Home price vs. Property tax

[Eric P.]

My wife and I are mainly looking at 2 towns for our first primary home purchase.  We're used to renting in North Jersey at $2,400 a month comfortably so that's our budget.   In town #1 we could buy a house for $300k but taxes are about $10k.. in town #2 we could buy a house for $400k and taxes are about $5k.   We much prefer the house in town #2.  The monthly budget comes in about the same around $2,400 for either home.  

I'm always reading about "home affordability" and the $400k number scares me a little (gross about $155k w/ very low debt), but if the $400k place and the $300k place are costing me the same each month, wouldn't I be better off purchasing the $400k place as more money would actually be going into equity?  I just want to make sure I'm not overlooking something stupid.

[Ned Carey]

It is possible the $300K house is over assessed and you may be able to appeal and get them lowered. It could be that the taxes in town 1 are a higher rate. high tax rates lower values  for the reason you are seeing here. 

PS: if you want to build REAL Wealth, don't buy the most expensive house you can afford, buy the lease expensive house you can get buy with. Use the extra money to invest.