of taxes you want to pay, then you will want to look into each specific township. Of course, there are many, many factors that go into choosing which home to buy. This is not meant to be a guide on how to choose a home, only a commentary on the cost of owning a home, in relation to taxes.
- Which School District had the highest taxes? Let’s look at that from several perspectives:
- Total millage rate:
- Octorara – 37.2m/27.63% of your monthly payment
- Coatesville – 34.65m/26.2% of your monthly payment
- Downingtown – 31.44m/24.38% of your monthly payment
- West Chester – 23.51/19.69% your monthly payment
- Great Valley – 23.48/19.44% your monthly payment
- Pure dollar figure (which depends on average cost of home)
- Downingtown – $5,015
- Great Valley – $4,618
- Coatesville – $4,609
- Octorara – $4,462
- West Chester – $4,236
- Rank of schools based on average price of the home
- Great Valley – $371,000/+24% over “median”
- West Chester – $340,000/+13% over “median”
- Downingtown – $301,000/”median”
- Coatesville – $251,000/-17% over “median”
- Octorara – $226,000/-25% over “median”
- Total millage rate:
It is easy to see that just making a simple judgment on taxes, without knowledge, is a foolish thing to do. In the end it is about much more than just the taxes. Factors such as income, type of home, size of the home, setting and specific location are also important.
If your goal is to pay the least amount of taxes possible, then the Great Valley school district is for you. However, you must be prepared to spend about $150,000 more than you will in other areas. If you can only afford a maximum of $250,000 as your purchase price and want a lot of land, then you will need to be willing to live with paying the higher taxes in the Coatesville and Octorara school districts.
One golden rule I live by is “Always seek first to understand.” This report is aimed at helping anyone looking to make a real estate decision in the Chester County area do just that.
If you need help in finding or selling real estate in the Chester County area, please do not hesitate to contact Chris or Caleb of the Chris & Caleb Real Estate Team.
