What if prop 13 was never enacted? (Laguna, Laguna Beach: construction, income, sales tax)

[payutenyodagimas]

Originally Posted by ExNooYawk2

My family moved to CA from CT fifteen years ago. The whole concept of Prop 13 was intriguing to me.

In the Northeast outside of NYC, you don't buy a house; you buy a school district. Property taxes pay for schools. Residents with kids are willing to pay the property taxes if it means good schools. You also pay more money for the house in the town with good schools. But. What happens when the kids are up and out is that people move to lower-tax areas. They may flee to places like Florida and vote en masse against property tax increases because their kids aren't in the schools. So, Florida isn't known for it's terrific schools (with some exceptions, I'm sure).

Prop 13 creates its own problems. I knew of a couple who lived in the wife's family home with her mother. They put all four of their kids through the town schools on taxes that hadn't risen significantly since 1978. He was paying a couple of grand a year. Meantime, his neighbor, who moved in recently, was paying upwards of $15k in taxes a year. She had two kids in the schools.

You see the problem, right? Newer residents pay increased taxes to cover for those who are paying at the tax rates of yesteryear.

Perhaps that is a loophole which could be closed. Prop 13 was not meant to benefit families with school-age children in getting out of paying their fair share for schools. It was meant to help people remain in their homes long after the kids were gone.

the county/district can still raise the annual valuation. prop 13 only capped it. don't you think its the govt cost that is the problem?

[phantompilot]

Originally Posted by NewbieHere

I'm sure before you sell your investment, you were here with a different view. This is why I rarely pay attention to what people post online. Most of them are self serving.
Regarding real estate investments, there will always boom and bust. Same with the stock market. Nothing new.

No, I don't think so. You can check my posting history. I've been preparing for a downturn in the housing market for a long while now.

Its really just a cycle thing. Consider it a decadal event. If its a couple years early, that's within the realm of normal. If its a couple of years late, that's also not odd.

I'm out before the event, that's what makes me sleep easier.

[1AngryTaxPayer]

I originally bought my house for 150. Even after the crash of 2008ish my place was still worth 3 times what I paid for it. It's now value listed at 750. Even if there is a "down turn" it will probably still be over 600K. I don't see how anyone would consider that a steal. Coastal housing always goes up. Those that "wait it out" give me a good chuckle. 600K is still 600K.


If I was new to the market I wouldn't even consider beach areas, heck wouldn't even consider CA.

[expatCA]

Originally Posted by 1AngryTaxPayer

I originally bought my house for 150. Even after the crash of 2008ish my place was still worth 3 times what I paid for it. It's now value listed at 750. Even if there is a "down turn" it will probably still be over 600K. I don't see how anyone would consider that a steal. Coastal housing always goes up. Those that "wait it out" give me a good chuckle. 600K is still 600K.


If I was new to the market I wouldn't even consider beach areas, heck wouldn't even consider CA.

Unless of course you are a Rich Lib.

Then they would feel at home.

[phantompilot]

Originally Posted by 1AngryTaxPayer

I originally bought my house for 150. Even after the crash of 2008ish my place was still worth 3 times what I paid for it. It's now value listed at 750. Even if there is a "down turn" it will probably still be over 600K. I don't see how anyone would consider that a steal. Coastal housing always goes up. Those that "wait it out" give me a good chuckle. 600K is still 600K.


If I was new to the market I wouldn't even consider beach areas, heck wouldn't even consider CA.

That's the power (or some would say, the destructive power) of fiat money....you get inflation built into the system.

I don't know when you bought it, but if it was 40 years ago the 150K is now 450K. So its not that 750K is a "steal" per se, just that its not nearly as outrageous as it might seem to a long-term owner.

These people buying now don't really care if its 750K and you paid 150K. They only care that they can afford it right this minute. However, they might legitimately consider it a steal if they wanted to buy it now, wait until the crash, then buy it for 600K, because they were fortunate enough to "time the market"....something most people don't do intentionally (its more accidental or coincidental)

The flip side is that it sucks for the folks that buy at a peak (again, this is not their intention, its just what happens) and then can't afford to stay in a property when the cycle turns. Usually this is a problem long term owners don't face, because they don't have big mortgage payments to make.

[1AngryTaxPayer]

Originally Posted by phantompilot

That's the power (or some would say, the destructive power) of fiat money....you get inflation built into the system.

I don't know when you bought it, but if it was 40 years ago the 150K is now 450K. So its not that 750K is a "steal" per se, just that its not nearly as outrageous as it might seem to a long-term owner.

These people buying now don't really care if its 750K and you paid 150K. They only care that they can afford it right this minute. However, they might legitimately consider it a steal if they wanted to buy it now, wait until the crash, then buy it for 600K, because they were fortunate enough to "time the market"....something most people don't do intentionally (its more accidental or coincidental)

The flip side is that it sucks for the folks that buy at a peak (again, this is not their intention, its just what happens) and then can't afford to stay in a property when the cycle turns. Usually this is a problem long term owners don't face, because they don't have big mortgage payments to make.

My point being, if you can't afford 750k, how can you afford 600k? Why would you even look here? You can get coastal property for half that on a bunch of the US coasts. We bought near 2000. All these people talking about "waiting it out" like friends of mine, ended up pricing themselves out of areas they were looking at. They kept renting high rents, no tax breaks. Any "savings" were lost in tax breaks.
They eventually bought way inland. Whatever "savings" they p*ssed away on rent.

[phantompilot]

Originally Posted by 1AngryTaxPayer

My point being, if you can't afford 750k, how can you afford 600k? Why would you even look here? You can get coastal property for half that on a bunch of the US coasts. We bought near 2000. All these people talking about "waiting it out" like friends of mine, ended up pricing themselves out of areas they were looking at. They kept renting high rents, no tax breaks. Any "savings" were lost in tax breaks.
They eventually bought way inland. Whatever "savings" they p*ssed away on rent.

Coastal property here in CA you bought for 150K? In exactly the same condition it is today? It wasn't vacant land and then you put a 400K home on it? Or it was a fixer you put some equal amount into improvements?
Or is this one of those "tiny home" or studio condos?
What ZIP is it in? I just can't imagine where you can buy anything other than those options for 150K in 2000...prices were low but not that low.

[CA4Now]

Originally Posted by phantompilot

I don't know when you bought it, but if it was 40 years ago the 150K is now 450K .

People who bought 40 years ago have undoubtedly made improvements to their home along the way, each of which is assessed, and which will increase the property tax.

Immediately upon completion of a major remodel or addition (bedroom, swimming pool, etc), a supplemental tax bill is received, reflecting the "new value" of one's home.

[1AngryTaxPayer]

Originally Posted by phantompilot

Coastal property here in CA you bought for 150K? In exactly the same condition it is today? It wasn't vacant land and then you put a 400K home on it? Or it was a fixer you put some equal amount into improvements?
Or is this one of those "tiny home" or studio condos?
What ZIP is it in? I just can't imagine where you can buy anything other than those options for 150K in 2000...prices were low but not that low.

Ya they were. We looked at a large house in La Jolla that was going for less than 300K. It's now valued way over 1 million. Way over.

I did a lot of work on mine but many in the area are original condition for not much less than ours. Zip is 92117.

I have all the old home depot receipts and it came in around 48 grand. I do have a background in construction but most of what I did anyone can do.

Mom and Dad bought theirs in 92111 for 175 around the same time and their view is great.

[thelopez2]

Things were cheap in 98.