5 ms·

One thing that always bothers me is how it is framed as something for the rich. Yes the rich do benefit, however prop 13 also does a lot of good for old people

by ravar 8y ago

One thing that always bothers me is how it is framed as something for the rich. Yes the rich do benefit, however prop 13 also does a lot of good for old people who live off a fixed income. My grandparents are really poor, in terms of savings and assets, and often times get help from my family. If it weren't for prop 13 they would have had to leave California a long time ago, and move away from all their family. I know that in other states , like New Jersey, the property taxes can cause a lot of stress for older people who live off fixed incomes. I am not entirely sure about the actual value for prop 13 for the entire state. But prop 13 does provide a lot of value for older people and that can't be ignored.

zrail 8y ago
You could preserve the value for "old people", as you say, by removing the caps for property held by businesses (similar to homestead in other states, I don't know if CA has homestead) and treating inheritance as a purchase for purposes of property tax reassessment.
- toast0 8y ago
  California has a homestead exemption of about $7000 of assessed value; or about $70 savings annually. I don't think this gets adjusted ever, or if it was ever a meaningful amount. It's also tied into a renter's income tax credit, so I suspect it's fairly difficult to change. My opinion is that Prop 13 provides useful planning benefits to property owners and municipalities, and the rate of increase could be adjusted to still give those benefits, without having quite the same distortion. 5% annual assessment increase cap would probably be much too high, but 3% or 4% might be enough to stay within throwing distance of current values. As a soon to be former CA property owner it was nice to be able to know for sure my taxes would basically grow at 2% once prices started climt. Municipalities could count on property tax revenues staying flat or even continuing to grow during the housing market collapse because so many owners had their assessments constrained, and many of the sellers had assessments below even the depressed market value. Having constrained assessments also reduces the burden of assessment appeals, which I've heard is significant in locales without constraints.
yonran 8y ago
A proper tax relief program for the elderly would actually target the elderly, as many states do. Proposition 13 does not target the elderly. It gives tax breaks to all property investors, including corporations and (due to Proposition 58) inherited estates.
- ryandrake 8y ago
  It effectively targets the elderly because its benefits go disproportionately to people who bought homes many decades ago, in other words, the elderly. Another way to determine who it targets is to suggest repealing it and watch who complains the loudest.
  - yonran 8y ago
    Yes, the limit on increase of assessed value helps the elderly. All the other property investors (such as grandchildren and corporations) are just happy to reap the benefits. In other words, the design does not target the elderly.
    - anoncoward111 8y ago
      This is the correct answer. The effect is as follows, currently: 1) Elderly who bought early pay low tax, elderly who bought recently pay high tax 2) Younger people who are also rich pay high tax, but can afford it, and it is proportional to the amount of services they are receiving 3) Younger people who cant afford these property taxes are priced out of the area.
  - GiraffeGlove 8y ago
    It only round-about targets the elderly because most of them happened to buy their property many years ago - however without targeting the elderly with fixed incomes directly there is no phaseout either - thus the wealthy and inheritors of property can continue to pay those low property taxes while shifting the burden onto new buyers and pricing out many who are looking to buy.
- wahern 8y ago
odorousrex 8y ago
My parents are in this boat. I feel like a clean repeal of Prop 13, while it would be good for California overall, just isn't possible. What I would like to see is: -Prop 13 applies applies to only your lived in primary residence. This applies to new buyers as well. -Commercial and Investment properties have a 10 year sunset clause. That is to say property taxes go up to market rate over a 10 year period. (i.e. first year you're paying 10% more...then 20%...etc) up until year 10 I don't even think THAT is politically feasible here though, and I'm a home owner.
- ryandrake 8y ago
  I’ve lived places with homestead exemptions and it seems like a good compromise. As it stands today, Prop13 is essentially a wealth transfer from new homeowners to old ones.
  - atomi 8y ago
    People who bought homes now will pay fewer taxes than the people buying 20 years later. I think the people who complain are mostly transplants who don't think it's "fair" that the citizens of California who've lived here generations don't have to pay the same taxes they do for some of the expensive homes and properties.
    - joejerryronnie 8y ago
      You're getting downvoted but you're absolutely right. Don't worry though, Prop 13 is untouchable and will never get repealed. It's ironic that most of the people complaining about Prop 13 driving housing prices up are oblivious to the fact that they, if not born in the bay area, are the sole reason for the astronomical housing price increases. Housing is expensive in the bay area for one reason, more people want to live here than there are houses available. How about addressing the real root cause and implementing a new resident tax? We can use the proceeds to pay for affordable housing initiatives.
    - toasterlovin 8y ago
      FWIW, I grew up in Los Angeles and had to move out of state in order to afford a family. This doesn’t just affect people from out of state.
runamok 8y ago
Pretty sure that is somewhat covered by this though perhaps since the value must remain the same it is less valuable: https://www.sfchronicle.com/business/networth/article/How-older-CA-homeowners-can-get-property-tax-6778070.php https://www.sfchronicle.com/business/networth/article/How-ol...
Kalium 8y ago
If you own a multi-million-dollar house, you are rich. Even if you are rich with a fixed income, you are still rich. Prop 13 is framed as something for the rich because it's for the rich and it's the rich who benefit.
- ravar 8y ago
  My grandparents definitely don't have a multi million dollar home. Not even a million dollar home. That doesn't stop property taxes from really causing them problems. As I said, they are quite poor.
  - Kalium 8y ago
    I know how painful that is. The place they've built their lives around, where all their hopes and dreams and memories reside. It's home. It's part of who they are. I empathize, and their pain is real. As awkward as it is, the purpose of property taxes is to keep land economically productive. These policies are needed to enable governments to provision services and at least slow down the hereditary growth of wealth. If you can't afford the house, that's the policies working as intended. It's time to sell and get something you can afford. Real pain, and the empathy and compassion that respond to it, do not always justify a change in public policy. Especially in a place like California, where we tend to enact that wonderful empathy and compassion as half-assed public policy that transfers wealth from the young to the older.
    - joejerryronnie 8y ago
      > It's time to sell and get something you can afford. If people are worried about high home and property tax prices, isn't it time for them to move to an area they can afford?
      - Kalium 8y ago
        Bluntly, yes.

by ravar 8y ago

zrail 8y ago

You could preserve the value for "old people", as you say, by removing the caps for property held by businesses (similar to homestead in other states, I don't know if CA has homestead) and treating inheritance as a purchase for purposes of property tax reassessment.

toast0 8y ago
California has a homestead exemption of about $7000 of assessed value; or about $70 savings annually. I don't think this gets adjusted ever, or if it was ever a meaningful amount. It's also tied into a renter's income tax credit, so I suspect it's fairly difficult to change. My opinion is that Prop 13 provides useful planning benefits to property owners and municipalities, and the rate of increase could be adjusted to still give those benefits, without having quite the same distortion. 5% annual assessment increase cap would probably be much too high, but 3% or 4% might be enough to stay within throwing distance of current values. As a soon to be former CA property owner it was nice to be able to know for sure my taxes would basically grow at 2% once prices started climt. Municipalities could count on property tax revenues staying flat or even continuing to grow during the housing market collapse because so many owners had their assessments constrained, and many of the sellers had assessments below even the depressed market value. Having constrained assessments also reduces the burden of assessment appeals, which I've heard is significant in locales without constraints.

yonran 8y ago

A proper tax relief program for the elderly would actually target the elderly, as many states do. Proposition 13 does not target the elderly. It gives tax breaks to all property investors, including corporations and (due to Proposition 58) inherited estates.

ryandrake 8y ago
It effectively targets the elderly because its benefits go disproportionately to people who bought homes many decades ago, in other words, the elderly. Another way to determine who it targets is to suggest repealing it and watch who complains the loudest.
- yonran 8y ago
  Yes, the limit on increase of assessed value helps the elderly. All the other property investors (such as grandchildren and corporations) are just happy to reap the benefits. In other words, the design does not target the elderly.
  - anoncoward111 8y ago
    This is the correct answer. The effect is as follows, currently: 1) Elderly who bought early pay low tax, elderly who bought recently pay high tax 2) Younger people who are also rich pay high tax, but can afford it, and it is proportional to the amount of services they are receiving 3) Younger people who cant afford these property taxes are priced out of the area.
- GiraffeGlove 8y ago
  It only round-about targets the elderly because most of them happened to buy their property many years ago - however without targeting the elderly with fixed incomes directly there is no phaseout either - thus the wealthy and inheritors of property can continue to pay those low property taxes while shifting the burden onto new buyers and pricing out many who are looking to buy.
wahern 8y ago

odorousrex 8y ago

My parents are in this boat. I feel like a clean repeal of Prop 13, while it would be good for California overall, just isn't possible. What I would like to see is: -Prop 13 applies applies to only your lived in primary residence. This applies to new buyers as well. -Commercial and Investment properties have a 10 year sunset clause. That is to say property taxes go up to market rate over a 10 year period. (i.e. first year you're paying 10% more...then 20%...etc) up until year 10 I don't even think THAT is politically feasible here though, and I'm a home owner.

ryandrake 8y ago
I’ve lived places with homestead exemptions and it seems like a good compromise. As it stands today, Prop13 is essentially a wealth transfer from new homeowners to old ones.
- atomi 8y ago
  People who bought homes now will pay fewer taxes than the people buying 20 years later. I think the people who complain are mostly transplants who don't think it's "fair" that the citizens of California who've lived here generations don't have to pay the same taxes they do for some of the expensive homes and properties.
  - joejerryronnie 8y ago
    You're getting downvoted but you're absolutely right. Don't worry though, Prop 13 is untouchable and will never get repealed. It's ironic that most of the people complaining about Prop 13 driving housing prices up are oblivious to the fact that they, if not born in the bay area, are the sole reason for the astronomical housing price increases. Housing is expensive in the bay area for one reason, more people want to live here than there are houses available. How about addressing the real root cause and implementing a new resident tax? We can use the proceeds to pay for affordable housing initiatives.
  - toasterlovin 8y ago
    FWIW, I grew up in Los Angeles and had to move out of state in order to afford a family. This doesn’t just affect people from out of state.

runamok 8y ago

Pretty sure that is somewhat covered by this though perhaps since the value must remain the same it is less valuable: https://www.sfchronicle.com/business/networth/article/How-older-CA-homeowners-can-get-property-tax-6778070.php https://www.sfchronicle.com/business/networth/article/How-ol...

Kalium 8y ago

If you own a multi-million-dollar house, you are rich. Even if you are rich with a fixed income, you are still rich. Prop 13 is framed as something for the rich because it's for the rich and it's the rich who benefit.

ravar 8y ago
My grandparents definitely don't have a multi million dollar home. Not even a million dollar home. That doesn't stop property taxes from really causing them problems. As I said, they are quite poor.
- Kalium 8y ago
  I know how painful that is. The place they've built their lives around, where all their hopes and dreams and memories reside. It's home. It's part of who they are. I empathize, and their pain is real. As awkward as it is, the purpose of property taxes is to keep land economically productive. These policies are needed to enable governments to provision services and at least slow down the hereditary growth of wealth. If you can't afford the house, that's the policies working as intended. It's time to sell and get something you can afford. Real pain, and the empathy and compassion that respond to it, do not always justify a change in public policy. Especially in a place like California, where we tend to enact that wonderful empathy and compassion as half-assed public policy that transfers wealth from the young to the older.
  - joejerryronnie 8y ago
    > It's time to sell and get something you can afford. If people are worried about high home and property tax prices, isn't it time for them to move to an area they can afford?
    - Kalium 8y ago
      Bluntly, yes.