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You know, getting rid of Prop 13, or even some of the Loop Holes associated with it, would probably overall bring down Property taxes.
I was just talking to my neighbor the other about property taxes, he bought his place a year after mine.
We started taking about the Hypocrisy of Our Trump Supporting Neighbor. He's always screaming Socialism, but does not understand that, inheriting a house from your Parents and only paying 1100 a year in Property taxes, while me and other Neighbors pay close to 5k in Property taxes is form of Socialism. We were going to draw straws to see which one of us would tell him this, but both agree to have the newer Hispanic Couple that just bought their house tell him
Our Trump neighbor has made some rude comments about their Biden Flag in their front yard, so we thought they would be perfect to bust his bubble on his Socialism rants.
Sorry about the long story, boring day in the office. I totally agree that, Property taxes in California and the way the government uses the Money suck.
Eliminating Prop 13 would not cause taxes to drop. They would go up an up and ... well just as they did before Prop 13 was passed by ... the people. Anyone who thinks any City or County Gov't would lower taxes, lives in a dream world.
Oh maybe you can pay the older home owner back for the roads and schools, etc he paid for that you are using.
I'm against taxing older People out of there homes, thats just nuts, but i am against is the loophole of, giving your kids or Heirs a 1m dollar home and them paying 1978 Property taxes on that, Thats BS.
I'm also Against big businesses getting around this loophole also, biggest offenders IMO.
Yes the La Times writes liberal hack pieces, but i think they got this Article right!
I would love to find out the exact number of people benefiting from this because where i live, its closer to 50% of the neighborhood benefiting from it in some form or another.
Here's my Point, either it's Socialism for all, or Socialism for no one Ages 1-99. We can't have it both ways or choose when and where it applies.
No idea. I've personally never met anyone who has done this.
But I agree with you on this.
So fix the loophole. But removing Prop 13 would be disastrous for the CA RE market. Millions of homeowners would see their equity in their homes vanish overnight.
Of course, people who don't yet own homes here, and would like to, but are priced out of the market would love this. But then they would complain about the taxes as soon as they became homeowners.
I'm against taxing older People out of there homes, thats just nuts, but i am against is the loophole of, giving your kids or Heirs a 1m dollar home and them paying 1978 Property taxes on that, Thats BS.
I'm also Against big businesses getting around this loophole also, biggest offenders IMO.
Yes the La Times writes liberal hack pieces, but i think they got this Article right!
I would love to find out the exact number of people benefiting from this because where i live, its closer to 50% of the neighborhood benefiting from it in some form or another.
Here's my Point, either it's Socialism for all, or Socialism for no one Ages 1-99. We can't have it both ways or choose when and where it applies.
In my humble opinion the State already gets more than their fare share of taxes and properties. Every time someone dies with no will, or is contested by relatives etc. the State rapes that family. Pretty much steals the property or money to sort it out. A lot of older folks have no relatives left so the State conducts escheat. This is why you have to have a will or trust even if you have no children or brothers and sisters. Look up Intestate Succession. In many cases the State will get it regardless. Plan accordingly.
Yeah, I used to think it would be good to ditch prop 13, screw those old rich people that pay almost nothing in taxes. I thought it would help renew older neighborhoods without many kids around like Point Loma, which seemed to be mostly older folks and rentals as it makes no sense to sell a paid off house that you are collecting $4-5K a month for and paying a few hundred dollars a year in taxes. I didn't like the dynamics of the neighborhoods like that with tons of rentals, few kids so bussing is needed to fill up the schools and you end up having poor local schools for multimillion dollar neighborhoods, and actually still do blame prop 13 for that.
Now that I'm a homeowner and midway to being an old rich person, I see it differently of course. I do wish there was a good way to address the above aspect of it, but I now realize that all that additional tax money would just be squandered by the state, and they'd inevitably come back for seconds, thirds, etc. So while not being a perfect solution, it's better than the alternative.
The unusual part of all this is Big Business warned us this would Happen(See Bolded)
Quote:
Here is the story of how some of the state’s wealthiest businesses received a multibillion-dollar windfall that they never wanted.
The great California tax revolt of the late 1970s began with a housing market gone crazy. Prices in some markets were jumping by as much as 5% per month. The result was a money machine for local governments, raising both local property tax assessments and people’s tax bills.
Typical homeowners were hit with tax hikes of as much as $1,000 dollars per year – four times that in today’s dollars. For the elderly living on fixed incomes, these increases threatened to toss them out of their homes altogether.
By mid-1976 local officials across the state faced a full-on rebellion, and they moved swiftly to shift the blame to Sacramento. The state was sitting on a money machine of its own – double digit inflation. The cost-of-living salary increases that workers received to help keep up with rising prices also shoved them into higher and higher tax brackets. By early 1977 the state was sitting on a $2.5 billion budget surplus, which would eventually balloon to more than $7 billion, equal to half the state budget.
At the state Capitol, the summer of 1977 became one long drama of anti-tax protests, and lawmakers trying and failing to respond. I had a front row seat to it all, as a college intern in the office of Assembly Speaker Leo T. McCarthy. Democratic liberals wanted aid to go to low-income homeowners and renters. Democratic moderates, led by the young version of Gov. Jerry Brown, wanted to target middle and high-income homeowners. Republicans wanted to give the surplus away as an income tax cut, which would ultimately benefit the wealthiest.
Politicians in Sacramento that scorching summer could only find agreement on two things. One was that they liked a new movie called “Star Wars” – the governor, a huge fan, rented out a theater and hosted a showing for the entire Legislature. The second was that none of the tax relief should go to corporations.
As efforts to find a compromise crashed and burned, two curmudgeonly anti-tax activists, Howard Jarvis and Paul Gann, announced a sweeping initiative that would cut local property taxes by $6 billion, a sixth of all state and local revenues combined. It would put a 1% cap on local property tax rates and roll back property assessments to what they had been in 1975. But the measure made no distinction between homes and commercial property, and as a result would dole out a full two-thirds of its tax relief to some of the wealthiest economic interests in the state.
It seemed to be more the result of sloppy drafting than actual intent.
In December 1977, Jarvis and Gann turned in 1.2 million signatures, more than double the 500,000 they needed to qualify for the ballot. The initiative became Proposition 13. The opponents that lined up against Prop. 13 included not only every major Democratic leader in the state, but two future Republican governors – Pete Wilson and George Deukmejian – the pro-business California Taxpayers Association, Bank of America, Atlantic Richfield, Southern California Edison, Southern Pacific Railroad and Standard Oil of California.
The corporations warned that the initiative would damage public schools and services, and gave serious cash to the campaign to defeat it. A Southern California Edison executive declared, “Although business stands to receive at least $4 billion of the anticipated $6 billion in property tax relief, we felt it was time for the private sector to stand up for principle and fight this measure as financially unsound.”
Nonetheless, in June 1978, on the winds of public anger, Prop. 13 passed by a landslide, 2-to-1. Overnight it slashed the property tax revenues under schools and local governments by more than half. State lawmakers deployed the state surplus to fund a partial bailout, but severe cuts came nonetheless.
In Closing In the years since, the loophole for commercial property has only grown. Homes in California do get sold and eventually reassessed to their current value. But for giant business properties, as long as the same corporation holds title, as long as the logo on the door remains the same, the building continues to be taxed based on what it was worth during the last year of the Vietnam War.
Today the California Legislative Analyst’s Office estimates that the commercial property loophole costs California between $8 billion and $12 billion per year in lost revenue.
Four decades ago, California’s corporate leaders opposed the windfall given them by Prop. 13. In November they will spend millions to protect it. What California really has are two Prop. 13s, the one that provides predictability to homeowners and the one that gives a tax break worth billions a year to some of the wealthiest businesses in the world.
In November, voters will have a chance to finally put that loophole to rest, along with eight track tapes, pet rocks, the flash cube and other relics of the 1970s that we don’t need in 2020.
I'm against taxing older People out of there homes, thats just nuts, but i am against is the loophole of, giving your kids or Heirs a 1m dollar home and them paying 1978 Property taxes on that, Thats BS.
I would love to find out the exact number of people benefiting from this because where i live, its closer to 50% of the neighborhood benefiting from it in some form or another.
Prop 19 just eliminated in my opinion the worst parts of the loophole.
I don't know that statistics are calculated specifically to show who benefited from property tax rate transfers when new deeds are processed. But sites like Zillow usually show property taxes billed, and if the property tax is $500/yr or so, you can safely assume either the original owners still live there, or their heirs are benefiting!
Prop 19 just eliminated in my opinion the worst parts of the loophole.
I don't know that statistics are calculated specifically to show who benefited from property tax rate transfers when new deeds are processed. But sites like Zillow usually show property taxes billed, and if the property tax is $500/yr or so, you can safely assume either the original owners still live there, or their heirs are benefiting!
Good Points about Prop 19, but it still doesn't go after the people that are or have already benefited from it.
Good time to be a Estate Planner
Quote:
Prop 19 limits the availability of the parent-child exclusion for purposes of real estate tax assessments. This aspect of Prop 19 takes effect on February 16, 2021.
Under current law, when a parent transfers ownership of his or her principal residence to a child, the property's value for tax assessment purposes is not reassessed, regardless of how the child uses the residence. In California, transferring a parent's home to one or more children is permissible under current law without triggering reassessment, and the child or children could use it as a vacation home or a rental property.
Prop 19 changes this by requiring that the child or children use the residence as their own principal residence or it will be reassessed. Furthermore, even if the child uses the residence as his or her own, there is a cap of $1,000,000 on the exclusion, as explained below. Technically, the new and old rules apply where a child transfers the residence to a parent, but this is much less common.
This change to the parent-child exclusion may also affect many common estate planning trusts that were established several years (or even decades) ago. For example, a qualified personal residence trust (QPRT) allows the transfer of a residence to a trust while that residence can still be occupied for a fixed number of years. The parent(s) continue to live in the residence as their primary residence, and at the end of the fixed number of years, the residence transfers to someone else (typically their children or a trust for their benefit). Most parents who establish QPRTs want to continue living in the house after the fixed term ends. They may do so, but they need to pay rent to the trust or to their children, depending on who owns the residence at the end of the fixed term. Under existing law, when the children become the owners they would qualify for the parent-child exclusion. But once Prop 19 takes effect, the children would need to use the residence as their primary residence or trigger reassessment. They could not rent it back to the parent, and if siblings are entitled to the residence at the end of the fixed term, they would need to move in together and share a household to qualify for the exemption – which perhaps is not ideal for most adult children. If parents have QPRTs whose fixed term ends on or after February 16, 2021, the value of their home may be reassessed to its current value. This could lead to a massive property tax increase, though it may be possible to mitigate this. Those with an established trust that holds a residence and names their children as remainder beneficiaries, or those planning a transfer of a home to their children outright or in trust, should contact their tax and wealth planning attorney at Venable before the effective date of this new law. It is critical that we review your estate planning documents and recommend any necessary changes.
If your home has increased in value significantly from its taxable value, Prop 19 adds certain limitations that could result in an increased assessment. This new rule will apply to outright transfers and to transfers in trusts, such as the QPRT transfer illustrated above. If the increase in value is less than or equal to $1,000,000, no adjustment is made. If the increase in value is more than $1,000,000, the increase in value after the first $1,000,000 is added to the tax assessed value. For example, assume a parent's home has a taxable value of $3,000,000. Because the parent purchased the home many years ago, its value is now $5,000,000. In other words, it has increased by $2,000,000. The new reassessed value if the parent gifts the home to her child will be $4,000,000. There are inflation adjustments that apply to the $1,000,000 increase limitation for subsequent years. Changes to the Transfer of Taxable Value for Certain Property Owners
The other relevant change in Prop 19 is generally beneficial to homeowners. Prop 19 expands the class of people who qualify for a transfer of their taxable value from their current home to a new property.
Under existing law, only homeowners over 55 years of age or certain disabled persons could make use of this benefit. And they could do so only if (1) their new home is in the same county as their old home; and (2) the value of their new home is less than or equal to the value of their old home.
The new law, which takes effect on April 1, 2021, expands the class of homeowners who are able to transfer their taxable value to include victims of wildfire or other natural disasters, regardless of age or disability status. The new law also removes the restriction that the replacement home must be in the same county as the old home. Now such replacements must simply be in the state of California. The new law also allows homeowners to buy a replacement home that is worth more than their old home, provided, however, that the increase in value is added to the transferred taxable value of the old home. For example, assume a homeowner is over 55. Her house has a taxable value of $5,000,000. She sells it for $15,000,000. If she buys a new home anywhere in California for $15,000,000 or less, she can transfer her $5,000,000 taxable value to the new home. This will be its taxable value. However, if she wants to upgrade to a $20,000,000 home, her new home's taxable value will be $10,000,000 – the taxable value of her old home transferred ($5,000,000) plus the upgrade value ($20,000,000 - $15,000,000.)
Ya, home prices falling but ol Dan needs the MONEY.
I bought during the 'Fall of the Wall' recession. The first three to five years of property tax, I filed an adjusted amount due to economic reasons (I forget the official name of it).
If home prices falling are really, truly, affecting you, look into home owner property adjustments/exemptions. If not, **** and be glad you have property to be taxed. Because many people haven't managed to get as far ahead economically as yourself.
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