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So you want to kick old people out of their homes they have lived in all their lives so yuppies can move in to them.
That sounds really "fair".
So you want to impoverish a generation of workers so that a bunch of oldsters don't have to change their lifestyle? That doesn't sound fair either.
Value judgements such as yours, and mine mimicking yours above, can cut both ways. Everyone has their own perspective and no group is intrinsically more worthy than another. When competing for scarce goods, the fairest systems weight ability to pay heavily when setting prices. Subsidizing one group over another, usually for political reasons, leads to inefficiency and waste.
I should clarify that in the context of California real estate, "newcomers" and "incumbents" are imprecise terms which probably align with the ability to pay for the costs of purchasing and holding real estate. In other words, newcomers are probably better able to afford real estate costs than incumbents, because newcomers probably make more money.
If someone has lived in the same house for 40 years, and they can afford to pay real estate taxes at recently assessed values, and not values assessed 40 years ago, then they absolutely deserve to keep their home. However if they cannot, then they don't deserve to keep their home.
Except you don't keep paying for it, because your property's assessed value only changes when it is sold. That's highly unusual, and highly unfair. Many people in places like New Jersey are forced to sell their properties because they cannot afford the property taxes after a reassessment. This increases supply for newcomers, and leads to more economic efficiency by removing a market distortion in favor of incumbents.
All of the homeowners telling newcomers to roll up their sleeves and pay the piper are neglecting to confront that they themselves have not paid the piper in a long time, and the assessed values of their properties are ridiculously low. A rolling assessment cycle that reassesses all properties on some schedule is much fairer than the regime created by Proposition 13.
First... it is not the goverment's job or mission to force people from their homes...
Second... the property Assessment in California changes every year... it may go up or down... if it goes up it is subject to a 2% annual cap.
I have lived in a State where the Assessment increased 80% on one year... never again will I subject my family to this...
California for all it's problems at least go property taxes right... and this is coming from someone that was too young to have voted for Prop 13 when it became law and also from one who pays the highest property tax for the oldest and smallest home on the block.
There would have been NO prop 13 had the legislature simply indexed the Home Owner Exemption for inflation... at one time the $7500 exemption had real value when a modest home in many parts of California could cost 12 to 15k...
Sacramento was all to happy to let the voters decide never imagining just how fed up people were at double digit tax increases, fraud and corruption in the Assessor Offices and the Serrano Decision which sent local school tax dollars Sacramento for distribution as Sacramento saw fit... it was one thing to pay higher taxes for local schools and something else when local money was taken out of the community.
People do not live forever... the posts of some seem all to ready to kick Grandma to the curb is the height of unfairness... in my neighborhood it is what it is because almost all of my neighbors have lived in their homes for 50+ years... and I fully intend to by one in a 30 or 40 years.
Are you confusing capital gains taxes with property taxes? Property taxes on real estate whose value is only reassessed at the time of sale absolutely favors long-time owners.
Not at all... Prop 13 is quite clear... Property in California continues to be reassessed and the time of transfer only sets the base year value.
So you want to impoverish a generation of workers so that a bunch of oldsters don't have to change their lifestyle? That doesn't sound fair either.
Value judgements such as yours, and mine mimicking yours above, can cut both ways. Everyone has their own perspective and no group is intrinsically more worthy than another. When competing for scarce goods, the fairest systems weight ability to pay heavily when setting prices. Subsidizing one group over another, usually for political reasons, leads to inefficiency and waste.
I should clarify that in the context of California real estate, "newcomers" and "incumbents" are imprecise terms which probably align with the ability to pay for the costs of purchasing and holding real estate. In other words, newcomers are probably better able to afford real estate costs than incumbents, because newcomers probably make more money.
If someone has lived in the same house for 40 years, and they can afford to pay real estate taxes at recently assessed values, and not values assessed 40 years ago, then they absolutely deserve to keep their home. However if they cannot, then they don't deserve to keep their home.
I take real issue that someone has to be able to Deserve the home they bought and paid for.
My neighbors long ago paid the improvement bonds for roads, school, drainage, lighting, sewer, etc that I get to enjoy simply by choosing to buy my home after these costs have long been paid.
If the desire is to parse then how is it at all fair that individuals with no children pay for public schools... nearly half of Property Tax dollars go to education???
Or more specific, as a resident of both Oakland and Alameda County I am stuck with long term bonds that paid for the coliseum alterations so the Raiders Football Franchise would come back... I have never attending a Raider Game and to add insult... the bonds have years to go and the team is moving to Las Vegas...
There are plenty of unfair things when it comes to taxes but Prop 13 isn't one of them.
Last edited by Ultrarunner; 03-05-2018 at 09:05 PM..
First... it is not the goverment's job or mission to force people from their homes...
Second... the property Assessment in California changes every year... it may go up or down... if it goes up it is subject to a 2% annual cap.
I have lived in a State where the Assessment increased 80% on one year... never again will I subject my family to this...
California for all it's problems at least go property taxes right... and this is coming from someone that was too young to have voted for Prop 13 when it became law and also from one who pays the highest property tax for the oldest and smallest home on the block.
There would have been NO prop 13 had the legislature simply indexed the Home Owner Exemption for inflation... at one time the $7500 exemption had real value when a modest home in many parts of California could cost 12 to 15k...
Sacramento was all to happy to let the voters decide never imagining just how fed up people were at double digit tax increases, fraud and corruption in the Assessor Offices and the Serrano Decision which sent local school tax dollars Sacramento for distribution as Sacramento saw fit... it was one thing to pay higher taxes for local schools and something else when local money was taken out of the community.
People do not live forever... the posts of some seem all to ready to kick Grandma to the curb is the height of unfairness... in my neighborhood it is what it is because almost all of my neighbors have lived in their homes for 50+ years... and I fully intend to by one in a 30 or 40 years.
It's not the government's job to make it nearly impossible to buy property in the first place, but that's what happens in California. The government is supposed to enforce policies neutrally and not pick favorites.
If assessment rises are capped at 2% then they track inflation. In fact Proposition 13 stipulates that assessed value increases are limited to 2% or the inflation rate, whichever is less. In real terms the assessed value can only decline. That's a pretty neat trick to gloss over.
If the value of property becomes more valuable over time, as California property has because of the rise in local salaries and the increased awareness of the amenities of California, then why shouldn't existing homeowners have to pay more in taxes, and pay the same amount in taxes as new buyers? Owning an asset isn't just about purchasing it. You also need to maintain and defend it.
Given that you can inherit homes without a reassessment under Propositions 58 and 193, I hardly see how the death of the original purchaser will put much of a dent in the scarcity of houses. It is literally an inherited privilege to pay lower taxes.
I take real issue that someone has to be able to Deserve the home they bought and paid for.
Then stop paying your property taxes, as they are, and see how that works out. The running costs of asset maintenance cannot be legislated away, nor can the appreciation of desirable assets beyond the ability of the original holders to afford those maintenance costs. It is, as you would say, what it is.
It's not the government's job to make it nearly impossible to buy property in the first place, but that's what happens in California. The government is supposed to enforce policies neutrally and not pick favorites.
If assessment rises are capped at 2% then they track inflation. In fact Proposition 13 stipulates that assessed value increases are limited to 2% or the inflation rate, whichever is less. In real terms the assessed value can only decline. That's a pretty neat trick to gloss over.
If the value of property becomes more valuable over time, as California property has because of the rise in local salaries and the increased awareness of the amenities of California, then why shouldn't existing homeowners have to pay more in taxes, and pay the same amount in taxes as new buyers? Owning an asset isn't just about purchasing it. You also need to maintain and defend it.
Given that you can inherit homes without a reassessment under Propositions 58 and 193, I hardly see how the death of the original purchaser will put much of a dent in the scarcity of houses. It is literally an inherited privilege to pay lower taxes.
I was waiting for the 58 and 193 to be brought up...
It is a neat trick since both are separate propositions that came about well after Prop 13.
Homes are selling as fast as they hit the market... to say people cannot afford them makes no sense...
Until recently, 40% of Bay Area Home Sales were Cash Sales.
You do make an excellent point about rise of salaries... it is one of the reasons behind Prop 13... starve the Sacramento Beast and let local voters vote on local assessments...
The voters in my city have been very generous when it comes to taxing Property owners... there are over 20 voter approved special assessments... so the mechanism for raising additional monies in Prop 13 clearly works.
I'm not political but will certainly canvass my neighborhood and make trips to Sacramento to defend Prop 13... again, I pay the highest property taxes for the smallest and oldest home...
You would think I would envy of be jealous of my seasoned senior neighbors but that would be the farthest from the truth...
What keeps property in check is the vast cost of new construction... my home has no special earthquake features... the home next door which pays less in property tax than I do had 200k spent on grading and seismic engineering measures... the concrete and steel trucks were a sight to behold and all it did was provide the foundation... 24' deep rebar cages throughout filled with concrete... again... I have no measures engineered but my taxes are higher buying in 2004 then theirs buying in 2010 as a bank owned property...
The beauty of Prop 13 is that each sales stands on it's own... plus homeowners are not subject to someone's best guess of property value...
It takes well over two years to contest a property valuation through the appeal process... a fee is collected and taxes as billed must be paid... I know... I have appealed and won every time... prices fell that much and the selling price of my neighbors foreclosure was my proof.
Last edited by Ultrarunner; 03-05-2018 at 10:31 PM..
Then stop paying your property taxes, as they are, and see how that works out. The running costs of asset maintenance cannot be legislated away, nor can the appreciation of desirable assets beyond the ability of the original holders to afford those maintenance costs. It is, as you would say, what it is.
California actually had this program for seniors where they could stop paying their taxes as long as they occupied the home... the program stopped when Real Estate imploded... what Sacramento gives it can take away... thank goodness the voters have the initiative process.
Maintenance is a huge variable and my profession as a Hospital Director of Engineering makes this topic one I deal with everyday...
My parents were most frugal but Dad never skimped on quality... he never skimped on roofing... pay for it once and be done... but good paint, seal and caulk and apply properly...
Much of what gets classified as maintenance is simply changing tastes... a 65 year old Formica Counter top is just as serviceable today as it was new... same for a 1950 Cast Iron Tub... etc.
My home has the original Formica and Lino floors... original baths and kitchen... all circa 1957... I bought the home from the original owner and they had one child... everything totally serviceable...
The electorate of California legislated the Property Tax aspect making it possible for those of modest means to both pay their taxes and maintain their property...
The nicest homes here are those with 80 years olds of very modest means... their yards are park like and they spend countless hours maintaining them...
Many would argue a home is not an asset but a liability...
The day I bought my home in 2004 the taxes went from $1200 to $8800... and now pushing $12,000 because the voters are very generous when it comes to passing assessments.
Again... I fully intend to be the one with the lower taxes after paying my dues in the coming years.
Following in Dad's footsteps... i just replaced the original Shake Roof and since the Shake is no longer allowed had to sheathed over the skip-sheathing... the new roof using lifetime shingles, double felt, flashing, etc with 27k... about what the entire home cost new in 1957.
So do you believe generational favoritism for existing property owners will lead to a more equal society? It sounds more like feudalism than progressivism to me...
Do you believe in Capitalism, and investing? When you buy property, or stocks you are buying to use the TIME VALUE OF MONEY, capital appreciation, and internal rate of return. etc. What you call "Generational Favoritism" is just investment growth. Nobody owes "inclusiveness". There are no guarantees for equal status, just equal opportunity. You sound very Marxist to me.
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