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Old 03-05-2018, 10:50 PM
 
Location: Living rent free in your head
30,893 posts, read 13,410,298 times
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Quote:
Originally Posted by Avondalist View Post
And California is ground zero for dishonest progressivism serving selfish interests.
How did you reach that conclusion? It always interests me when people make such sweeping generalizations about a state with a population of 40 million people.
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Old 03-05-2018, 10:54 PM
 
Location: Living rent free in your head
30,893 posts, read 13,410,298 times
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Quote:
Originally Posted by Avondalist View Post
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.
You live in Illinois, right? Illinois has the second highest property rate in the US but you start a thread to argue against prop 13?
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Old 03-05-2018, 11:05 PM
 
Location: Living rent free in your head
30,893 posts, read 13,410,298 times
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Quote:
Originally Posted by Avondalist View Post
Millions of young people never owning homes is not good either. Why should the elderly homeowners be advantaged? An age-neutral property tax system that assessed properties periodically rather than upon sale is fair to everyone, whereas the current system favors long-time owners.
That's your opinion and you are entitled to it but I don't think there is one single rational argument to support it. Nevada almost had a taxpayer revolt before they changed the way property taxes are calculated, in the past the appraiser could drive by your house, look at a few comps and increase the basis of your house by 50% (they did it to most of the homes in Incline Village) property owners were being forced out of their homes, they protested and sued Washoe County and the state changed the law. Now homes are still reappraised at least once every five years but your property tax can only go up 3% a year regardless of the new appraisal. The downside of their tax law is that if your property is appraised with a 15% increase and then your property value drops your taxes continue to go up 3% every year until the 15% reappraisal increase is met, if the property value has not gone back up it is the tax basis is then based on the reduced value of the home.
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Old 03-06-2018, 11:41 AM
 
26,579 posts, read 52,030,507 times
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Quote:
Originally Posted by 2sleepy View Post
You live in Illinois, right? Illinois has the second highest property rate in the US but you start a thread to argue against prop 13?
I was wondering the same... brother's in laws have been in Illinois for generations and slowly they have left... one of the reasons cited was taxes...
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Old 03-06-2018, 11:56 AM
 
Location: Living rent free in your head
30,893 posts, read 13,410,298 times
Reputation: 21991
Quote:
Originally Posted by 2sleepy View Post
That's your opinion and you are entitled to it but I don't think there is one single rational argument to support it. Nevada almost had a taxpayer revolt before they changed the way property taxes are calculated, in the past the appraiser could drive by your house, look at a few comps and increase the basis of your house by 50% (they did it to most of the homes in Incline Village) property owners were being forced out of their homes, they protested and sued Washoe County and the state changed the law. Now homes are still reappraised at least once every five years but your property tax can only go up 3% a year regardless of the new appraisal. The downside of their tax law is that if your property is appraised with a 15% increase and then your property value drops your taxes continue to go up 3% every year until the 15% reappraisal increase is met, if the property value has not gone back up it is the tax basis is then based on the reduced value of the home.
I can't still edit this but learned something I didn't know about Nevada property tax, so thought I would add it. I was wrong, homes are not reappraised when sold, taxes are based on the value prior to the sale with a limit of 3% per year increase, it looks like they are passed an initial bill to partially change that but Nevada is kind of weird the bill has to be heard again in 2019 before it can be passed .

Also, unlike California where all property tax increases are limited to 2% a year in Nevada commercial property can be increased by 7% a year.
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Old 03-06-2018, 01:35 PM
 
12,015 posts, read 6,613,876 times
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Quote:
Originally Posted by Avondalist View Post
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.
They didn't buy their homes as investment properties, they bought them to live in for the long term. It wasn't the deal when they purchased their property that their towns would become what they have become in 2018. They were buying into and living the middle class lifestyle. High property values do them no good if they want to die in their lifetime homes.

They are defending their properties through prop 13, so they can keep them.

And when they pass their kids will sell the house for some insane amount, get their stepped up basis and make a killing tax free.

New owner starts with fresh assessment and taxes. They can afford it. They just had to wait their turn.
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Old 03-06-2018, 01:45 PM
 
1,675 posts, read 573,602 times
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Quote:
Originally Posted by Ultrarunner View Post
I was wondering the same... brother's in laws have been in Illinois for generations and slowly they have left... one of the reasons cited was taxes...
I support rolling reassessments because:

1) They treat all property owners the same. Not reassessing property values on a fixed schedule, or limiting the growth in those assessments, will lead to taxing owners at different amounts for comparable properties, depending on when the property was purchased. Although the tax rate must be uniform across all property owners, the tax amount is the product of the assessed value and the rate. If the assessed value is not made uniform for comparable properties, then it's an equity issue. I hope you can see this issue from multiple perspectives, including those of the young, rather than focusing your take on the subject through your own lens of self-interest.

2) They increase the supply of housing in markets with scarce supply by forcing those who cannot pay rising taxes to sell. In Illinois, house prices are actually quite affordable given incomes. This is due in part to the assessment regime (and the lack of urban growth boundaries, the second complaint in the OP). Taxes are high, and there is some chicanery around assessed value, but there is nowhere near the bifurcation and inequity as is found in California. In fact, taxes must be high to suppress prices in desirable areas. This shifts the balance of power towards new entrants to the housing market, giving people a chance to buy into the housing ladder. It shifts power away from long-time owners, power which in California is allocated quite lopsidedly. The shifting of power from old to young in Illinois as compared to California is fairer and more equitable.


As far as people leaving Illinois, I don't know if you have been reading the headlines but California, and especially the Bay Area, is facing an exodus of residents because of real estate costs. Moreover these leavers are disproportionately young. Personal anecdotes notwithstanding, people are voting with their feet. Being forced to sell your house and decamp for Arizona after you retire from your job in Illinois is far better for wealth-building than never being able to buy a house at all in California.

If you won the California lottery and bought years ago, then congratulations, the system has worked for you. But claiming that the property tax regime in California treats everyone equally, does not have losers to go along with the winners, and that the losers are not concentrated among the young, is magical thinking and callous. I understand the elderly taxed out of their homes would find my take callous, but good policy is about finding a balance, and California's property tax system is completely out of whack in favor of long-time owners.
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Old 03-06-2018, 01:52 PM
 
1,675 posts, read 573,602 times
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Quote:
Originally Posted by Pilot1 View Post
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.
Equal opportunity means equal treatment under tax laws. The appreciation of California properties is not just due to the time value of money - it's also due to preferential treatment for long-time owners. Which in turn induces them not to sell, reducing supply and driving up prices even more. Any savvy businessman will tell you the best way to make money is to rig the laws in your favor - that has nothing to do with free market capitalism. That's crony capitalism.
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Old 03-06-2018, 01:56 PM
 
Location: Living rent free in your head
30,893 posts, read 13,410,298 times
Reputation: 21991
Quote:
Originally Posted by Avondalist View Post
I support rolling reassessments because:

1) They treat all property owners the same. Not reassessing property values on a fixed schedule, or limiting the growth in those assessments, will lead to taxing owners at different amounts for comparable properties, depending on when the property was purchased. Although the tax rate must be uniform across all property owners, the tax amount is the product of the assessed value and the rate. If the assessed value is not made uniform for comparable properties, then it's an equity issue. I hope you can see this issue from multiple perspectives, including those of the young, rather than focusing your take on the subject through your own lens of self-interest.

2) They increase the supply of housing in markets with scarce supply by forcing those who cannot pay rising taxes to sell. In Illinois, house prices are actually quite affordable given incomes. This is due in part to the assessment regime (and the lack of urban growth boundaries, the second complaint in the OP). Taxes are high, and there is some chicanery around assessed value, but there is nowhere near the bifurcation and inequity as is found in California. In fact, taxes must be high to suppress prices in desirable areas. This shifts the balance of power towards new entrants to the housing market, giving people a chance to buy into the housing ladder. It shifts power away from long-time owners, power which in California is allocated quite lopsidedly. The shifting of power from old to young in Illinois as compared to California is fairer and more equitable.


As far as people leaving Illinois, I don't know if you have been reading the headlines but California, and especially the Bay Area, is facing an exodus of residents because of real estate costs. Moreover these leavers are disproportionately young. Personal anecdotes notwithstanding, people are voting with their feet. Being forced to sell your house and decamp for Arizona after you retire from your job in Illinois is far better for wealth-building than never being able to buy a house at all in California.

If you won the California lottery and bought years ago, then congratulations, the system has worked for you. But claiming that the property tax regime in California treats everyone equally, does not have losers to go along with the winners, and that the losers are not concentrated among the young, is magical thinking and callous. I understand the elderly taxed out of their homes would find my take callous, but good policy is about finding a balance, and California's property tax system is completely out of whack in favor of long-time owners.
I will venture a guess that 80-90% of California residents disagree with you. Reassessing a house every few years isn't going to make taxes cheaper for a new home buyer, it will just raise taxes on long term homeowners so that many of them will be pushed out of their home, but that seems to be a good idea to you, it will give "new entrants" a chance to buy a home.

That's not only wrong headed but it defies logic because anyone buying a house in California today will realize the same benefit when they get old that long time homeowners currently do. They are not being put at any disadvantage..and if you wanted to buy a home in California and couldn't afford to, it just might be that you were only looking for a home in the most expensive areas of California. There are plenty of nice places to live in California with affordable homes.

The only adjustments that I think need to be made to prop 13 is to increase the annual percentage increase for commercial properties and tighten up the loopholes that allow corporations to buy property and avoid reappraisal.
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Old 03-06-2018, 01:58 PM
 
1,675 posts, read 573,602 times
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Quote:
Originally Posted by tamajane View Post
They didn't buy their homes as investment properties, they bought them to live in for the long term. It wasn't the deal when they purchased their property that their towns would become what they have become in 2018. They were buying into and living the middle class lifestyle. High property values do them no good if they want to die in their lifetime homes.

They are defending their properties through prop 13, so they can keep them.

And when they pass their kids will sell the house for some insane amount, get their stepped up basis and make a killing tax free.

New owner starts with fresh assessment and taxes. They can afford it. They just had to wait their turn.
Well lots of people buy things for many reasons that don't work out. There is no "deal" about what will happen to your town in 30 years when you buy a property.

As to defending their properties through Prop 13, all I can say is that mispricing always gets corrected.

Potential new buyers increasingly cannot afford housing in California, and are leaving the state. That blithe claim really betrays your lack of consideration on this topic, and your lack of sympathy for others. "I got mine" is a byword for admitting you have no principles to stand on and are just rationalizing your self-interest.
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