Explain Why I shouldn't Vote "NO" on Proposition 5 (Los Angeles: rental, condo)

[JGC97]

Originally Posted by NoMoreSnowForMe

I agree. And the thing is, the better the schools, the higher the property values. So, it always benefits property owners to have better schools, regardless of whether or not they have kids in them currently. I think most people understand that, who understand what affects their property values, at least.

Yes, I'm sure most people understand that, too. It's only a scattered few around here who don't. Thankfully, their opinions don't reflect the rest of the population.

Spoiler

BTW, got your message. That sucks. I'm going to ask a friend of mine here to see if anything can be done. On the down low, of course

[Bill the Butcher]

Why55? If this is supposed to help out the elderly the minimum age should have been set at 62 or 65.

I don’t personally see a need for this law. Why not let everyone play by the same rules? If an elderly couple, talking 65 and not 55 has lived in their house for 30+ years it should be just about payed off and they should have a lot of equity. That equity should more than cover an increased tax bill. If they don’t have the equity because they didn’t live within their means or prioritized paying for their kids college above their retirement that is something they will have to live with.

[Bill the Butcher]

It's ironic that Prop 13 was passed to keep Grandma and Grandpa in their house. And now Prop 5 is needed to get them out of their house.

[Bill the Butcher]

Originally Posted by Sparrow_temp

The people they should be giving a deduction to are those that don't have children since most of these property taxes are supposed to be going to the school systems.

Disagree. Even if you don't have kids you are benefiting from those that do. Who is going to buy your house 20 or 30 years down the road? Not your kids. Someone else's kids. Better hope they are educated by that school system and have a well paying job so they can buy your home.

[JJonesIII]

Originally Posted by Bill the Butcher

Why55? If this is supposed to help out the elderly the minimum age should have been set at 62 or 65.

I don’t personally see a need for this law. Why not let everyone play by the same rules? If an elderly couple, talking 65 and not 55 has lived in their house for 30+ years it should be just about payed off and they should have a lot of equity. That equity should more than cover an increased tax bill. If they don’t have the equity because they didn’t live within their means or prioritized paying for their kids college above their retirement that is something they will have to live with.

Interesting. I guess you're implying using their equity to pay property taxes. So are you suggesting a reverse mortgage loan for those people living on fixed incomes? It would seem to me that if they have lived in their house for 30+ years, depending on what area they lived in, the market price on the new home might be upwards of 5x-6x more. That would equate in San Francisco going from roughly $250k to say $1.5 million. That couple would probably pay about $10k more annually in property taxes. And if they live into their late 80's or 90's, you've probably increased their expenses by $600k-$750k (using standard rate of inflation of 3% as most people's taxes are doubling every 20 years). From a practical standpoint, I have no idea why anyone would do this (why would someone want to spend a substantial part of their retirement nest egg and give it to the government or in the case of a reverse mortgage, simply give their house away?). So the alternative, as stated earlier in this thread is no movement in homes. People that want to downsize will not, and there will be less homes for young families wanting to move into the area, driving up demand and prices. If you think that's cool and that's the direction you'd prefer the state go in, fair enough. Personally, my wife and I have every intention of willing our home to our children and we would never consider moving if we had a step up in basis. I have no idea why people keep characterizing this as only a benefit to old people (that's pretty backward type thinking). It is just as much a benefit to young families as they need movement in homes and for people to downsize which is a natural progression for many people entering their retirement years.

[Bill the Butcher]

Originally Posted by JJonesIII

So the alternative, as stated earlier in this thread is no movement in homes. People that want to downsize will not, and there will be less homes for young families wanting to move into the area, driving up demand and prices. If you think that's cool and that's the direction you'd prefer the state go in, fair enough. Personally, my wife and I have every intention of willing our home to our children and we would never consider moving if we had a step up in basis.

As I mentioned, ironically, that is exactly why Prop 13 was passed. Why do we now need a proposition to do the opposite?

But as I continue reading up on Prop 5, as other's have mentioned, the law already allows for those over 55 to keep their current property tax basis if they move in the same county, or a cooperating county provided the new home is the same price or less than the original home.

The real kick to the balls with Prop 5 is allowing those over 55 to continue to get the benefits of Prop 13 even if they move to a more expensive home. That just doesn't make sense. They should have left that part out and just tried to change the law to be state wide.

[JJonesIII]

Originally Posted by Bill the Butcher

As I mentioned, ironically, that is exactly why Prop 13 was passed. Why do we now need a proposition to do the opposite?

But as I continue reading up on Prop 5, as other's have mentioned, the law already allows for those over 55 to keep their current property tax basis if they move in the same county, or a cooperating county provided the new home is the same price or less than the original home.

The real kick to the balls with Prop 5 is allowing those over 55 to continue to get the benefits of Prop 13 even if they move to a more expensive home. That just doesn't make sense. They should have left that part out and just tried to change the law to be state wide.

I think I pretty much covered the reasons why and the benefits to others (no reason to limit it to counties...the state simply needs movement). Sorry you're choosing not to recognize that. You either want movement or you don't. It's no skin off of any senior's back to stay put if that's what you'd prefer.

[Bill the Butcher]

Originally Posted by JJonesIII

Interesting. I guess you're implying using their equity to pay property taxes. So are you suggesting a reverse mortgage loan for those people living on fixed incomes? It would seem to me that if they have lived in their house for 30+ years, depending on what area they lived in, the market price on the new home might be upwards of 5x-6x more. That would equate in San Francisco going from roughly $250k to say $1.5 million. That couple would probably pay about $10k more annually in property taxes. And if they live into their late 80's or 90's, you've probably increased their expenses by $600k-$750k (using standard rate of inflation of 3% as most people's taxes are doubling every 20 years). From a practical standpoint, I have no idea why anyone would do this (why would someone want to spend a substantial part of their retirement nest egg and give it to the government or in the case of a reverse mortgage, simply give their house away?)

I don't know anything about reverse mortgages so I'm not talking about someone taking one on.

With regards to property taxes. They will have to be paid either from current savings, pension, income or left over equity after sale of old house and purchase of new home. Where that money to pay for the property taxes comes from doesn't matter. It will just come from their nest egg which is all of those savings and incomes combined.

[Bill the Butcher]

Originally Posted by JJonesIII

It's no skin off of any senior's back to stay put if that's what you'd prefer.

I've read arguments about seniors wanting to downsize. Seniors wanting to move to single story homes. So there may be some skin involved.

[JJonesIII]

Originally Posted by Bill the Butcher

I don't know anything about reverse mortgages so I'm not talking about someone taking one on.

Well, if they're living on a fixed income and SS, they are going to need to get the money from somewhere. As stated in my previous post, depending on the area, this might be and increase of $600-$750k through their retirement years in property taxes

Originally Posted by Bill the Butcher

With regards to property taxes. They will have to be paid either from current savings, pension, income or left over equity after sale of old house and purchase of new home. Where that money to pay for the property taxes comes from doesn't matter. It will just come from their nest egg which is all of those savings and incomes combined.

Repeating again, from a practical reason, why would anyone do that? People will just stay put and families that need bigger houses will do without. Like I said, I really don't think it's all that big of a deal to a senior if they just stay put. I think you're really confused as to the reasoning and benefits of this proposition. It's about movement (and in particular, an incentive to get seniors out of their homes...most of which will downsize, and open up bigger homes for families). If you feel this is just a cash grab for seniors, then you should vote against it and keep movement of homes stagnant. And where that money comes from certainly does matter as many of us would like to bequeath an inheritance to our children instead of give it to the government (and that is solely our option regardless of how voters want to vote).