[quote=XBoxBoy][quote=bewildering]Dumb question. Does prop 13 protect tax rates even if you move out and turn the house into a rental? I assumed you had to be an owner occupier to benefit. I thought prop 13 was meant to protect old people from having their fixed costs change.[/quote]
Not only does it protect rental properties, it protects second houses that you don’t live in, and surprise, surprise, commercial properties.
Here’s an article lambasting the tax break that commercial property owners are getting from this system.
Couldn’t agree more that this is totally wrong and needs to be addressed.[/quote]
This is what I’ve been saying here for years. Prop 13 is a subsidy to many very wealthy people. I know of an apartment building in L.A. that has been owned by the same family for decades. It’s worth millions, but their tax bill is ~$14,000, IIRC.
Unlike BG, I don’t have as much of a problem with inheriting the Prop 13 tax basis (though heirs should not be able to step-up their cost basis for cap gains, either, if they keep the Prop 13 subsidy), because the reason Prop 13 passed was to keep people from being taxed out of their homes. I don’t think anyone should be taxed out of their family homes, but these homes should be their only residence.
While I fully agree with Prop 13 protection for a single primary residence, there is no reason in the world for us to be subsidizing landlords, vacation rental owners, absentee/second home owners, and wealthy commercial and industrial property owners, not to mention people like the Pardee family who are probably getting tax subsidies in the millions each year (not just Prop 13, but the Williamson Act).
