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Whoa! Didn't even know about Prop 13 - that basically means no house can currently have a higher taxable value than basically double what it was worth in 1978.

Whoa! Didn't even know about Prop 13 - that basically means no house can currently have a higher taxable value than basically double what it was worth in 1978. Insane!

0xffff2 7y ago
Huh? I think you're mis-reading something. Your assertion is true only for houses that haven't changed hands since 1978. In most cases, the buyer of a house is assessed taxes on the market value of the house at the time of sale, and further increases are limited from there.
- mifreewil 7y ago
  This is true but it’s insane that California allows children to inherit the lower tax basis: https://www.latimes.com/politics/la-pol-ca-california-property-taxes-elites-201808-htmlstory.html https://www.latimes.com/politics/la-pol-ca-california-proper...
  - 0xffff2 7y ago
    Yes, "in most cases" was my hedge around the various ways in which property can be transferred while keeping its tax status. The majority of prop 13 is insane IMO. If I had to pick a single thing to change, I'd much rather stop applying it to commercial property than remove the inheritance provision.
    - mifreewil 7y ago
      Yeah, commercial property makes no sense either, especially if you consider the original intent of the law, but it bothers me less than residences as at least those properties, in theory, are doing something productive for society.
      - nitrogen 7y ago
        Long-term residents are also doing something productive for society -- they are providing stable communities around which longer-term plans can be made, in which cultural memory of e.g. local climatological risks can be preserved, etc. Housing is definitely way too expensive in the bay area, but calling existing residents "unproductive" is pretty astonishingly, callously, selfishly offensive.
        mifreewil 7y ago
        Residences, not residents. Buildings, not people.
        fountainofage 7y ago
        Eh, I'd say I've met quite a lot of long-term residents of San Francisco. Pretty much no correlation between ownership and how worthless that person is to the community. I know renters with their 30-year lease that don't even live here anymore. I know homeowners with their 30-year old property tax assessment that also don't even live here anymore. Both just pop in every now and then to enjoy the Bay Area for cheap and then let the home sit vacant the other 300+ days of the year. I also know renters and owners that have been very active in their local communities. If the metric you care about is "societal productivity" there are better ways to measure and reward that than based on "how long have you owned here."
pkaye 7y ago
The property tax rate is capped at 1% (plus some small extra.) The property value is reassessed with change of ownership. Yearly increases in assessed value are limited to no more than 2%.
pascalxus 7y ago
It's worse than that. Those people with the very most equity gains, are paying the least taxes relative to their house value. Those with the least equity gain (like recent buyers), are paying the very highest taxes relative to their house. It's basically like saying the person who earned over 1 million dollars in equity gain pays far less taxes than the one who earned 10k in equity gain. It's extremely regressive. And, since home owners are incentivized to stay in the houses that they bought a long time ago (whether or not it's convenient for them or not), it means there's far less housing turnover, less supply and less opportunities for everyone, and longer commutes which is terrible for the environment. It's a disaster.
- rsmckinney 7y ago
  Shhh. Don’t wake the two elephants in the room from India and China. They represent the primary cause for real estate inflation in the Bay Area.
  - dang 7y ago
    Would you please stop posting flamebait here? We've asked you more than once already. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
    - rsmckinney 7y ago
      One man’s “flame bait” is another man’s truth.
fortran77 7y ago
No. Every time a house changes owners, it can be re-assessed at current rates.
jyounker 7y ago
It gets even better. Because commercial property taxes are so low, the state is forced to rely more on income and sales taxes. Unfortunately these taxes source are affected much more by recessions. Things go to crap, and the state's coffers empty out. Welcome to why California has budget problems in recessions!

Whoa! Didn't even know about Prop 13 - that basically means no house can currently have a higher taxable value than basically double what it was worth in 1978. Insane!

0xffff2 7y ago

Huh? I think you're mis-reading something. Your assertion is true only for houses that haven't changed hands since 1978. In most cases, the buyer of a house is assessed taxes on the market value of the house at the time of sale, and further increases are limited from there.

mifreewil 7y ago
This is true but it’s insane that California allows children to inherit the lower tax basis: https://www.latimes.com/politics/la-pol-ca-california-property-taxes-elites-201808-htmlstory.html https://www.latimes.com/politics/la-pol-ca-california-proper...
- 0xffff2 7y ago
  Yes, "in most cases" was my hedge around the various ways in which property can be transferred while keeping its tax status. The majority of prop 13 is insane IMO. If I had to pick a single thing to change, I'd much rather stop applying it to commercial property than remove the inheritance provision.
  - mifreewil 7y ago
    Yeah, commercial property makes no sense either, especially if you consider the original intent of the law, but it bothers me less than residences as at least those properties, in theory, are doing something productive for society.
    - nitrogen 7y ago
      Long-term residents are also doing something productive for society -- they are providing stable communities around which longer-term plans can be made, in which cultural memory of e.g. local climatological risks can be preserved, etc. Housing is definitely way too expensive in the bay area, but calling existing residents "unproductive" is pretty astonishingly, callously, selfishly offensive.
      - mifreewil 7y ago
        Residences, not residents. Buildings, not people.
      - fountainofage 7y ago
        Eh, I'd say I've met quite a lot of long-term residents of San Francisco. Pretty much no correlation between ownership and how worthless that person is to the community. I know renters with their 30-year lease that don't even live here anymore. I know homeowners with their 30-year old property tax assessment that also don't even live here anymore. Both just pop in every now and then to enjoy the Bay Area for cheap and then let the home sit vacant the other 300+ days of the year. I also know renters and owners that have been very active in their local communities. If the metric you care about is "societal productivity" there are better ways to measure and reward that than based on "how long have you owned here."

pkaye 7y ago

The property tax rate is capped at 1% (plus some small extra.) The property value is reassessed with change of ownership. Yearly increases in assessed value are limited to no more than 2%.

pascalxus 7y ago

It's worse than that. Those people with the very most equity gains, are paying the least taxes relative to their house value. Those with the least equity gain (like recent buyers), are paying the very highest taxes relative to their house. It's basically like saying the person who earned over 1 million dollars in equity gain pays far less taxes than the one who earned 10k in equity gain. It's extremely regressive. And, since home owners are incentivized to stay in the houses that they bought a long time ago (whether or not it's convenient for them or not), it means there's far less housing turnover, less supply and less opportunities for everyone, and longer commutes which is terrible for the environment. It's a disaster.

rsmckinney 7y ago
Shhh. Don’t wake the two elephants in the room from India and China. They represent the primary cause for real estate inflation in the Bay Area.
- dang 7y ago
  Would you please stop posting flamebait here? We've asked you more than once already. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
  - rsmckinney 7y ago
    One man’s “flame bait” is another man’s truth.

fortran77 7y ago

No. Every time a house changes owners, it can be re-assessed at current rates.

jyounker 7y ago

It gets even better. Because commercial property taxes are so low, the state is forced to rely more on income and sales taxes. Unfortunately these taxes source are affected much more by recessions. Things go to crap, and the state's coffers empty out. Welcome to why California has budget problems in recessions!