51–60 of 110 posts
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Then you move. That's how it works; if you can't afford the property taxes, you can't afford to live there.
Or abolish property taxes and fund cities with consumption taxes or some other tax
However, if all you have is a house in an area with rapid price growth, this change won't save you.
This is a good illustration of bad tax policy, specifically Prop 13. Zoom in on a residential street, particularly in the Bay Area, and you will see a row of houses which are roughly equivalent in value. Some homeowners pay several times as much annual property tax as their neighbors, because they bought their homes more recently and paid more for them. That's kind of insane, and nobody would design the property tax…
For example, in Florida property tax increases are capped to the lesser of 3% or CPI. 25k of value is also exempted from property taxes and 50k is exempted from non-school property taxes. But only for a single primary residential property.
Where CA13 is different is that it applies to everything: commercial property, industrial property, rental property, second homes, third homes, etc.
I think there is a pretty good case to be made that there is a massive public interest in keeping people from being pushed out of their homes by taxes. Capping tax increases is also necessary to make it possible to financially plan for them (e.g. I can invest enough so that my investments will pay the taxes w/ increases for the rest of my life, and just add that to the 'cost' of the home-- given historical market returns this requires investment of 25x your annual property taxes, so long as they can't grow faster than inflation). One could also make the case for a public interest in not letting some businesses get pushed out (primarily small, single location businesses).
But prop 13 goes far beyond that-- applying to all property and with extremely expansive portability-- and as a result creates a massive windfall for existing property owners at the expense of new property owners.
I'd like to see at least a rule that for rented properties that assessments should be allowed to increase as much as rents have. There is little to no prevent-displacement justification for not tracking rents.
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Time for the international buyers to buy housing en masse, rent it out, and not pay your income tax. The renters would be stuck paying the income tax and the international buyers would just pay the parcel tax. So renters would be stuck paying for rent and an additional income tax for renting. Hahahahaha.
That's fine, they will pay the parcel tax and their tenants will pay income tax. It seems wrong to me to make someone pay tax where they do not live. It's not like the owners of rental homes are the people who use the city services -- the people who live in the homes do, and they should pay for them.
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Because the money is being used to pay for local services that "you" are enjoying. Someone has to pay the taxes. It is difficult to see a good argument that having been a landholder for a long time gives some sort of moral right to be supported by others.
It's not exactly hard to imagine what problems occur here. You spend a huge chunk of your life saving to buy a home, and you plan it so that you can pay the taxes on it when you retire, then the rest of the city forces you to "enjoy" higher taxes you never demanded, predicted, or wanted, based on an income stream that you no longer have to pay it with, suddenly driving you out of the home/neighborhood/town you worked…
There isn't a solution that is fair, the major activity in the debate over California housing seems to be people turning themselves in knots to find solutions where long time residents enjoy a high-demand city without paying for its upkeep. The goal is for long time residents to reap rewards without doing anything - there is no fair way to do that. It drives inequality too. Rich people tend to own lots of land for long periods of time.
> ...the rest of the city forces you to "enjoy" higher taxes you never demanded [...] or wanted...
I do not hesitate in pointing out this part of your post applies to most taxpayers. I personally disagree with most of what my tax money is spent on, and distrust the people who spend it. That is why it is taxed from me.
We should go with https://en.wikipedia.org/wiki/Georgism - it is fairest over the long term. Moving homes is not so terrible that it has to be prevented at all costs.
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It's kind of insane. But it's also kind of insane that when the housing prices double or triple, you can expect your property tax to go up quite a bit as well, which makes it hard to plan for the future. I think if the value increase cap was raised (gradually) to something like 4-5% per year, you would still have assessed values trailing market values, but not by nearly as much. People could still make worst case pro…
The solution is to let people run a tab with the government. Make the minimum payment the Prop 13 rate, but if there's a change in ownership, you have to pay back the difference plus a fair rate of interest. This ensures that no one has to move because their home appreciated, but it also ensures that no one gets to pay taxes like their home never appreciated, but then pocket appreciation at sale time.
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There are already flat taxes per parcel. So you are taxing an owner of a rental on their total income rather than the income they earn on the property?
What if a corporation owns the property? If you do this, I would transfer the property to a corporation and then rent it back to myself for a $1 a year. The corporation would have only $1 of income per year. This is so badly thought out.
I think I've seen this map before (it isn't loading as I write this). However, what I'd love to see is: What the property taxes are and what they would be if the property was purchased today. I'm not sure if an absolute amount or a percentage would be more impactful when comparing the two. I'm sure it hits hard to see your neighbors paying 10% of what you pay - but probably just as much seeing $2,000 vs $20,000 in as…
I'm not especially inclined to link to it because it falsely claims that no other state has non-mark-to-market property taxes, and for residences that is simply untrue.
This is a good illustration of bad tax policy, specifically Prop 13. Zoom in on a residential street, particularly in the Bay Area, and you will see a row of houses which are roughly equivalent in value. Some homeowners pay several times as much annual property tax as their neighbors, because they bought their homes more recently and paid more for them. That's kind of insane, and nobody would design the property tax…
Many, ... most? states have some kind of homesteading tax relief. For example, in Florida property tax increases are capped to the lesser of 3% or CPI. 25k of value is also exempted from property taxes and 50k is exempted from non-school property taxes. But only for a single primary residential property . Where CA13 is different is that it applies to everything: commercial property, industrial property, rental proper…
It's even worse than that -- it creates a massive incentive not to sell homes.
People who have owned homes for more than just 10 years would see their property taxes double if they sold their homes today and bought another home for the same price elsewhere in the state. The longer you have owned your home, the worse the tax increase becomes.
It's kind of crazy that the people who bought their homes a long time ago, and therefore have realized the most return on investment, pay the least taxes. Meanwhile, people who bought their homes this year, and have made little to no investment return, pay the most taxes of anyone.
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fortunately there is a financial instrument for exactly this situation: the reverse mortgage. it's kind of absurd to treat the quintupling in value of one's home as some sort of hardship.
Unfortunately even the intro on Wikipedia explains some problems with reverse mortgages. Not to mention that it's kind of a lot to force, idk, 80-year-olds to take out reverse mortgages just so they can keep living in homes they've already paid for and own. Though I guess it's not surprising if people half their age don't care about their burden.
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There is actually a negative incentive to sell, because your property taxes will almost certainly go up if you buy another home. It's gotten to the point that we have ballot amendments carving out exceptions for senior citizens, so they can take their old property tax rates with them when they buy new homes, but only if they move between certain counties that have a reciprocity agreement, blah blah blah. Clearly not…
> It's gotten to the point that we have ballot amendments carving out exceptions for senior citizens, so they can take their old property tax rates with them when they buy new homes, but only if they move between certain counties that have a reciprocity agreement, blah blah blah. Clearly not the kind of policy a sane system would result in. And there is another ballot prop on this years' ballot (prop 19) being pushed…
Go read the whole proposition. They supposedly let you do it 3 times. That is the candy. Too bad many counties already let you do it once. So you haven’t gained much if anything. The poison is transfer to children resets the property tax for anything over a million. Now read each proposition and find the candy and then find the poison.