Now that you’ve made the mistake, it’s hard to undo. Try to list the house at a high price and see if you find some greater fool. Offer to give cash back to the buyer to the maximum possible. You might be able to get out. If not, you have no choice but to hunker down.
On property taxes, no, I’m not incorrect. I was attempting to debunk the argument that if you hold long term and that when you market recovers, you’ll be OK. Certainly not as far as property taxes are concerned.
Say the market troughs in 2012 and takes off again and by 2020 the house is worth $800k. In that case, you’ll definitely pay $4004 more than the neighbor who buys at $350k in 2012. That difference will grow as time goes by.
Yes, you can temporarily appeal your property taxes, but as soon as prices get back to above purchase price + 2% compounded annually, the county will adjust you right back to the high basis (Proposition 8). http://www.sdarcc.com/arcc/docs/calrev.pdf
Personally, I would not be happy to pay $4,000 more in property taxes than my next door neighbor based on time and price of purchase. I’d rather donate the money to charity.
