Your House May Have Just Made You Poorer

Rising property taxes are quietly squeezing homeowners across Central Virginia, and most people don’t realize how much it’s affecting their long-term financial picture.

In this episode, we break down what’s really happening behind Albemarle County’s recent reassessments, why your home value going up doesn’t mean you’re actually better off, and how increasing property taxes, insurance costs, and everyday expenses are putting pressure on household budgets.

You’ll hear real-world examples of families who look financially stable on paper but are feeling the strain month to month, along with practical strategies to evaluate your situation and make informed decisions. We cover budgeting adjustments, income strategies, downsizing considerations, and what steps to take if your current path isn’t sustainable.

If you want a clearer understanding of how rising housing costs impact your financial future and what you can do about it, this episode offers a straightforward, no-nonsense framework to help you think it through.

Transcript

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Securities and investment advisory services offered through LPL Enterprise, LPL, a registered investment advisor member, FINRA, SIPC, and an affiliate of LPL Financial. LPL and LPL Financial are not affiliated with Iron Eagle Advisors. The content in this material is for general information only and is not intended to provide specific advice or recommendations for any individual. Any guests are not affiliated with or endorsed by LPL Enterprise, LPL Financial, or Iron Eagle Advisors.

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Welcome back to Iron Eagle's Real World Money Show. I'm your host, John Flick, and today we're going to talk about why your house may have just made you poorer. I got three phone calls last week alone from people who all said basically the same thing. My property assessment went up. My house is supposedly worth $75,000 more than it was two years ago. So why do I feel so broke? One of them is a teacher at Albemarle High School. Her assessment went up ten percent. Her salary, it went up three percent. Her monthly escrow payment is going up over a hundred dollars. She asked me, Am I supposed to feel lucky that my house is worth more? And here's what I told her. No, you're not lucky. You're stuck with an asset you can't access and bills you can't afford, because here's the thing you cannot eat equity. You cannot spend equity, you cannot use it to pay for groceries or gas or your kids' soccer fees. Your house is worth more on paper, but your day-to-day life just got harder. Your budget just got tighter. And if you're already stretched thin, you might be wondering how you're going to make it work. Today we're talking about Albemarle County's property reassessments. What they actually mean for your household budget, what they actually mean for your retirement planning, and why being house rich and cash poor is one of the worst financial positions you can be in. So let's start with what actually happened with those reassessments. Albemarle County just reported that the 2026 total tax base increased 6.17%. That's the overall average across the entire county. Now, that's an average. Some areas went up more, some went up less. If you live in Crozet, your house probably went up 10% or more. If you're in Pan Tops, similar story. If you're in a neighborhood near a good school, you're looking at significant increases. Now the county will tell you we're not raising taxes, and technically that might be true. The tax rate itself might actually stay the same, but here's the reality. If your assessment goes up 6% and the tax rate stays flat, your tax bill goes up. How much? You guessed it, 6%. That's just math. Let's say you own a house in Albemarle County that was assessed at $400,000 at the last assessment. Now it's 2026 and your new assessment comes in at $425,000. That's a 6.25% increase, right in line with the county average. The property tax rate in Albemarle County is $89.4 per $100 of assessed value. That just went up four cents from the previous rate, by the way. So at the old rate of $85.4, your $400,000 house costs you $3,416 a year in property taxes. At the new rate, on your new $425,000 assessment, you're paying $3,799 a year. That's $383 a year or about $32 a month. Now if you're listening to that and you're thinking, $32 a month, well, that's not the end of the world. Let me show you why it adds up fast. First, that $32 a month goes into your escrow account, so your monthly mortgage payment just went up by $32, and that's assuming nothing else changed. But here's the thing: your homeowner's insurance probably also went up because replacement costs are higher. Materials are more expensive, labor is more expensive. So maybe your insurance went up $20 a month. Now we're talking $52 a month. It's a total increase from just property taxes and insurance alone. But wait, there's more. If you live in a neighborhood with an HOA, those fees probably went up too, maybe another $10, $15 a month. All of a sudden, your housing costs are $60 to $65 a month higher than they were last year. That's $720 to $780 a year. Now let's talk about your income. If you work for Albemarle County Schools, you got probably a 2-4% raise this year. If you work for UVA, you got about a 3% raise. And if you work in the private sector, maybe you got 3%, maybe 4% if you're lucky. Let's say you make $60,000 a year, a 3% raise is about $1,800 a year. That sounds pretty good. But after taxes, that $1,800 turns into maybe $13.50, about $112 a month in your pocket. So you got $112 a month raise after taxes, but your housing costs went up $60,000 to $65 a month. And that's before we talk about everything else that went up, like groceries, gas, utilities. This is what I mean when I say your house just made you poorer. On paper, you're $25,000 wealthier because your house went up in value, but in reality, your budget just got tighter. You have less money left over at the end of the month, you're falling behind. And if you're already stretched thin, this might be the thing that pushes you over the edge. Alright, so why does this keep happening? Because this is not the first time property taxes have gone up in Albemarle County, and it won't be the last. So why do they keep going up? The simple answer is it costs more money to run the county every single year. Schools need more money. The school system is the biggest piece of county budget. About 47% of the total budget goes to the schools. And school costs keep going up. Teacher salary, support staff, building maintenance, technology, special education services, buses, all of it costs more money every single year. Public safety needs more money. That four cent property tax increase we just talked about, 3.2 cents of it is going to public safety. That's to retain 57 firefighters who were hired through federal FEMA grants. Those grants are running out, so the county has to pick up the cost. Roads and infrastructure need maintenance. Every pothole, every bridge, every traffic light costs money to maintain and repair. So the county budget keeps growing, and the money has to come from somewhere. And here's the other piece of the puzzle. The state of Virginia does not fully fund local schools or governments. The state provides some funding, but it's not enough to cover the actual cost of running schools and providing services. So counties have to make up the difference. And state funding has not been keeping pace with rising costs. So every year, counties have to come up with more local revenue to fill the gap. So where does that revenue come from? Property taxes. That's the biggest revenue source for local governments in Virginia. Virginia has a tax structure that relies heavily on property taxes at the local level. Some states have higher income taxes and lower property taxes. Virginia does it the other way around, relatively low state income tax, but property taxes that hit local homeowners hard. So when the county needs more revenue, property taxes have to go up. There's not really a lot of other options. And here's the tension: everybody wants good schools, everyone wants safe neighborhoods, everyone wants the roads maintained and the parks kept up, but no one wants their property taxes to go up. So the Board of Supervisors is stuck trying to balance the budget. They need to fund schools and public safety, but they know that raising property taxes is going to make a lot of people angry. There are public hearings coming up on April 23rd and the 30th, if you want to make your voice heard, but the reality is the county has limited options. It could be worse. Now I'm going to say something that's not necessarily going to make you feel better, but it is true. Albemarle County's property tax rate is actually moderate compared to other parts of Virginia. If you live in Fairfax County or Arlington, your property tax rate would be over a dollar per 100. In Northern Virginia jurisdictions, it can be a $1.15, $1.20, even higher. So at $89.4 cents per $100, Abemarle is actually on the lower end for desirable Virginia counties with good schools. But here's the thing: it could be worse, doesn't help you when you're struggling to make your mortgage payment. It could be worse, doesn't put food on your table or pay your kids soccer fees. So yes, it could be worse. But that doesn't change the fact that your housing costs just went up and your paycheck didn't go up so much. The bottom line is this property taxes are going to keep going up, maybe not every year, but over time the trend is up, and you need to plan for that. So let's talk about what this actually does to your household budget and your life. Most people don't think about property taxes on a monthly basis. It's buried somewhere in your escrow account. You just see your mortgage payment and you pay it. But when that payment goes up, the money has to come from somewhere, and for a lot of families, there's not a lot of slack in the budget. So let me tell you about a couple who came into my office last month. I'm going to change some details for privacy, but this is a real situation. They both work at UVA. She's a nurse, he's an IT. Combined household income around $170,000. They've got three kids, ages 8, 11, and 14. They bought their house in Forest Lakes about five years ago for $425,000. It's now assessed at $510,000. So on paper, they've got $85,000 in additional equity. Yay, that's great, right? Except their monthly housing payment went up $165. Property taxes are up, homeowners insurance is up, HOA fees. And now they're sitting in my office asking, where do we cut? Because they're already not maxing out their $403B retirement accounts. They're contributing enough to get the match, but that's it. They're not saving for college. They do have a $529 plan, but they're only putting $100 a month in, and that's total for all three kids. They've got one daughter who plays travel soccer. That costs about $3,000 a year between club fees, tournament fees, hotels, travel, all of it. And they're trying to decide if they can afford to keep her in it because that's what it's come down to, folks. Do we cut our kids' activities so we can afford to live in our house? This is the reality for a lot of families in Albemarle County right now. You're making six figures, you're doing everything you're supposed to, and you're still getting squeezed. This is what I call being asset rich and cash poor. And it's one of the worst financial positions you can be in. You've got equity in your house, maybe you've got $100,000, $200,000, $300,000 in equity. That is real wealth. But you can't access it without selling your house or taking out a loan. It's locked up. And in the meantime, your day-to-day cash flow is getting squeezed. You can't afford to max out your retirement accounts, you can't afford to save for college, and you can't afford to take a vacation. You look rich on paper, but you feel broke in real life. Now, if you're in your 40s or 50s and you're in this situation, you've got a serious problem because this is supposed to be your peak saving years. You're at the height of your earning power, your kids are getting older and becoming less expensive. You should be ramping up your retirement savings. But instead, you're trying to figure out how to afford a $165 increase in your housing payment. And here's the brutal truth: if you can't afford to live in your house right now while you're working and earning a salary, how are you going to afford it in retirement when you're on a fixed income? Property taxes don't stop when you retire. They don't go down. Quite the opposite, they actually keep going up. Insurance doesn't stop, maintenance doesn't stop, HOA fees don't stop. So if your budget is tight now, it's going to be tighter in retirement. And if you're not saving aggressively for retirement because you can't afford to, you're setting yourself up for some very difficult retirement years. This is why I say your house just made you poorer, because it's not just about this month or this year, it's about the next 20 or 30 years of your financial life. I want to tell you about another couple I met with a few months ago, uh, Philip and Samantha. They live in Crozet, empty nesters, both in their early 60s. They bought their house about 15 years ago for around $300,000, and it's now assessed at $575,000. So on paper, they have about $275,000 in appreciation, plus they've been paying down the mortgage, so about $375,000 or so in equity. They should feel pretty good, right? Except they came into my office because they were thinking about selling. Why? Because their property tax bill went from about $3,200 a year to almost $5,100 a year. That's an extra $1,900 a year, about $160 a month. And it's not just property taxes. Their homeowners' insurance doubled, their HOA fees went up, their house is 15 years older, so maintenance costs are higher. They sat in my office and said, We love our home, we love our neighborhood. Our friends are here, but we just can't afford to stay. They were looking at retiring in three years and they were doing the math, and on a fixed retirement income, they were concerned whether they could afford $5,100 a year in property taxes, plus $2,400 a year in insurance, plus $1,200 a year in HOAs, plus maintenance and repairs. That's $8,700 a year just to own a house they've already paid for. That's over $700 a month. And here's the kicker: they said if we sell and move somewhere cheaper, we lose our community, our friends, our routine, everything we've built here for the last 15 years. So I asked them, what do you want to do? And they said, we want to stay, but we don't know if we can afford it. That's the situation a lot of people in Albemarle County are facing right now, and that's why we need to talk about your options. All right, so what do you actually do about this? You've got a property assessment that went up, your housing payment went up, your budget is tight. What are your options? Let me walk you through five realistic paths forward. None of them are magic and none of them are easy, but face it, these are the options. Option one is to cut spending elsewhere. The most obvious answer, find the money somewhere else in your budget. If your housing payment went up 60 bucks a month, you need to find 60 bucks a month to cut somewhere. Cancel some subscriptions. Netflix, Hulu, Spotify, whatever you're not really using, that might be $30 or $40 a month right there. Eat out less. If you're spending $200 a month on restaurants, cut that to $150. There's your remaining $20 or $30. Look at your grocery bill. Are you shopping at Whole Foods when you could be shopping at Kroger or Aldi? Small changes do add up. This approach works if your budget has fat to cut, but here's the reality: a lot of people I talk to are already pretty lean. There's not much left to cut without making real sacrifices that affect your quality of life. Like the travel soccer. So cutting spending might be part of the answer, but it's probably not the whole answer. Option two is to increase your income. The other side of the equation, if you can't cut expenses, make more money. Ask for a raise if you're due for one or if you haven't gotten it. Now's the time to have that conversation. Look for a new job. If you've been in the same role for five years or so and you're not getting meaningful raises, you might want to explore what else is out there. Job hopping is often the fastest way to increase your income. Welcome to the do normal. Pick up a side gig, maybe drive or Uber on the weekends, do some freelance work, teach an online course, whatever skills you have that you can monetize. This is probably the best option if you can make it work because earning more money solves a lot of problems. But it's not always realistic. If, for instance, you're a teacher at Albemarle County, your salary is what it is. There's a pay scale. You're not going to negotiate your way to a 20% raise. And if you're already working full-time and you've got kids and a life, picking up a side gig might not be sustainable. But it's worth exploring. Even an extra $500 or $1,000 a month can make a big difference. Option three, you can tap your home equity, but be careful on this one. You could take out a home equity line of credit and use it to cover your cash flow needs. Your house is worth more now, you've got equity. You can borrow against it. But here's my take on this: borrowing money to pay your bills is not a solution. It's just kicking the problem down the road. Now you've got a HELOC payment on top of your mortgage and you've got interest piling up. And you still haven't solved the underlying problem, which is that your expenses are higher than your income. There are situations where a HELOC makes sense. If you need to consolidate some high interest debt, that might be worth exploring. If you're doing a home renovation that will increase your property value, that might make sense. But again, can't eat equity. But using a HELOC to cover your monthly budget shortfall, that's a red flag. That's a sign that something needs to change. Option four is the new clear option. You can downsize or relocate. And this is one, folks, that frankly not many people want to talk about, but sometimes it is the right move. If you cannot afford your house, sell it, move somewhere cheaper. Maybe you can move to a smaller house in Albemarle. Maybe you move out to Fluvanna or Louisa or Green where the property taxes are lower and the housing is more affordable. I know this sounds drastic, and for some people it's not realistic. If you're tied to your job in Charlottesville and you can't have a long commute, your options may be limited. But if you're empty nesters and your kids are grown, do you really need a four-bedroom house in Forest Lakes? Could you downsize to a townhouse or a condo and free up a bunch of cash? Or could you move out to another part of the county or to Waynesboro where you can get more house for less money? This is disruptive. It's emotionally hard. And if you love where you live and you're plugged into your community and your kids are in good schools, it might be a difficult decision to make. But sometimes it's the right financial decision, especially if staying in your current house means you cannot save for retirement. Option five is to reduce your retirement savings temporarily. This is the option nobody wants to talk about, especially your financial advisor. But sometimes it's a reality. If you can't afford to max out your 401k right now, you might want to consider pulling back temporarily. If it's a choice between making your mortgage payment and maxing out your retirement account, make your mortgage payment. You don't really have a choice. But you need to understand the trade-off. Every dollar you don't save now is a dollar you'll need to make up later. And time is the most valuable thing you have when it comes to compound interest. So if you do this, definitely treat it as temporary. And as soon as your cash flow situation improves by using one of the other steps above, ramp your savings back up. Don't let this become permanent. And at a minimum, keep contributing enough to get your employer match. That is free money. Do not leave it on the table. So those are five options that I have for you. Cut spending, increase income, tap equity carefully, downsize or relocate, or reduce retirement savings temporarily. For most people, the answer is probably some combination of these. A little bit of cutting spending, a little bit of increasing income, maybe a plan to downsize in a few years. But the point is you need to do something. Don't just drift along hoping it works out. Make a conscious choice and commit to it. So next, I want to zoom out for a minute and we're going to talk about the bigger retirement planning picture here. Because this property reassessment issue is about more than just your budget for this year. This is a perfect example of why retirement planning is so much harder in 2026 than it was for your parents' generation. Your parents had predictable housing costs. They could buy a house with a fixed-rate mortgage and know exactly what their payment was going to be for 30 years. Their principal interest payment never changed. Property taxes were relatively stable. Insurance was cheap, and they probably didn't even know what an HOA was. So they could plan, they could budget, they knew what they needed in retirement. That is not the world we live in today. Your principal and interest might be fixed, but your property taxes go up every few years, your insurance goes up every year, your HOA fees go up, your utilities go up. Everything about homeownership keeps getting more expensive, and you can't always predict it. You can't always budget for it with 100% accuracy. So the question you need to ask is can you afford this house in retirement? Here's a critical question. Okay, can you afford to keep it? Not just can you pay off the mortgage, but can you afford the property taxes, the insurance, the maintenance, the HOA fees, all of it on a fixed retirement income? So let me give you an example. Let's say you retire at 65 years old. You've paid off your mortgage. Yay, the house is yours, free and clear. You made it. Or did you? You still owe $3,799 a year in property taxes. That's about $317 a month, plus homeowners insurance, let's say $150 a month, plus HOA fees if you have them, maybe $100 a month, plus maintenance and repairs, which average about 1 to 2% of your home's value every year. So on a $425,000 house, that's somewhere between $4,250 and $8,500 a year in maintenance. So let's just call it $500 a month to be conservative. So even with no mortgage, you're looking at about $1,067 a month in housing costs. That's $12,804 a year. And that number is going to keep going up because property taxes are going to go up. Insurance will go up. Maintenance costs will go up. So the question is: can you afford that on a fixed income? Do you have enough retirement savings to cover it? I've had clients who retired thinking they'd be fine because they own their house outright. Then property taxes and insurance and maintenance ate up so much of their budget they couldn't afford to stay. They ended up having to sell or downsize, which is fine, but it would have been better had they planned for it instead of being forced into it. Your house, folks, is not your retirement plan. A lot of people think I've got this equity in my house, that's my retirement plan, I'll sell it when I retire and live off the proceeds. Not necessarily a terrible plan, but it's incomplete at best. Because where are you going to live after you sell your house? You still need a place to live. And unless you're moving to a much cheaper area, you're probably going to spend a big chunk of that equity buying or renting your next place. There's also the possibility of a reverse mortgage, but that would be an entire show on its own. Your house can be part of your retirement plan, but it should not be the whole plan. You still need savings, you still need investments, you still need a strategy for generating retirement income. So the bottom line is this: if you're feeling squeezed by your property tax increase right now, that is a warning sign. It's telling you that you might have a problem in retirement and you need to start planning for it now. So let's wrap this up with a few specific action steps. Okay, these are things you can do right now if you're dealing with this property tax increase. Check your escrow account. If you have a mortgage, your property taxes are paid through your escrow account. Your lender has already been notified of the reassessment, and they probably already adjusted your monthly payment. Log into your mortgage account online, look at your payment breakdown, see what your new monthly payment is going to be. You need to know this number so you can adjust your budget accordingly. Don't wait until you get a notice that your account is already short. Be proactive. Step two, review your assessment and consider an appeal. Sometimes property assessments are wrong. If you think your house is overvalued, you do have the right to appeal. The deadline for appeals in Abalemor County is typically in early May. You can find the exact date and the appeals process on the county's website. Just search for Abalmoral County Property Assessment Appeal. To appeal, you will need evidence that your assessment is too high, and that usually means pulling comparable sales data. Look at similar homes in your neighborhood that sold recently. If they sold for less than your assessment, that's what we call a clue. It's real evidence. Use it. A local real estate agent can help you pull this data, or you can do it yourself using websites like Zillow or Realtor.com, although the county is likely to give more weight to actual MLS data. Is it worth appealing? Well, that depends. If your assessment seems wildly out of line with reality, yes. If it's close to market value, you're probably not going to win the appeal. Step three, run your numbers. If this property tax increase is affecting your budget, you might want to think about what it means for your long-term financial plan. Are you still on track for retirement or did this just set you back? Pull up a retirement calculator, input your current savings, your expected retirement, your estimated expenses, see where you stand. Or you could call someone like me and we can help you through that. If you're falling behind, you need to know now so that you can adjust. Maybe you need to save more, maybe you need to work a few extra years, maybe you need to plan on downsizing and retirement. Either way, you just need to know. Step four is make a decision. Don't just drift along hoping everything will work out. Look at your options. Cut your spending, increase income, downsize, whatever makes sense for your situation. Make a conscious decision about what you're going to do and commit to it. And if you're not sure what the right move is, talk to someone who can help you think through it. That's what we do at Iron Eagle Advisors. We help people figure out if they can afford to stay in their house or if they need to make a change. We can help them run the numbers and understand the trade-offs. Give us a call, we'll sit down with you, look at your actual situation and help you figure out what makes sense. All right, so let's bring this home. If you're sitting there looking at your Albemarle County property reassessment and feeling like your house just made you poorer, you may not be wrong. Your house is worth more on paper, but your day-to-day life just got harder. Your budget got tighter. And if you were already stretched thin, it might be the thing to push you over the edge. You're not alone in this. Thousands of families across the county are dealing with the exact same thing right now. Property taxes going up, insurance going up, HOA fees going up, everything going up. And meanwhile, salaries are going up, eh, 3%, whatever. If you're lucky. It just doesn't add up. So what do you do? You've got options. Cut spending, increase income, downsize, adjust your expectations. None of these things are fun, but they are realistic. The worst thing you can do is ignore it. Don't just let your escrow payment go up and hope you can afford it. Don't just drift along hoping everything works out. Figure out where you stand, run the numbers, make a plan. And if you need help through this, we're here. That's what we do. We help people in Charlottesville and Albema County and all the surrounding areas figure out if they're on track for retirement or if they need to make some changes. We're not going to tell you what you want to hear, folks. We're going to tell you what you need to hear, and then we're going to help you figure out what to do about it. And folks, I want you to know this show is for you, and I want to cover the topics that actually matter to those living here in Charlottesville and in Central Virginia. So tell me, what do you want to hear about? What's keeping you up at night financially? What questions do you have that no one's answering? Reach out at JFlick at Iron Eagle Advisors.com or give us a call at four three four four six five six four eight five and let us know. Your question might become next week's episode. If you don't have someone you're working with or you feel like you're not getting clear explanations where you are, this is exactly the kind of thing we do at Iron Eagle Advisors. We sit down, we translate the jargon into plain English, look at all the moving parts, your investments, insurance, debt, retirement, taxes, goals, wants, needs, desires the financial ones. Don't be going and getting any crazy ideas here. And we build a plan that actually fits a real person's life, not just a spreadsheet. If you'd like to schedule a conversation, you can go to www.ironegaladvisors.com and click on the Let's Get Started link, or you can call our office at four three four four six five six four eight five. Again, that's Iron Eagle Advisors.com or four three four four six five six four eight five. No pressure, no gimmicks. We talk and we see where you're at. And if we can help, great. If not, you may just walk away with more clarity than you had before. This is John Flick with Iron Eagle Advisors. Take care of your money this week so your future self doesn't have to look back and say, Well, that was dumb. Thank you for spending part of your day with me. What do you say we do it again? Say same time, same place, next week.