[EconProf]

As usual when discussing taxes, lots of strong opinions pop up. A few observations:
1. Renters DO pay property taxes, they just pay indirectly through their rent. Landlords’ costs include them and, over time, increases or decreases in property taxes will be reflected in rent levels.
2. A fair criticism of Prop 13 is how it limited increases to 2% per year for people who did not sell. This was more relevant during periods of rapid house price gains; less of a factor now. Besides, how common is that rare bird who has not moved since 1978?
3. The property tax is the closest we have to a wealth tax, although the correlation is pretty weak. The other two major categories tax consumption and income. I’d argue we need all three to some degree. A tax that depends on the value of one’s property is somewhat justified by the fact that that owner benefits from the local police, fire, streets, etc. and that benefit is greater the more valuable the property.

[EconProf]

As usual when discussing taxes, lots of strong opinions pop up. A few observations:
1. Renters DO pay property taxes, they just pay indirectly through their rent. Landlords’ costs include them and, over time, increases or decreases in property taxes will be reflected in rent levels.
2. A fair criticism of Prop 13 is how it limited increases to 2% per year for people who did not sell. This was more relevant during periods of rapid house price gains; less of a factor now. Besides, how common is that rare bird who has not moved since 1978?
3. The property tax is the closest we have to a wealth tax, although the correlation is pretty weak. The other two major categories tax consumption and income. I’d argue we need all three to some degree. A tax that depends on the value of one’s property is somewhat justified by the fact that that owner benefits from the local police, fire, streets, etc. and that benefit is greater the more valuable the property.

[EconProf]

As usual when discussing taxes, lots of strong opinions pop up. A few observations:
1. Renters DO pay property taxes, they just pay indirectly through their rent. Landlords’ costs include them and, over time, increases or decreases in property taxes will be reflected in rent levels.
2. A fair criticism of Prop 13 is how it limited increases to 2% per year for people who did not sell. This was more relevant during periods of rapid house price gains; less of a factor now. Besides, how common is that rare bird who has not moved since 1978?
3. The property tax is the closest we have to a wealth tax, although the correlation is pretty weak. The other two major categories tax consumption and income. I’d argue we need all three to some degree. A tax that depends on the value of one’s property is somewhat justified by the fact that that owner benefits from the local police, fire, streets, etc. and that benefit is greater the more valuable the property.

[EconProf]

As usual when discussing taxes, lots of strong opinions pop up. A few observations:
1. Renters DO pay property taxes, they just pay indirectly through their rent. Landlords’ costs include them and, over time, increases or decreases in property taxes will be reflected in rent levels.
2. A fair criticism of Prop 13 is how it limited increases to 2% per year for people who did not sell. This was more relevant during periods of rapid house price gains; less of a factor now. Besides, how common is that rare bird who has not moved since 1978?
3. The property tax is the closest we have to a wealth tax, although the correlation is pretty weak. The other two major categories tax consumption and income. I’d argue we need all three to some degree. A tax that depends on the value of one’s property is somewhat justified by the fact that that owner benefits from the local police, fire, streets, etc. and that benefit is greater the more valuable the property.

[EconProf]

urbanrealtor:
Google “property taxes by state per capita” and you will find CA ranks 27th, thus placing us about in the middle for this particular tax. Not sure whether illegals are included in the per capita calculation, but doubt it would much change the outcome.
We are 10th in total state per capita spending among states. That’s not lean.
The best measure of tax burden is all state and local taxes paid per personal income. CA ranks 6th using this overall indicator.
The figures are worse if you include the tax hikes coming due to the looming deficit.
To answer your question, I taught economics for 23 years, mostly at SDSU, and left the field to invest in real estate. But I claim no special expertise–anyone can look up these facts.

[EconProf]

urbanrealtor:
Google “property taxes by state per capita” and you will find CA ranks 27th, thus placing us about in the middle for this particular tax. Not sure whether illegals are included in the per capita calculation, but doubt it would much change the outcome.
We are 10th in total state per capita spending among states. That’s not lean.
The best measure of tax burden is all state and local taxes paid per personal income. CA ranks 6th using this overall indicator.
The figures are worse if you include the tax hikes coming due to the looming deficit.
To answer your question, I taught economics for 23 years, mostly at SDSU, and left the field to invest in real estate. But I claim no special expertise–anyone can look up these facts.

[EconProf]

urbanrealtor:
Google “property taxes by state per capita” and you will find CA ranks 27th, thus placing us about in the middle for this particular tax. Not sure whether illegals are included in the per capita calculation, but doubt it would much change the outcome.
We are 10th in total state per capita spending among states. That’s not lean.
The best measure of tax burden is all state and local taxes paid per personal income. CA ranks 6th using this overall indicator.
The figures are worse if you include the tax hikes coming due to the looming deficit.
To answer your question, I taught economics for 23 years, mostly at SDSU, and left the field to invest in real estate. But I claim no special expertise–anyone can look up these facts.

[EconProf]

urbanrealtor:
Google “property taxes by state per capita” and you will find CA ranks 27th, thus placing us about in the middle for this particular tax. Not sure whether illegals are included in the per capita calculation, but doubt it would much change the outcome.
We are 10th in total state per capita spending among states. That’s not lean.
The best measure of tax burden is all state and local taxes paid per personal income. CA ranks 6th using this overall indicator.
The figures are worse if you include the tax hikes coming due to the looming deficit.
To answer your question, I taught economics for 23 years, mostly at SDSU, and left the field to invest in real estate. But I claim no special expertise–anyone can look up these facts.

[EconProf]

urbanrealtor:
Google “property taxes by state per capita” and you will find CA ranks 27th, thus placing us about in the middle for this particular tax. Not sure whether illegals are included in the per capita calculation, but doubt it would much change the outcome.
We are 10th in total state per capita spending among states. That’s not lean.
The best measure of tax burden is all state and local taxes paid per personal income. CA ranks 6th using this overall indicator.
The figures are worse if you include the tax hikes coming due to the looming deficit.
To answer your question, I taught economics for 23 years, mostly at SDSU, and left the field to invest in real estate. But I claim no special expertise–anyone can look up these facts.

[EconProf]

Hibiscus: It is most unlikely you are paying 20 times what your neighbor is paying.
Proposition 13, passed overwhelmingly in 1978, limited property taxes to 1% of value and no more than a 2% increase per year. It has been watered down over the years to allow the 1% to increase to about 1.2 or 1.25% in many areas by voter-approved bonded debt.
So your neighbor has likely had a 2% increase per year if he owned the same property in 1978. That is over 32 years so with compounding his tax has more than doubled, including the bonded debt portion. Prop 13 is indeed a boon to long-time owners and yes, some would call that unfair.
But CA is not starved for revenues due to Prop 13. Since it passed total property tax revenues are up by a factor of eight, due to assessed value increases, more property, more people, etc.
CA government spending has far outpaced the growth in population plus inflation. CA does not have a revenue problem. CA has a spending problem.

[EconProf]

Hibiscus: It is most unlikely you are paying 20 times what your neighbor is paying.
Proposition 13, passed overwhelmingly in 1978, limited property taxes to 1% of value and no more than a 2% increase per year. It has been watered down over the years to allow the 1% to increase to about 1.2 or 1.25% in many areas by voter-approved bonded debt.
So your neighbor has likely had a 2% increase per year if he owned the same property in 1978. That is over 32 years so with compounding his tax has more than doubled, including the bonded debt portion. Prop 13 is indeed a boon to long-time owners and yes, some would call that unfair.
But CA is not starved for revenues due to Prop 13. Since it passed total property tax revenues are up by a factor of eight, due to assessed value increases, more property, more people, etc.
CA government spending has far outpaced the growth in population plus inflation. CA does not have a revenue problem. CA has a spending problem.

[EconProf]

Hibiscus: It is most unlikely you are paying 20 times what your neighbor is paying.
Proposition 13, passed overwhelmingly in 1978, limited property taxes to 1% of value and no more than a 2% increase per year. It has been watered down over the years to allow the 1% to increase to about 1.2 or 1.25% in many areas by voter-approved bonded debt.
So your neighbor has likely had a 2% increase per year if he owned the same property in 1978. That is over 32 years so with compounding his tax has more than doubled, including the bonded debt portion. Prop 13 is indeed a boon to long-time owners and yes, some would call that unfair.
But CA is not starved for revenues due to Prop 13. Since it passed total property tax revenues are up by a factor of eight, due to assessed value increases, more property, more people, etc.
CA government spending has far outpaced the growth in population plus inflation. CA does not have a revenue problem. CA has a spending problem.

[EconProf]

Hibiscus: It is most unlikely you are paying 20 times what your neighbor is paying.
Proposition 13, passed overwhelmingly in 1978, limited property taxes to 1% of value and no more than a 2% increase per year. It has been watered down over the years to allow the 1% to increase to about 1.2 or 1.25% in many areas by voter-approved bonded debt.
So your neighbor has likely had a 2% increase per year if he owned the same property in 1978. That is over 32 years so with compounding his tax has more than doubled, including the bonded debt portion. Prop 13 is indeed a boon to long-time owners and yes, some would call that unfair.
But CA is not starved for revenues due to Prop 13. Since it passed total property tax revenues are up by a factor of eight, due to assessed value increases, more property, more people, etc.
CA government spending has far outpaced the growth in population plus inflation. CA does not have a revenue problem. CA has a spending problem.

[EconProf]

Hibiscus: It is most unlikely you are paying 20 times what your neighbor is paying.
Proposition 13, passed overwhelmingly in 1978, limited property taxes to 1% of value and no more than a 2% increase per year. It has been watered down over the years to allow the 1% to increase to about 1.2 or 1.25% in many areas by voter-approved bonded debt.
So your neighbor has likely had a 2% increase per year if he owned the same property in 1978. That is over 32 years so with compounding his tax has more than doubled, including the bonded debt portion. Prop 13 is indeed a boon to long-time owners and yes, some would call that unfair.
But CA is not starved for revenues due to Prop 13. Since it passed total property tax revenues are up by a factor of eight, due to assessed value increases, more property, more people, etc.
CA government spending has far outpaced the growth in population plus inflation. CA does not have a revenue problem. CA has a spending problem.

[EconProf]

Not sure what you are proposing here, with two attorneys. Does that mean one on each side? That works out to two deal killers moving the transaction along. Most attorneys don’t know enough about the intricacies of RE, unless that is all they do.
Real estate agents of course vary widely in quality. To have a good one working only for you is almost always worthwhile. They insert themselves as middlemen in a complicated, lengthy transaction that is filled with landmines. They keep the two warring sides apart in what is essentially a zero-sum game. They move the transaction along and coordinate deadlines, other parties, and necessary paperwork. Good agents earn their money.
BTW, I would not use a friend as an agent–you can’t ream them out if they screw up.

[Author]

Posts