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What about retired people? A friend's single mom paid off her house 35 years ago in a relatively poor neighborhood in southern California. She worked as many jo

by faster 11y ago

What about retired people? A friend's single mom paid off her house 35 years ago in a relatively poor neighborhood in southern California. She worked as many jobs as she could to do that, all would be considered menial today; laundry, sewing, cleaning houses. That area is now expensive enough that even with Prop 13 her children have to pay her property taxes for her. Her family, friends, church, etc. are all there, so it's not a trivial thing for her to move someplace cheaper (which would be at least 50 miles away, not a reasonable bus ride in that area).

slyall 11y ago
1. After a hard life she is now a millionaire 2. Assuming she is living almost alone she probably doesn't want a [big] house and could move into a smaller unit nearby (and have some money left over) 3. But, there probably are not any smaller units since zoning effectively blocked them being built.
- simoncion 11y ago
  I'm never in favor of a solution that kicks homeowners who use their property as a home out of their homes. However, as you say, this mom is a millionaire. If she can deal with a change in location, she stands to make a metric shitload of money.
_delirium 11y ago
I prefer Texas's solution to that problem, which given my leftish politics, doesn't happen that often. :) In Texas, people over 65 can stop paying property taxes entirely, but the taxes are not waived, instead they're just deferred and accrue as a lien on the home. When the home is eventually sold (either by them, or their heirs), the taxes are paid out of the proceeds (the state eats the remainder if the proceeds are less than the back taxes). This way a retired person never has to move because of an increase in the value of their property making the taxes unaffordable. But if and when it's sold, and they actually realize that gain from the property's value, at that point they do have to pay the taxes. Proposition 13 instead lets them have their cake and eat it too: they pay property taxes as if there were no value increase, but then can sell the property and get a big windfall.
- simoncion 11y ago
  I really like that solution.
simoncion 11y ago
> That area is now expensive enough that even with Prop 13 her children have to pay her property taxes for her. I'm not sure I believe that. As I understand it, Prop 13 caps property tax increases on a given property to a maximum ~2% per year. [0] Your property's value is not reassessed, no matter what happens to other properties in the area! The only way for a property to be reassessed (and -thus- for its tax to dramatically increase-) is for it to change hands, or for major improvements to be performed to the property. Even in the case of major improvements, the value of just the improvement is assessed and added to the value of the property as a whole. The unimproved portion of the property is not reassessed. Am I dramatically misunderstanding something about Prop 13? Or were you saying "The cost of living at this mom's place is now so high that she can't even afford to pay the Prop 13-suppressed property tax on her property."? [0] Inflation is generally understood to be ~3% per year, and has been for at least a decade... so this means that property taxes increase at a rate that is lower than inflation.
ghshephard 11y ago
Better approach, from British Columbia, is after 65 (or some age), you can defer 100% of your property taxes on your principal residence, subject to certain income/wealth tests - they just become a lien against the property.

by faster 11y ago

slyall 11y ago

1. After a hard life she is now a millionaire 2. Assuming she is living almost alone she probably doesn't want a [big] house and could move into a smaller unit nearby (and have some money left over) 3. But, there probably are not any smaller units since zoning effectively blocked them being built.

simoncion 11y ago
I'm never in favor of a solution that kicks homeowners who use their property as a home out of their homes. However, as you say, this mom is a millionaire. If she can deal with a change in location, she stands to make a metric shitload of money.

_delirium 11y ago

I prefer Texas's solution to that problem, which given my leftish politics, doesn't happen that often. :) In Texas, people over 65 can stop paying property taxes entirely, but the taxes are not waived, instead they're just deferred and accrue as a lien on the home. When the home is eventually sold (either by them, or their heirs), the taxes are paid out of the proceeds (the state eats the remainder if the proceeds are less than the back taxes). This way a retired person never has to move because of an increase in the value of their property making the taxes unaffordable. But if and when it's sold, and they actually realize that gain from the property's value, at that point they do have to pay the taxes. Proposition 13 instead lets them have their cake and eat it too: they pay property taxes as if there were no value increase, but then can sell the property and get a big windfall.

simoncion 11y ago
I really like that solution.

simoncion 11y ago

> That area is now expensive enough that even with Prop 13 her children have to pay her property taxes for her. I'm not sure I believe that. As I understand it, Prop 13 caps property tax increases on a given property to a maximum ~2% per year. [0] Your property's value is not reassessed, no matter what happens to other properties in the area! The only way for a property to be reassessed (and -thus- for its tax to dramatically increase-) is for it to change hands, or for major improvements to be performed to the property. Even in the case of major improvements, the value of just the improvement is assessed and added to the value of the property as a whole. The unimproved portion of the property is not reassessed. Am I dramatically misunderstanding something about Prop 13? Or were you saying "The cost of living at this mom's place is now so high that she can't even afford to pay the Prop 13-suppressed property tax on her property."? [0] Inflation is generally understood to be ~3% per year, and has been for at least a decade... so this means that property taxes increase at a rate that is lower than inflation.

ghshephard 11y ago

Better approach, from British Columbia, is after 65 (or some age), you can defer 100% of your property taxes on your principal residence, subject to certain income/wealth tests - they just become a lien against the property.