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I wonder if you could combine that approach (having property owned by a company in a tax haven) with Prop-13 (in which property taxes grow very slowly if the pr

I wonder if you could combine that approach (having property owned by a company in a tax haven) with Prop-13 (in which property taxes grow very slowly if the property is not sold), and if anyone has ever done an assessment of how much property in California is owned by such entities.

google_censors 8y ago
FinCEN is doing that in the larger metropolitan areas but they aren't publishing the data. They've been looking into real estate money laundering in the US on a larger scale for the past couple of years.
toast0 8y ago
There's an exemption from reassessment if the California property is held in a real estate trust established by a financial institution, and the shares are sold. My understanding is that it's common for large commerical properties to be held in this fashion, such that they can be sold without triggering a reassessment. No tax haven required.
jeffwass 8y ago
London doesn’t have the annual property taxes on held real estate that exist in the USA. There is a one-off stamp duty at purchase time. But if you buy a property, you can hold it without further taxes. *there is something called council tax, but it’s usually minimal, eg £2k max in many outer London boroughs, and in he case of rentals paid directly by renters.
jiveturkey 8y ago
yes, that’s why a CA law was recently passed that when ownership of the real estate owning company changes hands, that is a) a change in ownership of the property and b) such changes must be reported to CA. unenforceable, eg there’s no way for CA to find out when foreign (non-CA owned) companies change hands, but at least the law is on the books.
- ghshephard 8y ago
  And, of course the trivial work around that is to have the ownership of the real-estate owning entity be yet another offshore series of organizations. That way the principal owners of the entity which has title property never change, but the beneficial shareholders of those entities can be transferred. Etc, etc... I.E. For a property on 4th avenue, the entity which owns it is Starfish Inc. The shareholders of Starfish Inc, are Corp1, Corp2, and Corp3. The property on 4th avenue is never sold, it is always owned by one owner - Starfish Inc. Likewise, Starfish Inc is never sold, it is always owned by Corp1, Corp2, and Corp3. Add as many levels of indirection and obfuscation in as many tax-free havens as it's worth to avoid having to pay additional property taxes. Only the shares in Corp1, Corp2, and Corp3 are transferred/sold to new parties.

google_censors 8y ago

FinCEN is doing that in the larger metropolitan areas but they aren't publishing the data. They've been looking into real estate money laundering in the US on a larger scale for the past couple of years.

toast0 8y ago

There's an exemption from reassessment if the California property is held in a real estate trust established by a financial institution, and the shares are sold. My understanding is that it's common for large commerical properties to be held in this fashion, such that they can be sold without triggering a reassessment. No tax haven required.

jeffwass 8y ago

London doesn’t have the annual property taxes on held real estate that exist in the USA. There is a one-off stamp duty at purchase time. But if you buy a property, you can hold it without further taxes. *there is something called council tax, but it’s usually minimal, eg £2k max in many outer London boroughs, and in he case of rentals paid directly by renters.

jiveturkey 8y ago

yes, that’s why a CA law was recently passed that when ownership of the real estate owning company changes hands, that is a) a change in ownership of the property and b) such changes must be reported to CA. unenforceable, eg there’s no way for CA to find out when foreign (non-CA owned) companies change hands, but at least the law is on the books.

ghshephard 8y ago
And, of course the trivial work around that is to have the ownership of the real-estate owning entity be yet another offshore series of organizations. That way the principal owners of the entity which has title property never change, but the beneficial shareholders of those entities can be transferred. Etc, etc... I.E. For a property on 4th avenue, the entity which owns it is Starfish Inc. The shareholders of Starfish Inc, are Corp1, Corp2, and Corp3. The property on 4th avenue is never sold, it is always owned by one owner - Starfish Inc. Likewise, Starfish Inc is never sold, it is always owned by Corp1, Corp2, and Corp3. Add as many levels of indirection and obfuscation in as many tax-free havens as it's worth to avoid having to pay additional property taxes. Only the shares in Corp1, Corp2, and Corp3 are transferred/sold to new parties.