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The effect on the market is to make the market even less liquid than it would be since sales cost such huge benefits. Plus insulating existing homeowners from

The effect on the market is to make the market even less liquid than it would be since sales cost such huge benefits. Plus insulating existing homeowners from the rising market value of land is a tax on literally everyone that does NOT live there.

gnicholas 8y ago
Thanks for clarifying — I didn't realize what you meant by bubble chasing. I agree that Prop 13 can reduce available inventory and drive prices up. Though note that at age 55, you can move into a less-expensive home and keep your old property tax basis (if you meet certain restrictions). This provides somewhat of an escape valve that allows empty-nesters to downsize and new families to move in.
- mjevans 8y ago
  Someone from CA or who's more familiar with the actual Prop 13 should clarify, however from what I recall reading in prior threads... I believe the benefits can also be passed in some non-sale transfers of the property; IE passing it on to loved ones. So if something stays within the family those benefits are locked in at the old rate instead of hitting the new rate. Which while it sounds nice for handing off a property among married couples creates an entirely new class (literally) of people as land ownership flows through family generations.
  - gnicholas 8y ago
    I’m from California and am also a (former) tax lawyer. There is a limited ability to inherit property tax basis. It only applies to children (or grandchildren, if all children are deceased at the time of the grandparent’s death). It can’t be used to pass off property whenever you wish — only when you die. Given how long people generally live, this means that the people inheriting properties are usually already homeowners themselves, and in many cases already senior citizens.
  - pound 8y ago
    Transferring prop13 taxes when moving if someone is older than 55yo is very limited - should be within the same county and number of counties allowing it is 10 or 8 or something like that in CA. I may not remember exact details on that. Prop13 was expanded to allow transfer taxes between parents & children and grandparents & grandchildren. Also, commercial property is covered by prop13 too. Also, prop 13 is not limited to the primary residences. Also in many places schools are funded from property taxes, so all those complaints about horribly underfunded non-performing Californian schools have big "FU, got mine" from homeowners behind them.
    - gnicholas 8y ago
      Regarding property taxes being used to pay for schools, this is actually not as unfair as it might seem. That is, I pay much more than my next door neighbors, who have lived here for 30+ years. But I have school-aged kids, so I’m receiving more of a benefit from the local schools than they are.
      - pound 8y ago
        And in case if your other next-door neighbours have school-aged kids and have property taxes based on 30yo assessment? And in case if you don't have kids but pay way much more than your next door neighbours? Or in case if the majority of your neighbours pay almost nothing in taxes? Then your taxes alone will not cover the expenses of that local school for you to benefit from. Why have public schools then? Actually what I want to say is that there is nothing fair in Prop13.
        gnicholas 8y ago
        No one has 30-year old property tax assessments and kids in school. This would require inheriting from 80-year old grandparents and having your parents pre-decease your grandparents.
        pound 8y ago
        prop13 taxes can be passed to grandchildren "In 1986 and 1996 respectively, California voters passed Propositions 58 and 193, which extended Prop 13 to exclude from reassessment property transfers between parents and children (58) and grandparents and grandchildren (193). As a result, when you inherit a home in California, you inherit its tax assessment as well"

gnicholas 8y ago

Thanks for clarifying — I didn't realize what you meant by bubble chasing. I agree that Prop 13 can reduce available inventory and drive prices up. Though note that at age 55, you can move into a less-expensive home and keep your old property tax basis (if you meet certain restrictions). This provides somewhat of an escape valve that allows empty-nesters to downsize and new families to move in.

mjevans 8y ago
Someone from CA or who's more familiar with the actual Prop 13 should clarify, however from what I recall reading in prior threads... I believe the benefits can also be passed in some non-sale transfers of the property; IE passing it on to loved ones. So if something stays within the family those benefits are locked in at the old rate instead of hitting the new rate. Which while it sounds nice for handing off a property among married couples creates an entirely new class (literally) of people as land ownership flows through family generations.
- gnicholas 8y ago
  I’m from California and am also a (former) tax lawyer. There is a limited ability to inherit property tax basis. It only applies to children (or grandchildren, if all children are deceased at the time of the grandparent’s death). It can’t be used to pass off property whenever you wish — only when you die. Given how long people generally live, this means that the people inheriting properties are usually already homeowners themselves, and in many cases already senior citizens.
- pound 8y ago
  Transferring prop13 taxes when moving if someone is older than 55yo is very limited - should be within the same county and number of counties allowing it is 10 or 8 or something like that in CA. I may not remember exact details on that. Prop13 was expanded to allow transfer taxes between parents & children and grandparents & grandchildren. Also, commercial property is covered by prop13 too. Also, prop 13 is not limited to the primary residences. Also in many places schools are funded from property taxes, so all those complaints about horribly underfunded non-performing Californian schools have big "FU, got mine" from homeowners behind them.
  - gnicholas 8y ago
    Regarding property taxes being used to pay for schools, this is actually not as unfair as it might seem. That is, I pay much more than my next door neighbors, who have lived here for 30+ years. But I have school-aged kids, so I’m receiving more of a benefit from the local schools than they are.
    - pound 8y ago
      And in case if your other next-door neighbours have school-aged kids and have property taxes based on 30yo assessment? And in case if you don't have kids but pay way much more than your next door neighbours? Or in case if the majority of your neighbours pay almost nothing in taxes? Then your taxes alone will not cover the expenses of that local school for you to benefit from. Why have public schools then? Actually what I want to say is that there is nothing fair in Prop13.
      - gnicholas 8y ago
        No one has 30-year old property tax assessments and kids in school. This would require inheriting from 80-year old grandparents and having your parents pre-decease your grandparents.
        pound 8y ago
        prop13 taxes can be passed to grandchildren "In 1986 and 1996 respectively, California voters passed Propositions 58 and 193, which extended Prop 13 to exclude from reassessment property transfers between parents and children (58) and grandparents and grandchildren (193). As a result, when you inherit a home in California, you inherit its tax assessment as well"