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California Property Taxes Mapped

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Re: California Property Taxes Mapped

#81

Post by thaumasiotes »

babesh wrote: post #19
twblalock wrote: post #9

Earlier quoted context omitted.

Maybe the solution is to stop making property tax the main way that cities are funded. Among other things, this method of taxation tightly couples school funding to local home values. Areas with expensive homes have the best schools. (And areas with cheap homes have bad schools, which is not really what you want if you are trying to do something about inter-generational poverty.) This is self-reinforcing because now…

This comment is wrong on a fundamental basis. Richer areas get less state funding than poorer school districts. These districts have to scramble to just narrow the gap rather than have more funding. The richer areas have higher scoring schools because wealth correlates with school scores probably due to a combination of natural ability and a more conducive parental and community environment (all multiplicative and co…

> The richer areas have higher scoring schools because wealth correlates with school scores probably due to a combination of natural ability and a more conducive parental and community environment

True enough.

> Richer areas get less state funding than poorer school districts.

Also true.

> These districts have to scramble to just narrow the gap rather than have more funding.

The necessity of narrowing the gap is not at all obvious; as you point out, test scores correlate with local wealth. But test scores also correlate with per-pupil spending -- and that correlation is (1) small; and (2) negative. This is easy to explain with the model "poor students attract spending", but you also need the coda "...and it doesn't accomplish much".

Re: California Property Taxes Mapped

#82

Post by cheriot »

majormajor wrote: post #45
ladberg wrote: post #37

Earlier quoted context omitted.

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…

"Congrats, you have won the lottery, now you have to move somewhere way cheaper - probably because it doesn't have many of the features that drew you here in the first place!" "All because a bunch of people with more money than you are now willing to pay a bunch of money for your neighbors' places." I think laws and policy should exactly be focused on protecting those who have less from the impact of those who have m…

> "All because a bunch of people with more money than you are now willing to pay a bunch of money for your neighbors' places."

You're missing the part where city policy creates the housing shortage. It's the city that approves zoning for a huge number of offices and then refuses to allow more homes. The homeowners reaping these massive rewards are who vote in favor of the housing shortage.

There's easy ways to deal with the down sides of increasing property values. Delay the payment to sale or even tax the value from some number of years ago.

> Moving is hugely disruptive to people's life

The housing shortages in CA are doing this to renters and anyone else that's forced to move. Older couple that can't handle stairs, growing family, etc.

Prop 13 is a horrible way to address any of these problems.

Re: California Property Taxes Mapped

#83

Post by seiferteric »

babesh wrote: post #66
twblalock wrote: post #38

Earlier quoted context omitted.

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 hug…

Pretty sure that won't work. CA is famous for vigorously going after people trying to doge taxes like this, and the rules for residency/part year residency are pretty stringent for what taxes you will owe.

Re: California Property Taxes Mapped

#84

Post by umeshunni »

jjav wrote: post #67

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 bui…

> is there some tax exemption program in CA for people who qualify to some criteria?

There are exemptions which allow some people (seniors and people with disabilities I think) to be "portable" with their property taxes. I.e they can buy a new property and the taxes of their old property transfer over to the new one..

Edit: found this https://www.boe.ca.gov/proptaxes/prop60-90_55over.htm

Re: California Property Taxes Mapped

#85

Post by babesh »

seiferteric wrote: post #83
babesh wrote: post #66

Earlier quoted context omitted.

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 hug…

Pretty sure that won't work. CA is famous for vigorously going after people trying to doge taxes like this, and the rules for residency/part year residency are pretty stringent for what taxes you will owe.

Look up the law. I know of law abiding people who do exactly this. Live in Vegas and come back to California once in awhile.

Re: California Property Taxes Mapped

#86

Post by babesh »

thaumasiotes wrote: post #81
babesh wrote: post #19

Earlier quoted context omitted.

This comment is wrong on a fundamental basis. Richer areas get less state funding than poorer school districts. These districts have to scramble to just narrow the gap rather than have more funding. The richer areas have higher scoring schools because wealth correlates with school scores probably due to a combination of natural ability and a more conducive parental and community environment (all multiplicative and co…

> The richer areas have higher scoring schools because wealth correlates with school scores probably due to a combination of natural ability and a more conducive parental and community environment True enough. > Richer areas get less state funding than poorer school districts. Also true. > These districts have to scramble to just narrow the gap rather than have more funding. The necessity of narrowing the gap is not…

They need enough to pay for teachers, administrators, facilities, and the supplemental education that better off folks love: debate, music, sports, speech therapy, early reading help, etc... That extra money has very high return.

Re: California Property Taxes Mapped

#87

Post by yonran »

seiferteric wrote: post #4
twblalock wrote: post #2

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…

Counterpoint: Why should your property taxes go up just because the market around you skyrockets, when this is completely outside of your control? The bay area is a prime example of this.

> Why should your property taxes go up just because the market around you skyrockets, when this is completely outside of your control?

The fallacy of the argument for tax breaks to homeowners is that the problem of rising prices is entirely orthogonal to homeownership. Renters face the exact same challenge of affording to live in an increasingly popular place, except without the cushion of an appreciating asset and without any tax relief under Proposition 13. If renters and homeowners face the exact same problem, then clearly subsidies to property owners is not the solution.

The finances of homeownership should be decomposed into two parts: 1) the rental cost of the property, and 2) what fraction of the rent goes to the government in property taxation.

The remedy for rising rents is obvious: more construction of housing and rental subsidies to the poor. This is how to address the underlying problem for homeowners and especially for renters. Temporary rent controls and tax caps can also be helpful to provide relief for people who were caught off guard by the rapid changes. Note that the solution should help all those who are affected by the problem, not only the ones who own more assets.

When property values are rising, this is not an excuse to enact regressive tax breaks for property owners; that just makes inequality worse without solving the underlying problem of lack of housing, which then becomes worse for renters and future homeowners. Property taxation is the most progressive form of taxation available to local governments, and if anything tax rates should be increased when there is a property value boom in order to reduce the incentive to speculate on land prices and to raise money to solve the problems associated with inequality such as homelessness. Basically, when I bought a house in San Francisco, I paid a windfall of a few hundred thousand dollars to the previous owner, who took that money out to a different county. It would have been better for the city to collect that money and use it to incentivize housing construction and subsidize the poor in the city, rather than to let it be lottery winnings to the person who left.

Re: California Property Taxes Mapped

#88

Post by Gibbon1 »

seiferteric wrote: post #32
pc86 wrote: post #27

Earlier quoted context omitted.

Then you move. That's how it works; if you can't afford the property taxes, you can't afford to live there.

The image of 90 year old widows being forced out of their home was how prop 13 was passed so...

Lot of other states have laws that either cap or defer property taxes for retired people. Not much reason California couldn't do the same.

Re: California Property Taxes Mapped

#89

Post by roenxi »

oceanghost wrote: post #68
roenxi wrote: post #54

Earlier quoted context omitted.

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?

Pretty much must be, because the city is spending the money on something. If the city isn't using the money on something essential, they could reduce taxes.

Might be a struggle to get tax reductions past the voting public. But I think a bit of political elbow grease could get it done.

Re: California Property Taxes Mapped

#90

Post by Gibbon1 »

tzs wrote: post #77
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.

The cost to the city/county to provide those local services does not depend on the current market value of my house or my neighbor's houses. What the service costs depend on is how many houses are in an area, or how many people are in an area.

Lot of government services have a large labor component. The cost of labor is very strongly influenced by cost of rent. Rents increase along with property prices.
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