I want to take partial issue with Prop 13. I am a lifelong CA resident but my parents divorced and moved to other states (after us kids were gone) where they subsequently retired and died.
I live in an area (central Chula Vista) where the average homeowner age is 77. Not only do most of my neighbors own their homes outright, their PT’s are regulated by Prop. 13. Average taxes on my block are $327 annually. Mine are now $3434, ONLY after a 1-1/2 year-long appeal and stipulated agreement with the (overloaded) assessor just short of a scheduled hearing (I purchased this particular property in 2001).
These post-World-War II homeowners (who keep up their properties themselves or hire it done) eventually die, thereby leaving their propertie(s) to their child(ren). What happens next really incenses me. The decedents’ 50-65 year-old “children” then move into the property (BTW this is also my demographic), PROMPTLY use it as their personal ATM machine, INHERIT THEIR PARENT(S) LOW TAX BASIS and let the property go to waste while they and their families are living in it. In all cases that I know of, these “children” had never owned real property in their lives until “mom and dad” both died.
I don’t think a Prop. 13 tax basis should be transferable through an interfamily transfer deed or by the filing of a death certificate. I think the law should be rewritten to repeal this loophole. I think real property in CA should be reassessed on a stepped-up basis at the time of death. My experience is that many heirs, it seems, have NO APPRECIATION WHATSOEVER for property that they never had any financial stake in and NO CLUE how to maintain real property. A stepped-up PT at the time of death might weed out the local heirs from moving into the property and living there for free (except for utility payments). Instead these “heirs” might be encouraged to SELL the property to a “qualified” party as opposed to attempting to live in it themselves (on TANF/SSD/OASDI/SSI/Worker’s Comp/UI/VA Disability etc.) and “attempt” to pay annual property taxes they couldn’t otherwise afford.
BTW, this post isn’t just a “sour grapes” rant. Both my parents left me and my siblings real property in other states, neither of which had “Prop. 13” – type legislation in place. We simply sold the properties rather than try to place tenants in them and keep up the taxes and, in one case, HOA dues.
“Heir ATM machines” (all encumbered with sucker loans made to “equity holders” with no other capacity to borrow) were representative of the three foreclosures on the block in recent months/years, which hurt the rest of our property values. “Mom and Dad” must be turning over in their graves by now.
This is NOT a small issue. The state and counties could realize A LOT of teeter funds coming their way via the reassessment of properties through deaths. Pre-1978 original property owners are a large demographic in CA who will pass down their wealth through their depression-era savings mentality.
