Many people who buy a house with a mortgage consider themselves “homeowners”, but it’s not really true. You don’t own your house, the bank does. You’re just a custodian who takes care of the maintenance and pays rent to the bank. Miss a few payments and the bank will foreclose and come take your home away.
I know you’re thinking to yourself: if you do pay off your mortgage consistently and diligently, eventually, after 30 or so years, you’ll be a homeowner, right?
Wrong. While the claim your bank has on your house is voluntary (you chose to get a mortgage) and can eventually be paid off, another, far more insidious entity lays claim to your house, and that claim cannot be paid off, negotiated, or removed in any way. It’s permanent. And to make matters worse, this nefarious entity has the gall to unilaterally control the interest you have to pay. One year it could increase your payments by 20%, and there’s nothing you can do about it. Who am I talking about?
If you guessed, “the government”, then you are correct!
Property taxes are an infinite, un-repayable mortgage. No matter how much you, your children, and your grand-children pay it off, it’s always going to be there.
In the town I live in now, property taxes doubled in just the last decade. They’re now at around 3.5%.
That means every 30 years you pay the government your entire home value, in perpetuity. That’s a 30 year mortgage that never ends. If you also had a 30 year bank mortgage, you’d be paying two mortgages at the same time!
And just like the bank, if you miss a few payments, the government will come and seize your valuables away to auction them off, and if that’s not enough to cover the bill, they’ll take your house away, too. They might even put you in a cage, just to make sure you’re punished enough.
So the next time you think you own property because you’ve signed some paperwork, ask yourself: who can take this away from me if I don’t write my monthly or yearly cheque to them? Cause that’s who really owns it.