update. I researched 14 hp Kawasaki motors and looks like it came out of a gt242 not gt 245. The paint and seat lead me to believe that this machine has either lived out doors all of its life or been abused some or both. I have seen other gt275 of the same vintage that look far better ( at least so far as the seat, paint, and crascks indicate.

My opinion, I think the price is pretty salty. $1500 should buy you a pretty nice,original, GT275. I own one and the one modification I made was to add a grease zerk to the steering pivot casting between the two bushings (can be seen under the tractor). It seems to help the steering a lot as this series of tractor typically did not turn sharp very easy.

The GT275 was the most expensive of the original GT series, which replaced the old variodrive 200 series (212/214/216). It included:
GT242 (48" / 14hp / geardrive)
GT262 (48" / 17hp / geardrive)
GT275 (48" / 17hp / hydro).
I'd guess it would work just fine with the 14hp motor, but $1500 is too much, especially since it's been downgraded.
These are real garden tractors, designed to push snow around and plow gardens with sleeve-hitch attachments. However, the sleeve hitch available for this tractor is not integrated with the lift system, and is cumbersome. The 30" tiller will use the lift lever, though. The biggest annoyance with these tractors is the poorly designed hood hinge, which breaks on almost all of them. This tractor is compatible with the same attachments used with the later GT series (GT225/235/245) and LX series.
This would be a good deal at $1,000. $1500 is too steep. Who knows how many hours are on the replacement engine, and it's highly doubtful it was rebuilt at the time fo the swap. The engine probably came out of a 245 (next bigger chassis), not a GT245. If it had a newer 20hp engine from a GT245 I'd probably give him $1500.
So it's roughly comparable to an X500, but with much less power. I'd hold out for a later model GT225/235/245. Watch craigslist and ebay. Good luck.

I have a 1996 GT275 w/approx 700 hrs - no hr meter on this model so its a guess. - I may be selling it in approx 4/6wks, I'm working on a deal for a 3 yr old Bota ZD326 to replace it. If I get the deal done on the Bota, the GT275 goes (I will be asking $1750). BTW the hood has no cracks, the seat is good. Has been serviced at dealer. Right side tail reflecter is gone. All else works as it should.

With some great help from marineguy's buyer's guide on Deere GTs, I purchased a used 2001 GT225 early this summer. It was in excellent condition, very low hours by comparison to other GTs I looked with hour meters and I got it for $1700. I was primarily looking at GT225s and 235s, but I also kept my eye open for the GT242,262,275 series as well. I didn't come across that many, but those that I did were either beat or the good condition ones were overpriced in my opinion. I could get a newer GT225/235 for the same price or somewhat more. In fact, at $1700, I ended up with my GT225 at lower price than some GT275s I saw.

So I would agree with marineguy, I would look for a GT225 or 235. Personally, I steered clear of the GT245s with the 20HP Kawasaki. They had some type of over rich problem which I confirmed with a call to JD corporate (very helpful actually with regard to my purchase). If the 20HP Kawas didn't have that issue, I would probably have bought a mint 2004 GT245 with 80 hours. Seem to run well when I test drove it, but every time I started it, it would put out a nice big shot of black smoke and inside of the right front wheel was as black as the tire. I think I would have paid about $2700-2800. I'm in the northeast and we definitely seem to pay more, but I think $2700-2800 for a mint 80 hour GT245 would have been a nice deal.

Although I'm very satisfied with the GT225 with the single cyl 15HP Kohler, the newer GT235s with the 18HP Kawa would have been my first choice if I could have got one at better price than what I came across. In fact, the day I bought my GT225, I looked at a 2004 GT235 in excellent condition. Asking price on GT235 was $3000 and the lowest he would go was $2700. Both sellers knew I was looking at the other tractor and I had already negotiated a price on the GT225 at $1700. So, I went with $3000 in my pocket and I could have gone home with the GT225 and $1300 left or the GT235 and $300. The GT235 was a great condition unit and the twin cylinder Kawasaki was sweet, but driving home with the extra $1000 and a great condition GT225 was too much to pass up.

You mentioned tilling, if you were just looking at mowing, light towing, etc, I'd suggest considering a used LX series. I didn't go look at any, but I ran across ads for many what looked to be very nice condition LXs in the $1500 range.
Good luck whichever way you go.

In my experience, trees don't like being tilled around, but know that a tiller is a very expensive piece of equipment, unless you find a used one. It seems like used tillers are pretty easy to find for the old 200 series (lots of package deals). But they're pretty rare for the GT series. I think tilling with a garden tractor was a lot more popular back in the 70s and 80s than the 90s-present. Not sure why since tomoatoes and red peppers are a bit spendy--but I didn't pay for a single one this summer! And I still have some peppers out there waiting to be picked.

Where are you? Check out this tractor in PA
ebay auction110451668046
I don't think I've ever seen a 265 in such nice original shape.
This is easily a $1500 tractor. With the blade I'd pay $1800.
It has a heavier frame than the GT series (same as GX).

Here is a link that might be useful: deere 265