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California Property Taxes Mapped

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Re: California Property Taxes Mapped

#61

Post by jjav »

refurb wrote: post #40
mehrdadn wrote: post #24

Earlier quoted context omitted.

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…

What’s really unfair is someone whose home goes from $100k to $2M, for a total capital gain of $1.9M gets a 90% discount on their property taxes. The people with the greatest ability to pay are the ones getting the biggest tax break.

> The people with the greatest ability to pay are the ones getting the biggest tax break.

They don't necessarily have any ability to pay, which is the scenario that brought prop13 to life in the first place (low-income grandma kicked to the street by taxes).

Someone of modest income who bought a modest 100K house years ago isn't cash-flow rich today just because the paper value of their house went up. They are probably retired living on a small social security check and don't have much any ability to pay, let alone the "greatest ability".

It's fine to have different views on how society should handle this tricky scenario, but let's be intellectually honest with the core facts.

Re: California Property Taxes Mapped

#62

Post by nullc »

ladberg wrote: post #37
mehrdadn wrote: post #24

Earlier quoted context omitted.

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…

Then you can just sell your house and buy another one in a less expensive area and make insane profits. The people who support prop 13 are literally lottery winners who are complaining about paying taxes on their winnings. If you don't want to move then you can get a reverse mortgage and still profit, you just won't get to pass the house to your children. Still, you'll make way more from the property value increases…

> Then you can just sell your house and buy another one in a less expensive area and make insane profits.

That is extremely presumptive. Your friends, family, and support infrastructure is all in the place you've been over the last 40 years.

Purchasing another home and moving to it have huge transactional costs.

It would have been completely reasonable to include plans for the reverse mortgage as part of your finical planning already: Americans often have a significant fraction of their net worth tied up in their homes. So that money may well be spoken for. It also may be just unavailable: The city's assessment of your home's value may not match with a lender's assessment.

Think of it this way, if I show up at your town council's office and offer to pay 2x the property taxes you currently pay, should I be able to bid you out of your home? If that wouldn't be ethical, why is it ethical to do it in a distributed way?

I think Prop13 is nuts, but the opposite idea of continually subjecting people's homes to volatile and unpredictable market price based taxes is also nuts.

Re: California Property Taxes Mapped

#63

Post by deepakhj »

danhak wrote: post #55
cameldrv wrote: post #30

Earlier quoted context omitted.

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.

This seems like it might introduce a different perverse incentive for people to remain in their homes indefinitely even if they’d prefer to downsize / move. Might further exacerbate supply / demand issues.

You can allow people to carry it with them if they purchase another home. They should not be able to pass it to their children. It should also only apply to a primary residence. No investment properties or 2nd homes+.

Re: California Property Taxes Mapped

#64

Post by deepakhj »

mehrdadn wrote: post #24
roenxi wrote: post #12

Earlier quoted context omitted.

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…

why does it apply to 2nd or 3rd homes?

It’s an easy policy challenge. Let the person carry the tax until a sale. Or they can carry it until death. It should not pass to kids and the tax assessment is taken at the final sale.

Re: California Property Taxes Mapped

#65

Post by andy-x »

jedberg wrote: post #41

On my block we have five nearly identical houses. My house, which I bought 12 years ago, my neighbors house, which they have been in for 22 years, my other neighbor, who has been there 45+ years, the neighbor two over who bought about five years ago, and the neighbor two over the other way who bought two weeks ago. If my tax bill is X, the rates are as follows, for nearly identical houses, all valued nearly the same…

I don't think so. You lived there for a number of years and you already paid fair taxes and when you bought the property you knew what the taxes are going to be and that allowed you to plan your life. People who are buying it now also know what their taxes are going to be now, and they should thank you for your share of the taxes that you paid over the years to keep community in good shape.

Re: California Property Taxes Mapped

#66

Post by babesh »

twblalock wrote: post #38
babesh wrote: post #31

Earlier quoted context omitted.

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?

No, I'm proposing taxing city residents on their income regardless of whether they own or rent. If the owner of the parcel doesn't live in the city then he wouldn't pay a dime of income tax to the city -- he would pay the parcel tax to the city where the parcel is located, and he would pay income tax wherever he lives.

Another hack. Claim residency in another state or country. Voila your personal income tax for the property disappears and you can live in the home for one day less than six months out of the year. This proposal would be a vacation home rebate. In fact, just keep buying vacation homes. The people stuck living there year round would be screwed.

Another hack. Buy the biggest parcel you can find. Then you can build a huge home and pay the same taxes as the 800 square foot bungalow. Build a bunch of huge vacation homes. The help have to pay for the services. You don’t.

Yet another hack. Build a house and rent it out on AirBnB. That way you only pay the parcel tax and NO ONE pays the income tax. Genius. It’s a discount to run an AirBnB. Better raise the hotel tax to compensate.

Re: California Property Taxes Mapped

#67

Post by jjav »

A see some data in my neighborhood which is weird.

Comparing same model houses only (same as mine), tax rates are in the range of 5K to 8K. But just a couple of the same model houses are shown as $800 to $900! If I didn't know this neighborhood I would jump to the conclusion that those houses have been owned for so long that their taxes are so low and curse prop13.

But, I've been in this neighborhood since it was built so I know the tax was never below 2K even on the first year of constructed.

So either these outliers are just errors in the published records, or is there some tax exemption program in CA for people who qualify to some criteria?

In any case, it does give the impression that the tax range for this model house is $800 to $8K (10x) when that is not true. It is really 5K to 8K.

Re: California Property Taxes Mapped

#68

Post by oceanghost »

roenxi wrote: post #54
mehrdadn wrote: post #24

Earlier quoted context omitted.

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…

Taxes are pretty miserable. A person would be able to afford something. Then taxes happen. Now they can't. 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 anythi…

Is there a correlation though between city expenses and property values for large moves in property value?

Just because property values double doesn't mean the cost of pothole repair doubles?

Re: California Property Taxes Mapped

#69

Post by seiferteric »

refurb wrote: post #40
mehrdadn wrote: post #24

Earlier quoted context omitted.

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…

What’s really unfair is someone whose home goes from $100k to $2M, for a total capital gain of $1.9M gets a 90% discount on their property taxes. The people with the greatest ability to pay are the ones getting the biggest tax break.

The part that doesn't make sense to me is that if your property value 20x's, your value from tax does not go up by 20x, so why is property tax linked to the market value of the property anyway?

Re: California Property Taxes Mapped

#70

Post by lambdaops »

jedberg wrote: post #41

On my block we have five nearly identical houses. My house, which I bought 12 years ago, my neighbors house, which they have been in for 22 years, my other neighbor, who has been there 45+ years, the neighbor two over who bought about five years ago, and the neighbor two over the other way who bought two weeks ago. If my tax bill is X, the rates are as follows, for nearly identical houses, all valued nearly the same…

I grew up with the schools here back in the 90s and we largely couldn't pass new parcel taxes because "their kids already went through school and they didn't need it". They were more concerned with all the growing crime, which you would think that maybe the lack of after school programs and growing unaffordability for everyone else was part of the issue.
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