Quote:
Originally Posted by jrref
The bond is not a deferred tax. It's a loan you assume when you buy the house for the cost of the infrastructure. It can be as much as $2,000 or more on your yearly tax bill. What most people don't realize is the interest rate on the bond. Some are low like 3% and others are at 6% or higher. If you plan to stay in the home for 10 years or more a $25,000 bond could wind up costing you $50,000 when it's all paid up. Even if you stay in the home for 10-15 years you will be paying most of the interest up front just like a mortgage. The bond is a loan at probably a high interest rate that you need to pay off over 30 years. ( and most people aren't here for 30 years ). Of course you can invest the money and deduct the interest against the yearly bond payoff but you have to guarantee you are able to get a reasonable rate of return on your money for a very long time which isn't always possible.
As far as having the bond paid when selling? It's just another sales feature for your home. Also the reason why some homes sell in a day while others don't is becasue they are probably move in ready with a view. Many homes today are sitting on the market for a month or more so any benefits like the bond paid along with all the other benefits will make your home sell faster.
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Perfectly said IMO. We paid off our bond 2 years ago on our now 8 year old home. Got tired of having to pay it yearly along with the interest. We’re not concerned re the house sale, whenever that is, after we croak. It will be in the kid’s hands and bank accounts. We do believe a no-bond is a good sale incentive and getting $$ in return.