[quote=bearishgurl][quote=XBoxBoy][quote=jpinpb]There are few people who are paying low property taxes, especially after this last bubble.[/quote]
Not true. Here in La Jolla there are lots of people with tax basis that is a tenth of what their neighbors is. Several people on our street are original owners who paid 8-12k for their places. Their neighbors are paying taxes on a basis of 1.5 to 2.5 mil. I find that hardly a fair distribution of the tax burden.[/quote]
Absolutely agree, XBoxBoy. In my older “tract” of 75-80 properties, there were 8 homeowners paying “market rate property taxes” last time I looked. There have been 2-3 recent sales since then which were all “arms-length,” I believe. That would make approx 10-11 homeowners paying market rate property taxes today. I am one of those “unfortunates.” The neighbor on the right side of me pays approx $792 year and the my neighbor on the left side of me pays approx $380 yr.
These close neighbors of mine are NOT orig Prop 13 homeowners. They are HEIRS of prop 13 homeowners, age 61 and 64, respectively (“baby-boomers,” if you will), who “inherited the Prop 13 tax treatment” from their last living parent. Both “inherited” their properties in the early eighties and have been enjoying this low tax rate ever since. I am also a “baby-boomer,” a few years younger than my neighboring homeowner-heirs. I currently pay approx $3100 yr in property tax (after two reductions by the county assessor). The first reduction was obtained by me through a stipulation in lieu of a pending assessment appeal hearing and the second reduction was voluntary, by the assessor. Without these recent reductions, my current annual property tax would be approx $4600.
How is this fair to me or any other market-rate buyer in the last 20 years?? I’m not a RECENT buyer (almost 10 yrs. ago) and actually got a good deal at the time of purchase, including a large cash credit at COE. How are these two “heirs” (out of several hundred thousand in CA) any less able-bodied than myself to pay a market-rate property taxed based upon the stepped-up value at the time of death?? This is the way OTHER STATES handle this issue.
I understand that 75+ year-old seniors need an affordable place to live until they pass. That was the original purpose of Prop 13, to protect seniors from having to sell their principal residence, due to exorbitant property taxes. But the ability to “pass on” its benefits to heirs makes Prop 13 “unjust enrichment” to CA heirs in perpetuity (several generations hence), simply by virtue of a parent/grandparent buying the property before April 1978.
Do Piggs see all these “heirs” and “heirs of heirs” any LESS able-bodied than you and I to pay “market-rate” property tax.
I believe in Prop 13’s original intended purpose but propose that this benefit die with the last (pre-April 1978) owner.[/quote]
It’s not just a matter of whether or not they are “able-bodied.” The issue is that people should be able to plan their budgets, and you can’t do that with wildly fluctuating/increasing property taxes. Just as ARM loans will cause problems when rates rise, unlimited property tax increases will cause problems.
I fully support Prop 13, largely because people **voluntarily** sign up to pay the higher taxes (if you don’t want to pay higher taxes than the neighbors, make it a point not to pay more than they did +2%/yr). The reason today’s buyers are paying higher taxes is because those buyers volunteered to do so. It’s like buying near an airport and then complaining about the airplane noise.
We can’t let flippers and idiots determine what the neighbor pays in property taxes. Under Prop 13, everyone is free to pay high or low property taxes (you choose what to pay for a house). If you don’t like the high taxes, pay less for the house, or buy a cheaper house elsewhere. I love how idiots make decisions for themselves, and then want everyone else to pay for it after the fact.
OTOH, while I support Prop 13, it should not be inherited UNLESS the heirs choose Prop 13 protection over stepping-up the cost basis on the house. If the cost basis is stepped up, then the property taxes should be stepped up as well.
