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High property taxes are good

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Re: High property taxes are good

#441

Post by throwaway_4ever »

rahimnathwani wrote: post #200
gnicholas wrote: post #185

Earlier quoted context omitted.

I think this new rule only applies to property that is inherited and not lived in by the inheritor (e.g., rental property or vacation home). If you inherit a home and live in it, I think you can still keep the old property tax basis. There may be some dollar value limitations or other rules I’m not remembering though. EDIT: just checked, the property value can go up by $1M from when it was purchased without the inher…

IIRC the taxable value (not sure of the technical term）goes up by up to $1MM

No, it's $1m of taxable value increase is waived if and only if a parent's only home is sold/transferred to a child's only home.

Example 1: Bay Area home $1.7m; old taxable value $300k, new taxable value $700k (1.7m - 1m), prop taxes ~9k/year.

Example 2: Fresno home $700k; old taxable value $200k, new taxable value $200k (700k - 1m, so no affect)

Grandparent's home? Parent's second home? Child's second home? Uncle's home? Sibling's home?

No. Bay home is now $1.7m taxable, $21k/year

Re: High property taxes are good

#442

Post by babypuncher »

dubswithus wrote: post #432

All homeowners are real estate speculators. Wouldn't you also consider anyone buying a "starter home" a speculator? Their goal is to continuously flip their house.

I bought my starter home to live in for 5 years while I continued building my career, not to flip.

Re: High property taxes are good

#443

Post by bergenty »

cbm-vic-20 wrote: post #6

Land value taxes are even better. Property taxes provide a disincentive to making the land more productive. A land value tax would incentivize residential landowners to build more units which provides more supply and would lower rents.

No, I hate it. It’s a tax on just living and we don’t need to do this in the US where we have more land than we know what to do with.

Re: High property taxes are good

#444

Post by throwaway_4ever »

abeppu wrote: post #357
Supermancho wrote: post #306

Earlier quoted context omitted.

> Why are seniors magically allowed to be immune to basic market forces when no one else is? Because they have fixed incomes (generally). This income is immune to market forces. That's why. While many elderly invested wisely (and at the right time) to become wealthy, especially when leveraging dips (like during the 80s), it doesn't change the average case. Living month to month on a fixed income is the norm after ret…

Except, while it was always rhetorically useful to talk about seniors with limited and fixed incomes being able to stay in their homes, Prop 13 also benefits people with multiple homes, landlords with rental properties, kids inheriting their parents house and running it as an AirBnb, etc. It benefits _corporations_ and non-residential property. Corporations can also skirt around it by not triggering a reassessment by…

> kids inheriting their parents house and running it as an AirBnb

This doesn't exist anymore as of Prop 19. If an inherited home is not primary residence, it is taxed at full market value.

Re: High property taxes are good

#446

Post by 999900000999 »

Like most things, this is a complicated problem.

The only way to actually make a good cheaper is to produce more of it.

But home owners don't want their homes to stop increasing in value.

If their was a bill in Congress to magically double the housing supply, I guarantee you it wouldn't pass.

Plus passing a property tax hike won't get you re elected.

Re: High property taxes are good

#448

Post by bergenty »

DevKoala wrote: post #439

> This has led to is a glut of high quality housing at very low prices. The amount of money one needs to save up for a downpayment in Chicago on a 2BR in the city center is 5x lower than in San Francisco or New York. That is because it is Chicago and not SF. Not because of taxes.

Well Chicago is one of the best cities in the world to live in based on rankings so I don’t know what you’re implying here.

Re: High property taxes are good

#449

Post by xphos »

cryptonector wrote: post #392
negamax wrote: post #390

Earlier quoted context omitted.

What author is saying is that if a property has a high yearly ongoing costs, it becomes tougher to just hold onto it and not put it into the market i.e. this causes increase in supply. If I have a $10k/year expense on a property, I am forced to at least generate a yearly $10k+ from the property. This would keep the rentals and property prices in the area in check

That can be right in the short term, but in the long term you'd expect developers to stay out of the market, so how is it that Chicago has a "glut of high quality housing at very low prices"?

I don't think this statement is true because in high cost areas developers still don't develop because higher price also mean higher land costs. On top of that places like NY have lower taxes but not enough development over a long term scale. This taxes codes don't change on a whim. There is also a factor of zoning when it comes to build there very well might not be any land to develop near a city because it's all saturated from long term speculation

Re: High property taxes are good

#450

Post by bradgessler »

ed25519FUUU wrote: post #419
fleddr wrote: post #384

I'm struggling to make sense of the cause and effect in the article: "The high cost of property taxes have long pushed away speculative investors as it has pushed the carrying cost beyond what is profitable to hold as a passive investment long-term." Alright, so now the speculative buyers are gone and we're dealing with ordinary home buyers that actually occupy their home. These genuine owners are paying high propert…

> And what on earth does Chicago have to do with San Francisco or New York? This was such a laughable comparison because BOTH of these cities have high property taxes compared with more affordable cities in other states.

I don’t know about NY, but in SF property taxes are effectively frozen based on the value of your home when purchased.

I rented a house once in West Portal where the landlord was paying property taxes on the 1970 value of the home, which was something like $70k. The owner was gifted this house and taxes basis from their parents, who originally bought it. The tax bill came out to just a few thousand dollars as of 2020.

Meanwhile my neighbor at the time bought their house for $3m and was paying something like $35k.

I thought about writing the property taxes in front of each house on the sidewalk with sidewalk chalk to make a point how messed up this tax policy is, but I opted instead to keep the peace and do nothing.

This loophole is used by families in CA as a way to pass assets to their heirs. The worst part is the tax rate also gets passed down, but one generation tops.

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