> A tax lien is a public record. Banks will subtract the amount of outstanding liens against the property (even if not yet due) from its estimated value before

> A tax lien is a public record. Banks will subtract the amount of outstanding liens against the property (even if not yet due) from its estimated value before deciding how much to loan against it. Yes, the amount will be smaller than it was. Fair enough, though lots of people have ended up underwater because the banks gave them larger HELOCs than was wise. None of this makes your proposal good, though. At best it magnifies the biggest problem with Prop 13, namely that it encourages owners to hold indefinitely (either as a primary or rental residence) rather than lose the tax benefits. Making a sale suddenly incur an additional massive tax burden will not encourage market liquidity. Nor will it encourage new housing construction in any meaningful way. > You need to look at some actual numbers. You need to look at what I was replying to. This was in response to your proposal that the maximum tax lien be capped at the difference between purchase and sale price. You were literally discussing the situation where the owner will walk away with zero dollars (negative, actually, due to closing costs).