El Dorado County property tax base transfer (San Jose, San Francisco: renting, house)

[SFBayBoomer]

El Dorado County property tax base transfer? This is also referred to as Proposition 90 and is from one county to another.

NinaN is likely to know the answer to this. Is the ability to transfer one's property tax base going to continue into 2017?

(As far as I know, it is scheduled to sunset on October 1, 2016, unless the El Dorado County Board of Supervisors takes further action.)

[justducky2]

Who knows? We have a couple of BOS seats up for bid this year; it will depend on the makeup of the BOS.

If it leans developer-friendly heavy, as it did when the property tax base transfer was initiated, and as it does now, they will likely bless it continuing. However, the community is getting pretty riled up about how the developers are getting whatever they want.

So - it depends, lol.

[Elliott_CA]

Things have changed. Bay Area and L.A. markets sit at incredible heights. Your average San Jose tract house might be worth $900k and if the owner lived there long enough might only have a Prop 13 basis of $200k. Now that person buys a house for $899k in El Dorado and only pays property tax on the first $200k? That's a LOT of revenue left on the table, not to mention a fairness issue with local residents.

[NinaN]

It's a coin toss. By this time last year they had already met and extended. I'm inclined to think they won't extend, but there is a lot of pressure to extend so maybe they will.

[SFBayBoomer]

Originally Posted by Elliott_CA

Things have changed. Bay Area and L.A. markets sit at incredible heights. Your average San Jose tract house might be worth $900k and if the owner lived there long enough might only have a Prop 13 basis of $200k. Now that person buys a house for $899k in El Dorado and only pays property tax on the first $200k? That's a LOT of revenue left on the table, not to mention a fairness issue with local residents.

1. As to fairness, El Dorado County residents, Sacramento County residents, Marin County residents, Contra Costa County residents, San Francisco County residents, etc. (all counties in California) can already transfer their property tax basis to any of nine other counties which allow Proposition 90, like my county. That's what I don't think is fair. I am opposed to people being able to transfer their property tax basis into my county unless I can also transfer my tax basis to their county. Some people want to downsize (many retirees) and some want to upsize (me).

2. I think you are overestimating the average tract house price in the SF Bay Area. The value is more likely $700-$750k, like mine. Other homes in other areas may be more expensive.

3. The ONLY reason I started looking into El Dorado County property (and it is the same for others I know) is because of the ability to transfer my tax basis and buy a somewhat "nicer" home than what I own now, when factoring in the tax advantages.

4. Keep in mind that with a Proposition 90 transfer, the only property I can buy is one in my current price range, even though I would rather buy a more deluxe property. If I sell here before buying in El Dorado County, I can't buy a property that is even $1 higher in value. If I sell here and buy there a year and a day later, then I can go up 5%, two years and a day and 10% higher. That's it. So I can't sell here first, since I want to buy as much house as I can. I can't risk that the El Dorado County property is even $1 higher.

I would prefer to stay in Northern California; however, San Mateo County and Santa Clara County are more expensive than I wish to pay for a replacement dwelling, and the parts of Alameda County that I like are vastly more expensive, so that's out. I don't want to downsize or move into a less desirable area.

5. I would probably prefer a resale home to a new development. This benefits ordinary home sellers in El Dorado County who can sell to a Bay Area buyer, likely getting an easy, all cash buyer.


I don't see a downside to El Dorado County residents to extend the tax basis transfer. I'll bet your home values have increased since Proposition 90 has been extended to El Dorado County. The people who move up there from the Bay Area are also likely not to need new schools (retirees mostly), but will be adding to your county coffers, nevertheless. And some of us will be opening new businesses, and that won't hurt, either.

[SFBayBoomer]

Originally Posted by NinaN

It's a coin toss. By this time last year they had already met and extended. I'm inclined to think they won't extend, but there is a lot of pressure to extend so maybe they will.

Thank you, Nina. I hope they will extend, for the reasons I have listed, above.

[SFBayBoomer]

Originally Posted by justducky2

Who knows? We have a couple of BOS seats up for bid this year; it will depend on the makeup of the BOS.

If it leans developer-friendly heavy, as it did when the property tax base transfer was initiated, and as it does now, they will likely bless it continuing. However, the community is getting pretty riled up about how the developers are getting whatever they want.

So - it depends, lol.

Thank you. I am not generally a fan of current-day developers, myself.

[justducky2]

Fairness to local residents - a huge issue.

I'm a government worker, I don't make a lot of money. I own a very, very modest home. Someone sells their Bay Area home for big bucks and moves to EDC, but gets to keep their Prop 13 status. That means that I and other working county residents are paying to subsidize police, fire, roads, all the costs for these incoming people...since I'm younger and only bought 15 years ago, at a higher price. Someone who bought back in the 1980s or 1990s and has a low base, they make out.

Not fair.

[Brother1]

Originally Posted by justducky2

Fairness to local residents - a huge issue.

I'm a government worker, I don't make a lot of money. I own a very, very modest home. Someone sells their Bay Area home for big bucks and moves to EDC, but gets to keep their Prop 13 status. That means that I and other working county residents are paying to subsidize police, fire, roads, all the costs for these incoming people...since I'm younger and only bought 15 years ago, at a higher price. Someone who bought back in the 1980s or 1990s and has a low base, they make out.

Not fair.

It is fair those retires don't make your income and they don't have any kids. They already paid into the system.

[justducky2]

Originally Posted by SFBayBoomer

1.

5. I would probably prefer a resale home to a new development. This benefits ordinary home sellers in El Dorado County who can sell to a Bay Area buyer, likely getting an easy, all cash buyer.


I don't see a downside to El Dorado County residents to extend the tax basis transfer. I'll bet your home values have increased since Proposition 90 has been extended to El Dorado County. The people who move up there from the Bay Area are also likely not to need new schools (retirees mostly), but will be adding to your county coffers, nevertheless. And some of us will be opening new businesses, and that won't hurt, either.

Let me tell you about the downside.

Bay Area buyers are coming in and spiking up the prices, and buying properties. "Ordinary" home sellers in EDC can't find properties to buy.

One of my neighbors sold their modest, small home within days of listing. They want a larger property, to do small scale farming and 4H with the kids. They can't find ANYTHING. They are luckily renting back until they find something, but even so, how long will the new buyers wait?? Prices are getting ridiculous again, like they were going up before the bubble.

Also, most of us don't care if you are a Bay Area cash buyer - really. Actually, around here, if you come around saying that, and there are multiple offers, you will not likely be the chosen one. Who cares, when all is said and done, and escrow is closed, the money transfers to our bank. I don't, nor do my neighbors, but saying that you are a "Bay Area Cash Buyer", lol, is not going to help you with brownie points.

My kid likely won't be able to afford to live in El Dorado County. That's sad, it's where she has grown up. Housing prices are being driven up by multiple bids over asking prices. Inventory is low. I've been looking at properties, too, so I can get a modest house and enough land to put a granny flat or a manufactured home on it for her. Out of my budget.

Remember, retirees cost us working folks to subsidize you for fire, ambulance, police, roads. We won't be able to shop at your new businesses, because we can't afford it. So don't think that because schools won't be built that you are helping our economy. Actually, the very small one and two school districts in our rural and more developed areas are really struggling because of retirees coming in, as their enrollments plummet. As enrollments continue to plummet, then they have to consider closing schools or consolidating with other districts, losing local control, jobs, and taking on debt burdens from other districts.

This is not just what I'm saying....this is what many people in EDC feel about "Bay Area" buyers....you have no idea how you are impacting our economy...yet you assume you are coming in to save us. Have you heard the term "flatlander?" Yeah. NOT a term of endearment here.

Am I being rude? Maybe. I'm telling it straight, and truly, this is what a lot of people feel about it. Don't assume that it's a great deal for current residents. It's not. I'm not a NIMBY. Growth will happen, people will move in, and that's fine. BUT don't treat the current residents like it's all roses for you to come in at a lower tax rate, all cash Bay Area buyer, no schools needed, opening a business, and you are saving the day for them. You aren't saving the day. You are a burden on our infrastructure that you didn't pay for, that we are paying a higher rate for. You can come, but just a warning, you MIGHT want to keep a lower profile....