What about kids who purchase, at market value, from their parents?
That’s what I did. When my dad was ready to downsize, he needed/wanted the equity to fund his new home and his retirement. I paid full market value – but had Dad’s prop-tax-rate transferred. My neighbors across the street did the same thing 4 years earlier when their dad was downsizing. The guy at the top of our street did it about 7 years earlier. Only one 2nd gen’er on our block inherited the house, the guy 2 doors up – but he was primary caretaker for his mom for the final 10 years – he inherited 1/2 the house – he paid his brother for the other half.
I know for a fact that most of us owned other homes before purchasing from our parents. This is my third home. Neighbors across the street and up the hill both owned in Clairemont before moving back to the homestead in UC.
None of us (to my knowledge) have ATM’d the house. My neighbors across the street have the same stated goal we do – pay it off before retirement. That’s hard to do if you’re pulling cash out rather than paying off the balance. I don’t see a lot of fancy upgrades in the garages indicating HELOC madness on our block.
I can see an argument against transferring the prop 13 rate between generations. I also agree with CAR’s point about prop 13 being disallowed for non-owner-occupied… But, since it was available, I took advantage of it. But it wasn’t a full-on freebie. My dad was downsizing and hoped to transfer his tax rate to his new condo… You can’t do both. We decided to pool the two property taxes and split them – that way we both got some benefit.
As far as maintenance… well, perhaps I resemble that remark too… My front yard has a lot of weeds. My bad. But the other 2nd gen owners all have impeccable houses.
