Thoughts on property taxes and Prop 13

[Coronita]

[quote=AN]Could it possibly just mean that the majority of home owners bought their house long time ago, so they’ll still be hit w/ the increase, since their appraised value for tax purposes is way under the current value.[/quote]

I think hit is probably small for really long term homeowners versus current assessed values… But I’m wondering what percentage of these folks fall into these categories. I would think someone who was an owner since say 1980’ies wouldn’t have blown it (at least not in big proportions)….maybe I’m wrong

Also,I’m not sure if you folks are aware of this, but there is also a homeowner’s exchange rule for older people that allows them to keep their property tax basis if they exchange a home of equal or less value. So for example, if retired couple X decides to sell their home purchased in say 1980 for say $200k at current market value of say $1million and purchase a new home say at $1million or less, their assessed tax is still what they were previously paying. There are some caveats, one being the two counties of old and new residence must be participating in this exchange scheme.

[briansd1]

A remodel does not trigger a full reassessment, only and assessment on the additional value created by the improvement.

A refi is between the bank and the borrower, nothing to do with County Assessor.

The reassessment would be due to people losing their long-time houses to new owners who have pay taxes based on higher assessed values.

Doesn’t matter how a property is transferred (short sales, foreclosure, regular sale), churn triggers a reassessment (except for transfers to kids, trust, etc..)

[briansd1]

A remodel does not trigger a full reassessment, only and assessment on the additional value created by the improvement.

A refi is between the bank and the borrower, nothing to do with County Assessor.

The reassessment would be due to people losing their long-time houses to new owners who have pay taxes based on higher assessed values.

Doesn’t matter how a property is transferred (short sales, foreclosure, regular sale), churn triggers a reassessment (except for transfers to kids, trust, etc..)

[briansd1]

A remodel does not trigger a full reassessment, only and assessment on the additional value created by the improvement.

A refi is between the bank and the borrower, nothing to do with County Assessor.

The reassessment would be due to people losing their long-time houses to new owners who have pay taxes based on higher assessed values.

Doesn’t matter how a property is transferred (short sales, foreclosure, regular sale), churn triggers a reassessment (except for transfers to kids, trust, etc..)

[briansd1]

A remodel does not trigger a full reassessment, only and assessment on the additional value created by the improvement.

A refi is between the bank and the borrower, nothing to do with County Assessor.

The reassessment would be due to people losing their long-time houses to new owners who have pay taxes based on higher assessed values.

Doesn’t matter how a property is transferred (short sales, foreclosure, regular sale), churn triggers a reassessment (except for transfers to kids, trust, etc..)

[briansd1]

A remodel does not trigger a full reassessment, only and assessment on the additional value created by the improvement.

A refi is between the bank and the borrower, nothing to do with County Assessor.

The reassessment would be due to people losing their long-time houses to new owners who have pay taxes based on higher assessed values.

Doesn’t matter how a property is transferred (short sales, foreclosure, regular sale), churn triggers a reassessment (except for transfers to kids, trust, etc..)

[temeculaguy]

biran is right, there are a lot of misunderstanding about property taxes. For example, lets say you have a house you bought for 100k in 1980, over time, with the mild increase allowed under prop 13 you are paying taxes on about 150k, yet your place is worth 700k. If you do a permitted kithen remodel for 30k, they don’t reset you to todays market value, they just tack on the 30k to the 150k, and the place is now taxed at 180k, still way below market. Now jp’s point, if it repos and is taken back by the bank, the new owner will get it for , lets say 500k, which might be below market but well above what the taxes were, so the local gov’t collects more. Local government wouldn’t be in bad shape if property taxes were their only source of income, but their sales tax revenue is off. Even still they would be fine, but the state keeps “borrowing” money from the locals, forcibly. San Diego would have been fine had it not been for the state’s woes.

Another point is that all the unpaid taxes because of the repo process taking so long and escrow accounts not paying the taxes, yet banks not taking the houses back, the local gov’t will eventually get it’s taxes, they don’t write that off, they hold up any transfer, refi, sale or whatever, until they get paid, with penalities. Rest assured, death and taxes are guaranteed.

[temeculaguy]

biran is right, there are a lot of misunderstanding about property taxes. For example, lets say you have a house you bought for 100k in 1980, over time, with the mild increase allowed under prop 13 you are paying taxes on about 150k, yet your place is worth 700k. If you do a permitted kithen remodel for 30k, they don’t reset you to todays market value, they just tack on the 30k to the 150k, and the place is now taxed at 180k, still way below market. Now jp’s point, if it repos and is taken back by the bank, the new owner will get it for , lets say 500k, which might be below market but well above what the taxes were, so the local gov’t collects more. Local government wouldn’t be in bad shape if property taxes were their only source of income, but their sales tax revenue is off. Even still they would be fine, but the state keeps “borrowing” money from the locals, forcibly. San Diego would have been fine had it not been for the state’s woes.

Another point is that all the unpaid taxes because of the repo process taking so long and escrow accounts not paying the taxes, yet banks not taking the houses back, the local gov’t will eventually get it’s taxes, they don’t write that off, they hold up any transfer, refi, sale or whatever, until they get paid, with penalities. Rest assured, death and taxes are guaranteed.

[temeculaguy]

biran is right, there are a lot of misunderstanding about property taxes. For example, lets say you have a house you bought for 100k in 1980, over time, with the mild increase allowed under prop 13 you are paying taxes on about 150k, yet your place is worth 700k. If you do a permitted kithen remodel for 30k, they don’t reset you to todays market value, they just tack on the 30k to the 150k, and the place is now taxed at 180k, still way below market. Now jp’s point, if it repos and is taken back by the bank, the new owner will get it for , lets say 500k, which might be below market but well above what the taxes were, so the local gov’t collects more. Local government wouldn’t be in bad shape if property taxes were their only source of income, but their sales tax revenue is off. Even still they would be fine, but the state keeps “borrowing” money from the locals, forcibly. San Diego would have been fine had it not been for the state’s woes.

Another point is that all the unpaid taxes because of the repo process taking so long and escrow accounts not paying the taxes, yet banks not taking the houses back, the local gov’t will eventually get it’s taxes, they don’t write that off, they hold up any transfer, refi, sale or whatever, until they get paid, with penalities. Rest assured, death and taxes are guaranteed.

[temeculaguy]

biran is right, there are a lot of misunderstanding about property taxes. For example, lets say you have a house you bought for 100k in 1980, over time, with the mild increase allowed under prop 13 you are paying taxes on about 150k, yet your place is worth 700k. If you do a permitted kithen remodel for 30k, they don’t reset you to todays market value, they just tack on the 30k to the 150k, and the place is now taxed at 180k, still way below market. Now jp’s point, if it repos and is taken back by the bank, the new owner will get it for , lets say 500k, which might be below market but well above what the taxes were, so the local gov’t collects more. Local government wouldn’t be in bad shape if property taxes were their only source of income, but their sales tax revenue is off. Even still they would be fine, but the state keeps “borrowing” money from the locals, forcibly. San Diego would have been fine had it not been for the state’s woes.

Another point is that all the unpaid taxes because of the repo process taking so long and escrow accounts not paying the taxes, yet banks not taking the houses back, the local gov’t will eventually get it’s taxes, they don’t write that off, they hold up any transfer, refi, sale or whatever, until they get paid, with penalities. Rest assured, death and taxes are guaranteed.

[temeculaguy]

biran is right, there are a lot of misunderstanding about property taxes. For example, lets say you have a house you bought for 100k in 1980, over time, with the mild increase allowed under prop 13 you are paying taxes on about 150k, yet your place is worth 700k. If you do a permitted kithen remodel for 30k, they don’t reset you to todays market value, they just tack on the 30k to the 150k, and the place is now taxed at 180k, still way below market. Now jp’s point, if it repos and is taken back by the bank, the new owner will get it for , lets say 500k, which might be below market but well above what the taxes were, so the local gov’t collects more. Local government wouldn’t be in bad shape if property taxes were their only source of income, but their sales tax revenue is off. Even still they would be fine, but the state keeps “borrowing” money from the locals, forcibly. San Diego would have been fine had it not been for the state’s woes.

Another point is that all the unpaid taxes because of the repo process taking so long and escrow accounts not paying the taxes, yet banks not taking the houses back, the local gov’t will eventually get it’s taxes, they don’t write that off, they hold up any transfer, refi, sale or whatever, until they get paid, with penalities. Rest assured, death and taxes are guaranteed.

[an]

[quote=jpinpb][quote=AN]Could it possibly just mean that the majority of home owners bought their house long time ago, so they’ll still be hit w/ the increase, since their appraised value for tax purposes is way under the current value.[/quote]

Not even close to what it should be for those that bought in the ’70’s and ’80’s.[/quote]
I’m not debating whether the tax people pay for houses they bought in the 70s/80s is close to what it is at today’s market value. What I’m trying to say is if the majority of property tax payer own their house before 2003, the 2% increase in that majority will more than enough to offset the tax decrease of houses that were bought in 2004-2008. That’s why we’re seeing record property tax total even as housing price fall.

[an]

[quote=jpinpb][quote=AN]Could it possibly just mean that the majority of home owners bought their house long time ago, so they’ll still be hit w/ the increase, since their appraised value for tax purposes is way under the current value.[/quote]

Not even close to what it should be for those that bought in the ’70’s and ’80’s.[/quote]
I’m not debating whether the tax people pay for houses they bought in the 70s/80s is close to what it is at today’s market value. What I’m trying to say is if the majority of property tax payer own their house before 2003, the 2% increase in that majority will more than enough to offset the tax decrease of houses that were bought in 2004-2008. That’s why we’re seeing record property tax total even as housing price fall.

[an]

[quote=jpinpb][quote=AN]Could it possibly just mean that the majority of home owners bought their house long time ago, so they’ll still be hit w/ the increase, since their appraised value for tax purposes is way under the current value.[/quote]

Not even close to what it should be for those that bought in the ’70’s and ’80’s.[/quote]
I’m not debating whether the tax people pay for houses they bought in the 70s/80s is close to what it is at today’s market value. What I’m trying to say is if the majority of property tax payer own their house before 2003, the 2% increase in that majority will more than enough to offset the tax decrease of houses that were bought in 2004-2008. That’s why we’re seeing record property tax total even as housing price fall.

[an]

[quote=jpinpb][quote=AN]Could it possibly just mean that the majority of home owners bought their house long time ago, so they’ll still be hit w/ the increase, since their appraised value for tax purposes is way under the current value.[/quote]

Not even close to what it should be for those that bought in the ’70’s and ’80’s.[/quote]
I’m not debating whether the tax people pay for houses they bought in the 70s/80s is close to what it is at today’s market value. What I’m trying to say is if the majority of property tax payer own their house before 2003, the 2% increase in that majority will more than enough to offset the tax decrease of houses that were bought in 2004-2008. That’s why we’re seeing record property tax total even as housing price fall.

[Author]

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