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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?
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.
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?
Actually the property taxes might be reduced under the new law that allows seniors to bring their tax bases to any county that you want. Or they could also be sales to children that can also keep their parents tax base.
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 mean Prop 13 expires for the house that is sold to a non-family member. So my parents bought a home back in 1968 for 30K. Prop 13 kept their taxes at roughly $900 all these years. My last parent passed away a few months ago and I inherited the house. I sold the house for about a million dollars. The new owners will pay roughly $10,000 in property taxes now, not the $900 I was paying. Each year represents $9,000 more dollars being taken in by the California govt. Multiply that by all the houses that lose Prop 13 protection and does that amount to a substantial amount, maybe several billion dollars?
I mean Prop 13 expires for the house that is sold to a non-family member. So my parents bought a home back in 1968 for 30K. Prop 13 kept their taxes at roughly $900 all these years. My last parent passed away a few months ago and I inherited the house. I sold the house for about a million dollars. The new owners will pay roughly $10,000 in property taxes now, not the $900 I was paying. Each year represents $9,000 more dollars being taken in by the California govt. Multiply that by all the houses that lose Prop 13 protection and does that amount to a substantial amount, maybe several billion dollars?
Nobody loses Prop 13 protections. They just start at a different value. In twenty years they will be paying a lot less on a $4,000,000 house.
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?
What do you mean “were under Prop 13”. Prop 13 isn’t something that’s expired. The properties purchased today ARE COVERED UNDER PROP 13 PROTECTION. A property purchased today has the exact same protection for tax protection as a house purchased 30 years ago.
There is a huge assumption or maybe up education that Prop 13 only covers certain properties that were purchased long ago. Which is absolutely not true.
The ONLY difference between a property purchased in 1980 and one purchased in 2020 is the property purchased in 2020 tax rate is based on that purchase price. The 1980 property was based on the purchase price back then and it went up incrementally over the years. If that property was sold within that time the property tax will be reassessed at the new sale/purchase price.
Technically a person buying a house in 2010 would have a same as or lower property tax base than a house bought in 1995. Even though the 1995 home was initially purchased at a lower price. Because the 1995 purchase would have a incremental increase over the years.
What do you mean “were under Prop 13”. Prop 13 isn’t something that’s expired. The properties purchased today ARE COVERED UNDER PROP 13 PROTECTION. A property purchased today has the exact same protection for tax protection as a house purchased 30 years ago.
There is a huge assumption or maybe up education that Prop 13 only covers certain properties that were purchased long ago. Which is absolutely not true.
The ONLY difference between a property purchased in 1980 and one purchased in 2020 is the property purchased in 2020 tax rate is based on that purchase price. The 1980 property was based on the purchase price back then and it went up incrementally over the years. If that property was sold within that time the property tax will be reassessed at the new sale/purchase price.
Technically a person buying a house in 2010 would have a same as or lower property tax base than a house bought in 1995. Even though the 1995 home was initially purchased at a lower price. Because the 1995 purchase would have a incremental increase over the years.
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 no, I wasn't living in the house. i already had my own home. I didn't want to rent it out. I just wanted to get the money and bank it. I didn't have to pay capital gain on this so it was a windfall for me.
I mean Prop 13 expires for the house that is sold to a non-family member. So my parents bought a home back in 1968 for 30K. Prop 13 kept their taxes at roughly $900 all these years. My last parent passed away a few months ago and I inherited the house. I sold the house for about a million dollars. The new owners will pay roughly $10,000 in property taxes now, not the $900 I was paying. Each year represents $9,000 more dollars being taken in by the California govt. Multiply that by all the houses that lose Prop 13 protection and does that amount to a substantial amount, maybe several billion dollars?
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.
**$950 is what my parents paid. I bought the house from them in 1996 and was able to keep the same property tax rate.
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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?
