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Old 01-13-2021, 12:30 PM
 
10,513 posts, read 5,144,050 times
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Quote:
Originally Posted by NoNansea View Post
There is a lot of turnover of residential houses in California.
Actually, no. The available inventory of homes for sale is low, which is one reason prices are so high (and low mortgage rates). 40,700 new and resale home transactions closed escrow in California during November 2020. That number, around 30k to 45k transactions per month, has been flat for several years.

So, in answer to your question, local government is getting some revenue boost from Prop 13 turnover resets, but the low sales volumes keep the revenue numbers modest.
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Old 01-13-2021, 12:32 PM
 
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Quote:
Originally Posted by thrillobyte View Post
California: Lots of houses in my area are being sold for million+ dollars. Most were under Prop 13 which of course expires when the house changes title. Are these sales all over the state a considerable source of revenue for California or do they represent just a small fraction?
No. BIG source of revenue. They love it when you sell and reset the assessment.

Let's take, for example, a house that was purchased in 1980 for $400k. Now it's probably worth $1.5million. So they over triple the tax revenue on this house.
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Old 01-13-2021, 12:33 PM
 
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Quote:
Originally Posted by NoNansea View Post
Prop. 13 doesn’t actually expire. The amount of tax dollars a new owner will pay is different from what the previous owner paid because the house has increased in price. You pay 1% of sales price when you purchase the house which can & usually does increase by 2% per year. A house that sold for $600,000 in 1995 has a tax debt of somewhere around $10,000+ and will increase slightly every year. If that same house sold today for $1.8 m, the new owner would pay $18,800 in property tax the first year.

There is a lot of turnover of residential houses in California. And there has been a great deal of new housing built since 1978 when Prop. 13 became law. The state is not hurting from Prop. 13. They do very well by it in spite of what state politicians claim.
I was going to say this but I figured it was just a misstatement. But you explained it correctly. (I used to work for the LA County Assessor so I am very familiar with Prop 13).
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Old 01-13-2021, 12:38 PM
 
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Quote:
Originally Posted by thrillobyte View Post
Okay, my wording was bad. Point taken from several members. I explained what I really meant in post no 4. No person loses Prop 13. The seller is done with the property. The buyer has a new price to pay tax on. The house is no longer under Prop 13 protection. Is that better? Now onto the question: what sort of revenue is the reevaluation of all these houses that were formerly protected under Prop 13 generating for the state, substantial or trivial?
It's hard to know. I guess one would look at the budget to determine it. As time passes and more people with those old bases die off, the impact is smaller I would say. You would also have to examine the average holding period for homes in California.

The political climate will have an impact as well. I think the policies of California are created a wealth class and a poor class and the middle has been largely driven out. So that's another factor to consider. Wealthy people seem to change homes more frequently. Poor people don't usually own the homes in the first place.

And one more factor is whether home prices are rising or falling. When I first appraised for LA County, I am not kidding when I say homes were appreciating at 10% /PER MONTH. Then it all crashed. Of course the entire country crashed in 2008 but California was one of the few places that seemed to have regular peaks and big crashes.

I had to go out an and appraise some homes just when the 1991 crash to see if their homes had dropped in value. They were in the process of getting loans and often couldn't close because of it. (That was after I left LA County to become a fee appraiser).
I think this would be an interesting analysis though and it's an interesting question.
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Old 01-13-2021, 12:43 PM
 
21,832 posts, read 9,392,417 times
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Quote:
Originally Posted by john3232 View Post
I was paying $950 in property tax for my San Francisco **home. Sold it in 2019 for 1.7 million. New owners will pay a bit over 20 grand a year.

Anyone who bought their home 20 years is still looking good. My brother bought a home in Southern Cal. for $440 grand in 2000. Today it's worth 2.1 million.

There is a huge untapped tax revenue should Prop. 13 be abolished but that will be difficult to do.

Expect the anti-Prop 13 lobby to whittle away at Prop 13 instead of trying to outright end it. Proposition 19 is just the start:
https://www.natlawreview.com/article...0to%20children.


**$950 is what my parents paid. I bought the house from them in 1996 and was able to keep the same property tax rate.
I have mixed feelings about it being abolished. I get the arguments against it but I hate the idea of old people not being able to keep their homes because of skyrocketing property taxes. I live in Illinois and retired people are leaving the state because of it. It's sad to see.
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Old 01-13-2021, 01:45 PM
 
18,228 posts, read 16,845,451 times
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Quote:
Originally Posted by Grlzrl View Post
It's hard to know. I guess one would look at the budget to determine it. As time passes and more people with those old bases die off, the impact is smaller I would say. You would also have to examine the average holding period for homes in California.

The political climate will have an impact as well. I think the policies of California are created a wealth class and a poor class and the middle has been largely driven out. So that's another factor to consider. Wealthy people seem to change homes more frequently. Poor people don't usually own the homes in the first place.

And one more factor is whether home prices are rising or falling. When I first appraised for LA County, I am not kidding when I say homes were appreciating at 10% /PER MONTH. Then it all crashed. Of course the entire country crashed in 2008 but California was one of the few places that seemed to have regular peaks and big crashes.

I had to go out an and appraise some homes just when the 1991 crash to see if their homes had dropped in value. They were in the process of getting loans and often couldn't close because of it. (That was after I left LA County to become a fee appraiser).
I think this would be an interesting analysis though and it's an interesting question.

Thank you. Very interesting. Very informative.
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Old 01-13-2021, 07:12 PM
 
Location: USA
8,989 posts, read 6,028,481 times
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Similar situation in Florida under Homestead and SOH. Long time owners of properties are paying very little in property taxes compared to market rates. Big shock for unprepared new buyers, particularly from out of state who generally are unfamiliar with the tax increase caps in Florida. This is one reason to have a good real estate agent.
Florida's basic business model is to soak the tourists and new residents.

The Florida Constitution was amended effective January 1, 1995, to limit annual increases in assessed value of property with Homestead Exemption to three percent or the change in the Consumer Price Index, whichever is lower . No assessment, though, shall exceed current fair market value. This limitation applies only to property value, not property taxes.

A change in property ownership will effectively "reset" the Capped Value to full market value. It is important to know that property taxes will increase the next year as the assessed value must be adjusted to equal the current market value.


https://www.pcpao.org/
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Old 01-13-2021, 07:40 PM
 
15,633 posts, read 26,186,341 times
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Quote:
Originally Posted by thrillobyte View Post
Okay, my wording was bad. Point taken from several members. I explained what I really meant in post no 4. No person loses Prop 13. The seller is done with the property. The buyer has a new price to pay tax on. The house is no longer under Prop 13 protection. Is that better? Now onto the question: what sort of revenue is the reevaluation of all these houses that were formerly protected under Prop 13 generating for the state, substantial or trivial?
No, it’s still under proposition 13.

What proposition 13 says is that you tax rate is 1% if what you paid for the house, and your taxes can’t go up more than I think it’s 2% a year. So yes, housing turnover will help raise tax revenue. But, if nobody moves out of those houses that they purchase, it’s still not sustainable. Because under 13, the new property tax rate will be 1% of what it sold for. And proposition 13 is that regulation that says it can only be one percent of its value, and can only go up 2% a year. That’s why we have so many parcel taxes in order to raise revenue. My personal taxes are actually way more than my property taxes at this point.

And if you go to Pennsylvania, a $200,000 house there I’ll be paying around I think I figured it out 6000 to $8000 in taxes a year. If I could buy $200,000 house here, I’d be paying $2000 a year in property tax. Not including parcel taxes.

In short, it does change the taxes paid because the base rate has changed, it’s going up. But thanks to Prop13, it only does that when you change ownership. In other states, they often reappraise the properties and charge you on that reappraisal. So you can live in a house for 25 years and the first year that you bought it it was $10,000 and by the time you go to sell it in 25 years it’s worth 150,000, and you’ve paid the appropriate level of taxes for the whole time because your state re-appraises is every few years and raises your tax bill.
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Old 01-13-2021, 09:05 PM
 
Location: Riverside Ca
22,146 posts, read 33,387,997 times
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Quote:
Originally Posted by thrillobyte View Post
Okay, my wording was bad. Point taken from several members. I explained what I really meant in post no 4. No person loses Prop 13. The seller is done with the property. The buyer has a new price to pay tax on. The house is no longer under Prop 13 protection. Is that better? Now onto the question: what sort of revenue is the reevaluation of all these houses that were formerly protected under Prop 13 generating for the state, substantial or trivial?
You can roll your eyes till you’re blue in the face you’re still wrong.

Ok..

ANY HOUSE BOUGHT TODAY DOES NOT LOSE PROP 13 PROTECTION. IT DOESNT MATTER IF IT GETS SOLD ONCE A MONTH EVERY MONTH.

THE PROPERTY TAX AMOUNT IS BASED ON THE PURCHASE/SALE PRICE WHEN ITS SOLD. ONCE SOLD THE HOUSE HAS A INCREMENTAL YEARLY RAISE. NOW...WHEN THE HOUSE IS THEN SOLD OR TITLE TRANSFERS HANDS (with some exceptions) THE HOUSE IS REASSESSED AND THE PROPERTY TAX AMOUNT CHANGES DEPENDING ON THE SALE PRICE. .Now there are bonds and mello russe that may be in effect as additional taxes but we’re strictly speaking property tax.

THE TAX CAN BE HIGHER OR LOWER. IF YOU BOUGHT A HOUSE IN 2009-2012 YOUR PROPERTY TAX WOULD IN SOME CASES BE LESS THAN FOR EXAMPLE THE HOUSE I PURCHASED IN 1995. EVEN THOUGH I BOUGHT AT A “LOWER” PRICE ALL THOSE YEARS OF TAX INCREASE ADDS UP.


Most housing does go up in value thus usually the taxable amount goes up. But if you buy in a crash you not only get a good deal you also have a lower property tax and the protection that prop 13 offers. Still...to this day...protected....by Prop 13. And when yo sell it the new buyer is also protected by the same Prop 13 you were protected. It doesn’t stop. You can also transfer it to yiur kids and they are protected.


There is no formally protected houses under Prop 13.

Way too many people do not understand how Prop 13 works. A lot of people believe or are misguided into believing only certain people get Prop 13 protection. Those are the IM PAYING MORE TAXES THAN MY NEIGHBOR HES NOT PAYING HIS FAIR SHARE posts you see here and there.

Last edited by Electrician4you; 01-13-2021 at 09:15 PM..
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Old 01-13-2021, 09:34 PM
DKM
 
Location: California
6,767 posts, read 3,822,831 times
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I knew what you meant and the answer is yes. I don't know why people get so worked up over technicalities. CA is looking at a budget surplus even in 2020! (despite earlier predictions of doom and gloom) They really ought to lower income taxes a bit, but yeah, good luck with that!
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