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When it came about there were a lot of stories of farms and small family businesses forced to sell because of the new increased tax burden.
Don't think it is used anywhere as much as it could be.
I live in Oakland and not a single one of the kids wanted the property after their parent died in my circle... they all sold and split the money if more than one. When you really think of it... most kids are settled with kids of their own and being a landlord is not of interest to a lot of people... plus not many would want a 80+ year old one bath home of 1100 square feet which is the most common.
Do know a lady whose Grandmother owns a decrepit home here... she is pushing 90 and I helped get the Christmas in April group to put a new roof on the modest home... it was leaking and her social security check was not going to cover a new roof.
The Grandma had a single child who was killed in Vietnam... a few years later the daughter in law passed leaving the granddaughter to live with her grandma... the home will pass to the granddaughter without reassessment... which is probably her only chance to own a home.
Property Tax is about $1800 with a lot of that being special assessments... we have a lot of those here.
I would imagine with today's high prices the taxes would double without the provision... so instead of $150 a month it would be about $300... the granddaughter worked at Walmart before the Oakland store was closed...
No the fixed property taxes are meant to protect elderly people living on fixed income.
The notion that you should tax a 70 year old out of their home, after they payed off their house, paid all their taxes, and helped make/keep the neighborhood desirable is moronic.
The people who usually are the biggest proponents of raising property taxes are (big surprise) renters with no skin in the game.
A lot of people who say they wish they could afford to buy a house in the SF Bay Area think properties would become affordable to themselves if prop 13 would be rescinded. Somehow they're deluded into thinking they would no longer have competitors for properties or that there would be so many properties available that the prices would decrease.
If prop 13 gets rescinded, I doubt they'd find any advantage or be capable of affording the taxes if they're currently renters and struggle to pay their rent. The "people" who cry for prop 13 to be rescinded are just self-entitled dreamers beside lacking hearts and consciences considering they want to take homes away from the elderly people.
Something is VERY WRONG with many people these days to heartlessly favor a barbaric, materialistic, dog-eat-dog type of competitive society that would force elderly people out of their homes.
A lot of people who say they wish they could afford to buy a house in the SF Bay Area think properties would become affordable to themselves if prop 13 would be rescinded. Somehow they're deluded into thinking they would no longer have competitors for properties or that there would be so many properties available that the prices would decrease.
If prop 13 gets rescinded, I doubt they'd find any advantage or be capable of affording the taxes if they're currently renters and struggle to pay their rent. The "people" who cry for prop 13 to be rescinded are just self-entitled dreamers beside lacking hearts and consciences considering they want to take homes away from the elderly people.
Something is VERY WRONG with many people these days to heartlessly favor a barbaric, materialistic, dog-eat-dog type of competitive society that would force elderly people out of their homes.
A lot of people who say they wish they could afford to buy a house in the SF Bay Area think properties would become affordable to themselves if prop 13 would be rescinded. Somehow they're deluded into thinking they would no longer have competitors for properties or that there would be so many properties available that the prices would decrease.
If prop 13 gets rescinded, I doubt they'd find any advantage or be capable of affording the taxes if they're currently renters and struggle to pay their rent. The "people" who cry for prop 13 to be rescinded are just self-entitled dreamers beside lacking hearts and consciences considering they want to take homes away from the elderly people.
Something is VERY WRONG with many people these days to heartlessly favor a barbaric, materialistic, dog-eat-dog type of competitive society that would force elderly people out of their homes.
Well, that's one way to think about it. But, here's another (less radical, less accusatory) way:
1)Currently, Prop 13 property tax limitations apply to businesses. So, for example, any McDonald's franchise that is in the same location as it was in 1973 is paying one minuscule property tax, while the Wendy's franchise that came in in 2016 right next door is paying a much much higher property tax. The application of Prop 13 property tax limitations should be rescinded for all businesses and franchises (yes, even the Warriors ) except for LLCs, partnerships, or small businesses.
2)Currently Prop 13 property tax rates follow the property in inheritance. If the aim is to keep elderly widows in their homes--a noble aim almost no one opposes--once the elderly widow dies that reason no longer applies. Beneficiaries can cash out, but some do not. Although I do not know the number, someone else might. However, whatever the number, the number is not zero, and here's yet another example where even low numbers of something can have an outsized impact on whether a system is fair. This should be rescinded except in cases where the child who inherits is above some age (where one might have compassion on them having to move after having retired).
Its hard to defend some large businesses and estate beneficiaries having minuscule property taxes while others pay much larger amounts. There's no fair basis for saying "You or your parent lived here or had a business here in 1973, so, CONGRATULATIONS!, YOU won the lottery, and no longer need to pay what others pay to support local infrastructure, education, public health, and more." But that's exactly what the two elements of Prop 13 identified above do. Thus, those elements, and only those elements, should be rescinded.
Prop 13 is an emotional issue to many. Alas, the emotion of the issue makes it hard to fix even its obvious problems.
Governor Brown has repeatedly said Prop 13 is settled law... he should know as he was Governor when the voters made it law.
California specifically forbids a split tax roll... each property basis is the Fair Market Value at the time of transfer.
Prop 13 is silent about inheritance... other later enacted propositions address this.
I was too young to have voted for Prop 13 when it became law... I am forever thankful it did.
There were many attempts to make the Homeowner exemption meaningful again during the 70's... the legislators wanted no part of it and were happy to let the people decide... and the people spoke loud and clear.
The State even put a competing measure on the ballot... too little too late.
1973 for a base year is really meaningless as this predated Prop 13.
As for a McDonald's... I do not believe there is a original, intact McDonald's from that era anywhere in California today...
Property is subject to be reassessed when improvements are made... most McDonalds have major makeovers over 10 to 15 years... so many opportunities for for reassessment.
I do know several family farms now sitting on some very valuable Real Estate that are still farms... agree or disagree but this is only possible due to California inheritance law.
Prop 13 may not be perfect but I would never want to return to the old way of doing things where the Assessor best guess of property value was used to determine taxes due...
Not to even mention the Voter approval component to add new assessments... 55% to build a new school... sounds very reasonable to me.
Then there is the fact California imposes taxes neighboring States don't... no sales tax in Oregon and no Income Tax in Washington and Nevada...
Governor Brown has repeatedly said Prop 13 is settled law... he should know as he was Governor when the voters made it law.
1)Fortunately, the electoral system is designed to make dictatorial claims have no force of law. He may think its settled. Pre-Prop 13 property tax rules were ALSO settled law. That changed. So can this, if people recognize its problems and make the needed changes.
Quote:
Originally Posted by Ultrarunner
California specifically forbids a split tax roll... each property basis is the Fair Market Value at the time of transfer.
Prop 13 is silent about inheritance... other later enacted propositions address this.
The issue is not some sacred document called PROP 13. Frankly, I don't care what its called. And, that document being silent on inheritance is irrelevant--the relevant issue is whether taxes are adjusted upon inheritance, i.e., is inheritance defined as a transfer for property tax purposes. Is it? My, my accountant's, and my lawyers read of the law is "No." So, the question is, is this fair? There are scarcely few economists, lawyers, or accountants who would say this is fair. It may be the law, but it is not fair.
Quote:
Originally Posted by Ultrarunner
I was too young to have voted for Prop 13 when it became law... I am forever thankful it did.
So was I. And I am thankful . . . for SOME of the provisions in the tax code. Others are problems, and should be fixed.
Quote:
Originally Posted by Ultrarunner
There were many attempts to make the Homeowner exemption meaningful again during the 70's... the legislators wanted no part of it and were happy to let the people decide... and the people spoke loud and clear.
The State even put a competing measure on the ballot... too little too late.
Agreed. But, are you saying people born in 1990 should pay the costs of 1970 legislator's folly, in cases where we can do something about it now?
Quote:
Originally Posted by Ultrarunner
1973 for a base year is really meaningless as this predated Prop 13.
Pick any base year you want, given time the issue will be the same. The base year is a red herring.
Quote:
Originally Posted by Ultrarunner
As for a McDonald's... I do not believe there is a original, intact McDonald's from that era anywhere in California today...
Property is subject to be reassessed when improvements are made... most McDonalds have major makeovers over 10 to 15 years... so many opportunities for for reassessment.
I ask you not to be so literal. McDonald's and Wendy's were examples. The question isn't whether property taxes of any business should be based on assessments from 43 years ago, the question is whether property taxes of competing businesses should be based on recent assessments so they all have the same playing field. Your claim implies the answer is no--if business never does any upgrades, they get to keep paying taxes based almost completely on when they obtained the property. That's not fair--in fact, it rewards businesses the less current they stay. In what world is that good economics or social policy?
Quote:
Originally Posted by Ultrarunner
I do know several family farms now sitting on some very valuable Real Estate that are still farms... agree or disagree but this is only possible due to California inheritance law.
I did not address farms, but if it were up to me I would keep the inheritance laws as they are for family farms. I see nothing wrong with that--indeed, that is a good thing.
Quote:
Originally Posted by Ultrarunner
Prop 13 may not be perfect but I would never want to return to the old way of doing things where the Assessor best guess of property value was used to determine taxes due...
I clearly rejected "return[ing] to the old way of doing things." But, two wrong ways don't make it right. We should make smart changes in the tax laws, not be paralyzed by commitment to the sacred label, PROP 13.
Quote:
Originally Posted by Ultrarunner
Not to even mention the Voter approval component to add new assessments... 55% to build a new school... sounds very reasonable to me.
Not really reasonable. If 52 percent of the people support some costly policy, it passes. But, they don't have enough support to be fiscally responsible, so the jurisdiction takes on debt. It just makes any expenditure more costly in the long run, because debt-financing is more expensive than taxation. So, who wins with this? The bankers who service the debt. Doesn't seem like good policy to me.
Quote:
Originally Posted by Ultrarunner
Then there is the fact California imposes taxes neighboring States don't... no sales tax in Oregon and no Income Tax in Washington and Nevada...
Sales taxes are regressive (i.e., the poor pay a higher percentage of their income in such taxes than do the wealthy). As for income taxes, it would be unfair to remove the income tax and only tax property. Why should people who own property pay all the taxes, and people who earn wages not pay any? States that tax property but not income are helping workers at the expense of retirees. In my view everyone should pay a fair share, so they have a stake and help support the community. For that to happen, no one should have their contribution locked in at pennies compared to others just because their parents happened to own property in the state decades ago. There's no coherent vision that renders that as fair.
Everyone is free to have their policy preferences. But, those who see PROP 13 and current tax laws as sacred should not claim to have the moral high ground. Its past time to keep punishing contemporary people for the sins of 1970s legislators. We can have tax laws that work for everyone--if we take emotion out of the discussion, refrain from imputing evil motives to those who see things differently, and engage each other respectfully.
And it's just as easy to sit there and sensationalize how many inheritances there are as though that's some artificially high number (which I seriously doubt, but I don't have a number on it either...nor do I want to waste the time trying to find one). I suspect, as Ultrarunner said, more than likely, the heirs do tend to cash out, and then we have a reassessment and that tax is on a basis of roughly a million dollars+. And I seriously doubt you would find many businesses that haven't renovated (so more sensationalizing). I can't help but laugh at people that whine about Prop 13 and then of course, 20 years later when they aren't paying the highest property tax, they have no problem with it (and the newbies are the ones whining). The housing prices in CA go in ebbs and flows but after every recession for the last 40 years, they've exceeded their previous highs (and much of that goes to new assessments and more tax money). I get bored with the class envy bull****. And I also get bored with the whole "fair share" crap also. Feel free to define that because from my vantage point, most people in this city pay above and beyond what others in the country pay in taxes. I'm sorry but I think we've been shaken down enough. And the worst part about it is...results don't matter. If our state budget was run like a business, there'd be plenty of money for everything. But every time I drive over a pothole (one of many issues of wasted tax money), I just curse at the corruptness of the politicians in this state (so yeah, I curse a lot). There's a simple solution. If people are going to sit there and be petty about the older couple that pay less in property tax than they do if they buy the house next to them.....DON'T BUY IT! It's not like there's a gun to your head. And you'll be in the same boat as them in the future. At some point, everyone will pay higher property taxes and then they'll pay lower. Sounds fair enough to me.
Again... it is not Prop 13 that determines Parent/Child transfer exclusion and linking to Inheritance is grossly misleading.
Here is why... Parent/Child transfer works both ways... and NO ONE HAS TO BE DEAD... inheritance requires a death...
There is also a Grandparent/Grandchild transfer exclusion and in this case the parent has to be Dead.
Neither of the above is automatic... it must be applied for with sufficient documentation to satisfy the Assessor... sometimes it languishes for up to a year and I have advised several that did not even know certain transfers could claim exclusions... the most recent is a co worker... they owned a small condo and now have one child and another on the way... the Mom lives alone in a 3 bedroom home... with my help they were able to exchange homes with no reassessment... again, no inheritance involved.
The beauty of Prop 13 is in it's simplicity... a couple of short paragraphs replaced volumes of tax code... no more guessing as to value... real world numbers based on market sales.
Several Assessors went to prison for giving sweetheart deals to those of influence and power and there was even a suicide.
By background is engineering... I am always suspect when it comes to guesses... by law Real Estate is unique and using what another home sold for as the standard for what another home is worth is at best an educated guess...
An appraiser explained to me how flawed using comps to determine value is... that property has been sold is no longer on the market and the transaction is history... more accurate is to use asking prices of similar homes.
What good does it to go to the market to buy a pound of steak and the butcher says it's $5 a pound and you say last week it was $4??? The $4 steak is gone.. if you want steak today it will cost $5.
I would say Governor Brown's statements means he is not interested in spending his time/capital to overturn or defeat it... he's been there and done that. I can't speak from him but he certainly has the most extensive credentials on the subject.
Of course if enough political will exists things do change...
On a personal note... I would meet the definition of a person that should be very much against Prop 13... the people that sold me the home were paying $1200 and it went to $8800.... It might come as a surprise that I think it was great that taxes did not create a situation where they were forced from the home they built in 1958...
The reason it is fair is because chances are, or at least I hope to be in the same situation in 30 or 40 years... I am prepared to shoulder my tax burden under Prop 13 because I believe my best earning years are ahead of me... and... as mentioned... the couple that sold me the home paid a lot the first 30 years to retire the bonds for the special assessment district to pay for the infrastructure I get to enjoy.
It is worth the price, "Flaws and All" to have some semblance of predictability...
Prop 13 is wonderful because it puts real power in the hands of the voters to approve assessments... in other words the people paying the taxes have a say when politicians have to ask and make the case.
The voters in Oakland have been extremely generous in approving assessments... I think there are 23 on my tax bill making my tax rate 70% over Prop 13 Statewide 1%...
A Fair tax would be a flat tax... so everyone has skin the game... just because I pay more for my home doesn't mean I use more in services... I may live in a $500k home with no kids and my neighbor has 5 kids.
Sales Tax is Fair... everyone is in it together... we all know what an item will cost... rich or poor the rate is the same.
Progessive/Regressive... it's all mumbo jumbo... I worked for a time in Europe and the sales tax on a new car, camera, etc was 32%... property tax was very cheap... basically to cover the cost of maintaining roads and drainage... homes of my friends had been in their families for hundreds of years.
As a side not... Washington State had it's own version of Prop 13 called I-747 which voters approved... the moment a Judge overturned it my property tax jumped 80% from the price I paid 18 months prior...
I have experienced what happens when property tax caps are overturned and it has made me passionate about Prop 13
A lot of people who say they wish they could afford to buy a house in the SF Bay Area think properties would become affordable to themselves if prop 13 would be rescinded. Somehow they're deluded into thinking they would no longer have competitors for properties or that there would be so many properties available that the prices would decrease.
If prop 13 gets rescinded, I doubt they'd find any advantage or be capable of affording the taxes if they're currently renters and struggle to pay their rent. The "people" who cry for prop 13 to be rescinded are just self-entitled dreamers beside lacking hearts and consciences considering they want to take homes away from the elderly people.
Something is VERY WRONG with many people these days to heartlessly favor a barbaric, materialistic, dog-eat-dog type of competitive society that would force elderly people out of their homes.
Something is wrong when deteriorating 900 square foot houses built in the 50s sell for millions. Especially when they were no more than 10-15,000 new
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) except for LLCs, partnerships, or small businesses.
