- This topic has 109 replies, 16 voices, and was last updated 9 years, 2 months ago by
bearishgurl.
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August 22, 2015 at 11:27 AM #788821August 22, 2015 at 11:44 AM #788822
ltsddd
Participant[quote=bearishgurl][quote=ltsdd][quote=livinincali]
I do think bg probably has a point. Just about half of clairemont’s properties are assessed at less than 200K. The average selling price price for a home in 92117 right now is 500K+ from what I can tell.
[/quote]Up until the late ’90s, most SFH in clairemont (3/2 or 4/2, 2-car garage) valued below $200K. I would say that 50% of the houses exchanged hands in a period of less than 20 years is quite significant.[/quote]
ltsdd, Prop 13 is over 37 years old, not 20 years old. And even houses in 92117 which are currently assessed at between $200K and $300K could have been purchased more than 20 years ago … especially those homes with permitted room additions or second stories.
20 years ago was 1995 and it cost more than $200K to buy many homes in 92117 in 1995, especially those homes located within the “Bay-Ho” subdivisions.[/quote]
Hence, “most” homes valued at less than 200K.
August 22, 2015 at 11:51 AM #788823no_such_reality
ParticipantI bought about 5 years ago, if we taxed at market rates, based on the neighbors recent sale, my property tax would probably increase near 80% in that period. That’s trivial compared to what would have happened during the last boom cycle before the bust, when we had years were it would have went up 30-40% in a year. That is the reason Prop 13 came into existance.
It may have many flaws, but protecting home owners from tax increases that will average $100 a month or more each year for median priced homes isn’t one of them.
Is 2% annual increase low? Historical house appreciation has been around 3-4%. California does not have tax revenue problem, California has spending problems. The planned expenditures for 2014/2015 was $107 Billion in the general fund. Another $44 Billion in special funds. An another $98 Billion in Federal funds. Not including any bond funds.
LAUSD is a prime example, over the last 15 years, they’ve spent an inflation adjusted $18K per student each year across all their fund streams.
August 22, 2015 at 12:05 PM #788824bearishgurl
Participant[quote=no_such_reality]I bought about 5 years ago, if we taxed at market rates, based on the neighbors recent sale, my property tax would probably increase near 80% in that period. That’s trivial compared to what would have happened during the last boom cycle before the bust, when we had years were it would have went up 30-40% in a year. That is the reason Prop 13 came into existance.
It may have many flaws, but protecting home owners from tax increases that will average $100 a month or more each year for median priced homes isn’t one of them.
Is 2% annual increase low? Historical house appreciation has been around 3-4%. California does not have tax revenue problem, California has spending problems. The planned expenditures for 2014/2015 was $107 Billion in the general fund. Another $44 Billion in special funds. An another $98 Billion in Federal funds. Not including any bond funds.
LAUSD is a prime example, over the last 15 years, they’ve spent an inflation adjusted $18K per student each year across all their fund streams.[/quote]
NSR, assuming arguendo that you purchased your property 5 years ago for ~$700K and it is now worth ~$1.2M but is currently assessed at ~$770K, do you think it is fair that your kids will get to “inherit” it in trust for themselves with its $770K assessment intact if you and your spouse (if you have one) are killed in an accident tomorrow?
How much “fairer” will it be if it is assessed at ~$835K but is worth ~$1.5M in five more years at the time of your deaths?
August 22, 2015 at 1:49 PM #788827ParticipantSince my kid is 5, hopefully that doesn’t happen. In general, the generational passing of the asset is one of the things that is broken. The limit on the increase, isn’t.
Without concrete data, it’s hard to quantify what level is the problem. I bought my first townhouse in 1997. By 2003, it was accessed at less than half of market value. That wasn’t an intergenerational transfer, that’s California’s bubbly real estate. Anybody that purchase pre-2005, basically will be at half market. Even most peak buyers are even again.
The primary problem opponents of Prop 13 have is the massive over-reach they are doing in the money grab. And previously proposals against prop 13 have been money grabs and not tuning of minor issues with it.
August 22, 2015 at 3:05 PM #788829Participant[quote=no_such_reality]Since my kid is 5, hopefully that doesn’t happen. In general, the generational passing of the asset is one of the things that is broken. The limit on the increase, isn’t.
Without concrete data, it’s hard to quantify what level is the problem. I bought my first townhouse in 1997. By 2003, it was accessed at less than half of market value. That wasn’t an intergenerational transfer, that’s California’s bubbly real estate. Anybody that purchase pre-2005, basically will be at half market. Even most peak buyers are even again.
The primary problem opponents of Prop 13 have is the massive over-reach they are doing in the money grab. And previously proposals against prop 13 have been money grabs and not tuning of minor issues with it.[/quote]
NSR, I don’t agree that anyone who purchased pre-2005 has an assessment that is half of (today’s) market value. For those who purchased in 1997 … maybe … depending on location. Not ALL areas of the county have doubled in value since 1999.
If you will remember, “market rate” assessments in SD County were temporarily automatically reduced by the assessor in 2010, retroactive to FY ’09/10 and about 2-3 tax years after that, pursuant to Prop 8 and then brought back up to their prior (before the downturn) values in Sept ’13 tax bills issued for FY ’13/14, again, pursuant to Prop 8. Yes, the ’13/14 bill was probably an accurate reflection of values at that time as were the ’14/15 bills. But as far as my area is concerned, my tax bill isn’t cutting me any breaks really as my assessment is pretty close to market value … less than $100K difference, depending on terms of sale. Not ALL AREAS have doubled in value since 2009. Some areas (such as mine) have barely inched up in value partly due to few available nearby sold comps and what HAS mostly been sold were rundown properties purchased by (mostly buy-and-hold) flipper teams for cash. The “good stuff” around me situated on 1/2 AC+ lots is being hung onto by their longtime owners who are currently assessed at 1/6 to 1/10 of today’s market value. And I can’t blame them.
The other main reason my area doesn’t sell well is that there is a plethora of much newer construction available from 6-12 miles SE of here for comparable prices. Today’s buyers don’t seem to care about the extra hour per day in commute time, extra few hundred (thousand?) per month in MR/HOA attached to these subdivisions and the substandard lots that many (most?) of these homes are built on … only that they are “newer.” Today, newer homes outsell older ones by probably 8 or 10 to 1 in SD County, where family-forming buyers have many housing choices. Part of the reason is lack of inventory in the older areas (for reasons mentioned ad nauseam, above) and part of the reason is that millenials are unwilling, for the most part, to do any work on a property they just purchased and unwilling to move their household goods into a property which they feel “needs work.” By “needing work,” I mean that they don’t even want *new* carpeting if they can have flooring, instead. They won’t take even ten year old appls if they can have newer ones, instead. It’s all inconsequential stuff that ends up triggering them to actually make an offer on a property and they refuse to consider the big picture (like where, exactly, are their 3 kids going to play when they are working inside the home). Most millenial families will take a condo with little or no yard over a single family home as long as it is “newer.”
And retiring boomer-buyers are far and few between in crowded big cities and their close-in suburbs, imho. That is precisely the kind of life most of them are hoping to escape one day. I know because I am one.
So that only leaves the “local” buyer who grew up in the same micro-area and needs a home near other relatives so their kids can walk to relative’s houses after school while the parents work. Or buy-and-hold flippers who want to pay next to nothing for your house, put generic lipstick on the pig and rent it out. Neither of these types of buyers bode well for the seller making a “killing” on an older home which doesn’t have a view and is not located inside an “exclusive” area (such as Kensington, SD). That is, unless the seller bought at least 25 years ago and didn’t take out any equity.
August 22, 2015 at 3:13 PM #788830ParticipantYes, NSR, Prop 13 needs to be “tuned” . . . at the very least, Props 58 and 193 need to be completely repealed, even if those (hundreds of thousands?) who already filed intrafamily transfer deeds are “grandfathered.” This would stop the ultra-low taxation of the same parcel on into perpetuity.
However, this isn’t a minor tweak. It will be a major endeavor to get rid of these measures.
August 22, 2015 at 3:24 PM #788831FlyerInHi
GuestDespite some unfair assessments, no tweaks needed. I would donate money to defeat a tax grab.
Local government doesn’t need more property tax money. If they want people to sell their properties, they should just upzone the parcels for more development.August 22, 2015 at 3:57 PM #788833La Jolla Renter
ParticipantWhy isn’t prop 13 means tested?
In other words prove the hardship that prevents you from paying the property tax based on market value. (what the poor sap neighbor is paying that just purchased the house next door.)
Just like you can apply to have your property value reduced if it is being over valued. (which is a simple process and works pretty well in San Diego County)
full disclosure – I’m paying prop taxes based on close to market value for my current residence. Maybe everyone else commenting on this post should fess up their biases.
August 22, 2015 at 4:10 PM #788834Participant[quote=bearishgurl]
The “good stuff” around me situated on 1/2 AC+ lots is being hung onto by their longtime owners who are currently assessed at 1/6 to 1/10 of today’s market value. And I can’t blame them.
.[/quote]Did they buy? Are they hanging because it’s a pice of property you can’t new anymore or they holding on simply because of the tax? I suspect the former and not the later.
If it wasn’t transferred to them, what’s your argument? That they should get a $10,000 tax bill and force them out of the house?
That it isn’t fair for the people that bought 30 years ago and paid local taxes and supported the economy in the area for those 30 years have an unfir advantage compare to the person coming in today wanting to buy what they’ve built?
August 22, 2015 at 4:39 PM #788835HLS
ParticipantBG,
I don’t care about the T/J..
It turned into an interesting discussion 😉There are so many ‘programs’ that are ‘broken’
People who benefit from them defend them.
Those who can’t benefit feel cheated.
Always makes for good, friendly discussion !~August 22, 2015 at 6:17 PM #788836Participant[quote=no_such_reality][quote=bearishgurl]
The “good stuff” around me situated on 1/2 AC+ lots is being hung onto by their longtime owners who are currently assessed at 1/6 to 1/10 of today’s market value. And I can’t blame them.
.[/quote]Did they buy? Are they hanging because it’s a pice of property you can’t new anymore or they holding on simply because of the tax? I suspect the former and not the later.
If it wasn’t transferred to them, what’s your argument? That they should get a $10,000 tax bill and force them out of the house?
That it isn’t fair for the people that bought 30 years ago and paid local taxes and supported the economy in the area for those 30 years have an unfir advantage compare to the person coming in today wanting to buy what they’ve built?[/quote]
NSR, there are a few dozen large parcels around me (1/2 to 4 AC) which are essentially in the center of town but were never subdivided because the longtime owners refused to sell. I’m actually okay with the longtime original owner having an assessment equal to 18-22% of current market value and paying his/her tax bill accordingly. I’m also okay with those owners of homes under current Mills Act contracts who are assessed at 18-25% of market value. I’m okay with both of these types of owners as long as they themselves occupy the property. What I’m NOT okay with is the owner of the first type of property being able to transfer said property to his/her 55 year-old-son (or 32 year old grandson if the son is deceased) with his/her ultra-low assessment intact! And on and on through the descendants of this family. (Unexpired Mills Act contracts on real property are automatically transferred to a new arms-length owner by operation of law.)
August 22, 2015 at 6:31 PM #788837ParticipantI don’t want to hear any more complaining on this forum about inventory shortages causing skyrocketing housing prices (especially in coastal markets) from people who now profess not to care about the long-term ramifications of Props 58 and 193.
I get it that if an elephant is standing right in front of you, it can be a bit “tricky” to see what is on the other side . . . to get the complete “lay of the land,” if you will, before navigating your way around it :=]
I asked two very relevant questions earlier in this thread and the fact that no one answered them or commented on them is very telling to me.
[quote=bearishgurl]Food for thought and two questions for Piggs:
If you owned a SFR in SD County in good shape which was worth $400K, it had a current tax bill of $600 per year and could fetch $1750 in monthly rent, would you ever sell it?
If you had one or two siblings and your last parent recently passed and left their principal residence in San Diego County (a SFR worth $550K) to all of you in equal shares, would you attempt to purchase your siblings’ portion from them (~$275K – $367K) to take title to use the property for a rental investment? Current assessment is $78K, resulting in a current tax bill of $850, which would carry over to any new (child or granchild) owner. Monthly rent would be $2200 – $2400.[/quote]
August 22, 2015 at 7:10 PM #788832
CoronitaParticipantIt’s pretty funny who wants prop13 reformed and who doesn’t. Those that have a vested interest to keep low property taxes from an investment perspective, and those that don’t…..
I’m sure folks would be singing a different tune if that changed…I think people who win the powerball lottery should be forced to pay most of it back as taxes and only keep $2million at most. Because that’s what I would do if I were to win…(Now if I actually win, that would be a different story :))
August 22, 2015 at 10:21 PM #788841Participant[quote=bearishgurl]Food for thought and two questions for Piggs:
If you owned a SFR in SD County in good shape which was worth $400K, it had a current tax bill of $600 per year and could fetch $1750 in monthly rent, would you ever sell it?
If you had one or two siblings and your last parent recently passed and left their principal residence in San Diego County (a SFR worth $550K) to all of you in equal shares, would you attempt to purchase your siblings’ portion from them (~$275K – $367K) to take title to use the property for a rental investment? Current assessment is $78K, resulting in a current tax bill of $850, which would carry over to any new (child or granchild) owner. Monthly rent would be $2200 – $2400.[/quote]
Would I? Maybe to both scenarios. The lower tax just factors into the cash flow and roi. Are you an experienced landlord? Do you own the 400k property free and clear?
If the properties were old run down homes and you were not ready to be a landlord, then the inexperience and a couple bad tenants could wipe out the lower tax rate pretty quick. You could sell the properties and put the money into the market and probably fair just as well with no headaches.
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