Prop 13 (megatopic) (Brea, Malibu: credit card, tax rates, beach)

[expatCA]

Originally Posted by bad debt

Agreed. Especially in areas of real estate, construction, public works, and politics. Not saying it will always be that way, but it certainly might.

Always has been.

[Dave Coe]

A lot of people on the left will say property taxes are underfunded but in reality they are much higher than other states. The overall issue is disparities, with prop 13 mostly benefiting wealthy retirees and non residential usage such as Country Clubs while placing the burden on middle class and upper middle class families, the group that's being squeezed out of the State.

[expatCA]

Originally Posted by Dave Coe

A lot of people on the left will say property taxes are underfunded but in reality they are much higher than other states. The overall issue is disparities, with prop 13 mostly benefiting wealthy retirees and non residential usage such as Country Clubs while placing the burden on middle class and upper middle class families, the group that's being squeezed out of the State.

Prop 13 benefits everyone who buys a home.

[lvmensch]

Originally Posted by expatCA

Prop 13 benefits everyone who buys a home.

Those who bought a house a long time ago much more than a new buyer. Also very nice for those who can pass it on without the need to sell and commercial owners.

So actually everyone makes out better than the new buyer.

[CA4Now]

Originally Posted by lvmensch

So actually everyone makes out better than the new buyer.

Hate to think what the new buyer would be paying without Prop 13...

[lvmensch]

Originally Posted by CA4Now

Hate to think what the new buyer would be paying without Prop 13...

Pretty much the same or less as they are now. The mechanism that causes the problems is the very low rate of recovery to parity...no savings for the new buyer. No cost either.

And if the tax was rationally apportioned to reach the same yield to the government the new buyer would more than cut his taxes in half.

[expatCA]

Originally Posted by lvmensch

Those who bought a house a long time ago much more than a new buyer. Also very nice for those who can pass it on without the need to sell and commercial owners.

So actually everyone makes out better than the new buyer.

The new buyer benefits just as the old ones, as time passes. Just like it takes time to build equity. No prop 13 and taxes would go up and up every year till it drove people out of their homes as it did before prop 13 was enacted. Wanting to get rid of it for homes is stupid as the actual cost of owning a home would go up faster each year. It would not drop home prices, just price out buyers who can barely afford one now and without Prop 13 could not afford one then.

[lvmensch]

Originally Posted by expatCA

The new buyer benefits just as the old ones, as time passes. Just like it takes time to build equity. No prop 13 and taxes would go up and up every year till it drove people out of their homes as it did before prop 13 was enacted. Wanting to get rid of it for homes is stupid as the actual cost of owning a home would go up faster each year. It would not drop home prices, just price out buyers who can barely afford one now and without Prop 13 could not afford one then.

Nope. Simply untrue. Ten years down the line the new buyer is still well behind the old buyer. Our SIL bought her place in the 70s. It is now worth a couple of million. But she will eventually pass it on to her children one of whom already lives there. She pays taxes at about 15% of what new neighbors do. And with a little inflation will never get any higher.

The NV system works a lot better. At least all homes not owner occupied have their taxes go up 8% per year which says they will all eventually end up at parity. And NV allows the present tax basis to move to the new owner. So if you buy a place to live your taxes will not go up more than 3% from what the last owner paid. CA of course whacks the new owner with a reset to parity.

I am one of those who originally voted for Prop 13. I think it a good idea that simply needs some tuning. And CA would do well to follow the NV lead.

[expatCA]

Originally Posted by lvmensch

Nope. Simply untrue. Ten years down the line the new buyer is still well behind the old buyer. Our SIL bought her place in the 70s. It is now worth a couple of million. But she will eventually pass it on to her children one of whom already lives there. She pays taxes at about 15% of what new neighbors do. And with a little inflation will never get any higher.

The NV system works a lot better. At least all homes not owner occupied have their taxes go up 8% per year which says they will all eventually end up at parity. And NV allows the present tax basis to move to the new owner. So if you buy a place to live your taxes will not go up more than 3% from what the last owner paid. CA of course whacks the new owner with a reset to parity.

I am one of those who originally voted for Prop 13. I think it a good idea that simply needs some tuning. And CA would do well to follow the NV lead.

The only thing that needs to be changed is on businesses. When the business or stock is sold the tax rate moves up to the value of the building(s). The Prop 13 benefits are to keep homeowners in their home. They lived in it a long time they have paid a LOT of taxes and yes gained equity. The new buyer will as well.



Now non owner occupied is also fine to have the taxes go up. Owner occupied are a different subject.



Mind you the rents will go up if the taxes went up, so no real benefit to anyone but the city/county. Not to a homeowner and not to a renter, Just the Government.



Now the highlighted line would never happen in CA. They want all the money they can get from the people. NV benefits a great deal from Vegas.

[CA4Now]

Originally Posted by lvmensch

Pretty much the same or less as they are now.

Not true. Before Prop 13 was enacted, homeowners paid as much as 4% of the home's value in property taxes (average around 3%) with reassessments that could be made frequently, not just when the property was sold.