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Why should we care about single family property taxes set at the time of purchase? People move, and sell, or pass away and their families then acquire the prop

Why should we care about single family property taxes set at the time of purchase? People move, and sell, or pass away and their families then acquire the property and must decide what to do. There’s a reasonable question to discuss about prop 13 passing from parents to children, but in general property turnover on single family homes in the US are 5-7 years. Focusing on this part of prop 13 is almost intended to cause people to fight each other rather than the real problem. Corporations don’t pass away. Even when they are acquired by other corporations, they try to block reassessment of property. I can’t at the moment find what happened with the taxes after all of the bank acquisitions in 2008, but I do remember them fighting any increases based on the fact that the property did not change hands. There are other corporate properties in CA that also have never increased their tax bill, such as Disneyland. So as we consider removing prop 13 protections from corporations in 2020, let’s remember that corporations don’t die, but people (sadly) on the other hand do. Any correction in the market of taxes on your home is setup almost exactly the way we want. People on a fixed income don’t need to worry about paying more, while people benefiting from the current economy can.

minitoar 7y ago
What are the property turn over rates like in Santa Clara county, though? Does your source have granular information like that?
- bluejekyll 7y ago
  Every time I’ve looked at averages on this, CA is about the same as the rest of the US. As to that granular of data, I don’t know. I bet the realtors association in that area has those numbers though (as do Zillow and others).
- gnopgnip 7y ago
  Even in santa clara, residential property changes hands more often, and residential property owners pay an outsized portion of the overall tax burden tham commercial property.
gnopgnip 7y ago
There is a bill on the ballot to do that for non agricultural property, with some other exemptions for small businesses
jedberg 7y ago
I pay 20 times what my neighbor pays, and the other neighbor pays 40 times as much, for the same services. How is this remotely fair? Even worse, I can find you homes in California that are valued over $4MM that are paying less than $1000/yr in property tax (buying that property new would be about $50,000/yr). How is this fair?
- mikeyouse 7y ago
  I recently visited a friend of a friend on “Billionaires Row” on Pacific near Lyon. They are extraordinarily wealthy aside from their magnificent home and could easily afford the “correct” property taxes but since the home has been passed down for generations, they’re paying taxes on an assessed value that’s probably 1/50th of what it’s really worth. Just absolute madness that we subsidize ~hundred millionaires to the tune of $50k/year. It creates a literal landed gentry.
  - dartdartdart 7y ago
    These people know it's wrong but still won't reassess because there are incentives not to. Greed is a hell of a human trait
- remote_phone 7y ago
  The only time you should look at your neighbors plate is to see if they have enough. Otherwise be thankful that Prop 13 will protect you as you get older. I don’t care that some of my neighbors are paying 1/20 what I am paying in taxes. They have lived in the same home for 25 years, they deserve it. I would not want to get kicked out of my house because I couldn’t afford the property taxes, that would be unfair. And one other thing that you don’t mention is that property taxes get reset if you make upgrades to your house. If someone lives in the same home and makes no upgrades then good for them, it means they can’t afford to move so leave them alone.
  - mikeyouse 7y ago
    Just to be clear, while they’re avoiding property tax increases, they’re banking massive unrealized capital gains (which will also be passed through untaxed when the property is bequeathed to their children). Prop13 + stepped up basis in capital gains means that we’ve legislated inequality and in many cases racial inequality since only white families could buy property in the wealthier enclaves of California.
dragonwriter 7y ago
> I can’t at the moment find what happened with the taxes after all of the bank acquisitions in 2008 Taxes dropped because property values had dropped precipitously (for properties that didn't experience the damage that often accompanied foreclosure, dropping 50% by the trough of the crisis from the preceding peak only a couple years before wasn't unheard of in some areas), and where properties had changed hands, the new (often bank and other corporate) owners locked in the new rates as their baseline. (People who stayed in their home be benefited from the short term drop, but didn't reset their baseline, so could come back up to the maximum based on the pruchase price and maximum annual rate of increase when values went back up.)
- bluejekyll 7y ago
  Sorry I wasn’t clear. I was referring to the the bank corporate property acquired from the banks they purchased, not the foreclosed single family residences.
joe_the_user 7y ago
Why should we care about single family property taxes set at the time of purchase? Proposition 13 substantially lowers the ability of municipal governments to finance themselves. I recall the city of San Jose had to declare bankruptcy a while back (but I recalled incorrectly and they were just "on the verge") and the situation generally hobbles municipal government. Moreover, note being able to turn to property taxes, municipal governments have to turn to other sources of incomes, most of which undesirable incentives for the residents. Where I live now, Nevada County, building permits run $30K and higher. This decreases the supply of new houses substantially, worsening the housing crisis here and basically across California. General turnover may be 5-7 years but a given city doesn't get general turnover, they get people sitting on their houses 'cause they can. So basically, I think we should care about the perverse situation created by Prop 13 and indeed think about repealing it. California's horrible situation is at least getting people thinking. And corporations dodging taxes? kind of what-about-ism/thread-derail, huh? I'm against that too but come on.
- dragonwriter 7y ago
  > I recall the city of San Jose had to declare bankruptcy a while back When? I can find no references to this ever having occurred, though I can find early 2010s references to fears that it might occur in the (then-)near future, and some later articles contrasting San Jose which did not go bankrupt with Detroit which did.
  - joe_the_user 7y ago
    Sorry, I guess I misremembered the "about to go bankrupt" part.
    - redis_mlc 7y ago
      You weren't far off. All California cities will go bankrupt because of 8% public pensions in a matter of years. (This is well-documented.) San Jose came close to already bankrupting itself on the new airport terminal, but an out-of-state airport construction consultant saved a billion dollars. (See the excellent Mercury News article.) One mayor did a half-hearted attempt to fight the 8%, but "died on that hill." Mountain View is one of the few cities in a good place, as 1/3 of their revenue comes from renting the business park they own across Central from downtown. Unless they bury Castro, which is estimated at $1 billion or so. I'm curious what happens to Santa Clara City. Only 10,000 residents, but they're on the hook for the $1.2 billion stadium they built for the Yorke family, who live in Oakland. lol. :)

minitoar 7y ago

What are the property turn over rates like in Santa Clara county, though? Does your source have granular information like that?

bluejekyll 7y ago
Every time I’ve looked at averages on this, CA is about the same as the rest of the US. As to that granular of data, I don’t know. I bet the realtors association in that area has those numbers though (as do Zillow and others).
gnopgnip 7y ago
Even in santa clara, residential property changes hands more often, and residential property owners pay an outsized portion of the overall tax burden tham commercial property.

gnopgnip 7y ago

There is a bill on the ballot to do that for non agricultural property, with some other exemptions for small businesses

jedberg 7y ago

I pay 20 times what my neighbor pays, and the other neighbor pays 40 times as much, for the same services. How is this remotely fair? Even worse, I can find you homes in California that are valued over $4MM that are paying less than $1000/yr in property tax (buying that property new would be about $50,000/yr). How is this fair?

mikeyouse 7y ago
I recently visited a friend of a friend on “Billionaires Row” on Pacific near Lyon. They are extraordinarily wealthy aside from their magnificent home and could easily afford the “correct” property taxes but since the home has been passed down for generations, they’re paying taxes on an assessed value that’s probably 1/50th of what it’s really worth. Just absolute madness that we subsidize ~hundred millionaires to the tune of $50k/year. It creates a literal landed gentry.
- dartdartdart 7y ago
  These people know it's wrong but still won't reassess because there are incentives not to. Greed is a hell of a human trait
remote_phone 7y ago
The only time you should look at your neighbors plate is to see if they have enough. Otherwise be thankful that Prop 13 will protect you as you get older. I don’t care that some of my neighbors are paying 1/20 what I am paying in taxes. They have lived in the same home for 25 years, they deserve it. I would not want to get kicked out of my house because I couldn’t afford the property taxes, that would be unfair. And one other thing that you don’t mention is that property taxes get reset if you make upgrades to your house. If someone lives in the same home and makes no upgrades then good for them, it means they can’t afford to move so leave them alone.
- mikeyouse 7y ago
  Just to be clear, while they’re avoiding property tax increases, they’re banking massive unrealized capital gains (which will also be passed through untaxed when the property is bequeathed to their children). Prop13 + stepped up basis in capital gains means that we’ve legislated inequality and in many cases racial inequality since only white families could buy property in the wealthier enclaves of California.

dragonwriter 7y ago

> I can’t at the moment find what happened with the taxes after all of the bank acquisitions in 2008 Taxes dropped because property values had dropped precipitously (for properties that didn't experience the damage that often accompanied foreclosure, dropping 50% by the trough of the crisis from the preceding peak only a couple years before wasn't unheard of in some areas), and where properties had changed hands, the new (often bank and other corporate) owners locked in the new rates as their baseline. (People who stayed in their home be benefited from the short term drop, but didn't reset their baseline, so could come back up to the maximum based on the pruchase price and maximum annual rate of increase when values went back up.)

bluejekyll 7y ago
Sorry I wasn’t clear. I was referring to the the bank corporate property acquired from the banks they purchased, not the foreclosed single family residences.

joe_the_user 7y ago

Why should we care about single family property taxes set at the time of purchase? Proposition 13 substantially lowers the ability of municipal governments to finance themselves. I recall the city of San Jose had to declare bankruptcy a while back (but I recalled incorrectly and they were just "on the verge") and the situation generally hobbles municipal government. Moreover, note being able to turn to property taxes, municipal governments have to turn to other sources of incomes, most of which undesirable incentives for the residents. Where I live now, Nevada County, building permits run $30K and higher. This decreases the supply of new houses substantially, worsening the housing crisis here and basically across California. General turnover may be 5-7 years but a given city doesn't get general turnover, they get people sitting on their houses 'cause they can. So basically, I think we should care about the perverse situation created by Prop 13 and indeed think about repealing it. California's horrible situation is at least getting people thinking. And corporations dodging taxes? kind of what-about-ism/thread-derail, huh? I'm against that too but come on.

dragonwriter 7y ago
> I recall the city of San Jose had to declare bankruptcy a while back When? I can find no references to this ever having occurred, though I can find early 2010s references to fears that it might occur in the (then-)near future, and some later articles contrasting San Jose which did not go bankrupt with Detroit which did.
- joe_the_user 7y ago
  Sorry, I guess I misremembered the "about to go bankrupt" part.
  - redis_mlc 7y ago
    You weren't far off. All California cities will go bankrupt because of 8% public pensions in a matter of years. (This is well-documented.) San Jose came close to already bankrupting itself on the new airport terminal, but an out-of-state airport construction consultant saved a billion dollars. (See the excellent Mercury News article.) One mayor did a half-hearted attempt to fight the 8%, but "died on that hill." Mountain View is one of the few cities in a good place, as 1/3 of their revenue comes from renting the business park they own across Central from downtown. Unless they bury Castro, which is estimated at $1 billion or so. I'm curious what happens to Santa Clara City. Only 10,000 residents, but they're on the hook for the $1.2 billion stadium they built for the Yorke family, who live in Oakland. lol. :)