10 ms·

That's great, but how can we undo the 100 years of segregation that this policy contributed to? Prop 13 makes it even worse by incentivizing the people who can

by Lammy 6y ago

That's great, but how can we undo the 100 years of segregation that this policy contributed to? Prop 13 makes it even worse by incentivizing the people who can afford homes to pass them down to their children, both enshrining the existing segregation and locking the disenfranchised out of that method of building generational wealth: http://www.radicalcartography.net/index.html?bayarea http://www.radicalcartography.net/index.html?bayarea

jedberg 6y ago
Luckily prop 19 will help solve this. As of I want to say last week, you can no longer keep the tax basis on an inherited property unless it becomes your primary residence upon inheritance. But I agree, Prop 13 definitely helps maintain generational wealth, but luckily much less so now.
- shuckles 6y ago
  My understanding is Prop 19 is can be evaded by trusts. Even without hiding ownership, an inheritor could live in the property for a year after inheriting (or claim to — enforcement seems difficult), lock in the old tax basis, and then move out. In particular, the lower tax basis is fixed as long as you live in the property for a year; it’s not permanently contingent on living in the property.
  - yonran 6y ago
    > My understanding is Prop 19 is easily evaded by trusts No, trusts do not evade Proposition 19 (although some people scrambled to transfer to children with a trust before Feb 15 to avoid Proposition 19’s new terms). Under Proposition 13/RTC 60, the assessor always looks through the trust to see the beneficial owner at any time. LLCs may be useful though to preserve up to 49% of the discount on transfer as described in this article: https://www.pe.com/2021/01/15/prop-19-whats-next-for-homeowners-and-their-children/ https://www.pe.com/2021/01/15/prop-19-whats-next-for-homeown.... > Even without hiding ownership, an inheritor could easily live in the property for a year after inheriting (or claim to —— enforcement seems difficult), lock in the old tax basis, and then move out No, the Board of Equalization’s guidance is to remove the parent-child exclusion as soon as the child stops qualifying for the homeowner’s exemption. According to the Board of Equalization letter to assessors from 2021-01-08, “at the time the family home is no longer the primary residence of a transferee, the change in ownership exclusion that applied at the initial transfer of the family home is lost.” https://www.boe.ca.gov/meetings/pdf/2021/011421-M1a1-Legal-Analysis.pdf https://www.boe.ca.gov/meetings/pdf/2021/011421-M1a1-Legal-A...
    - shuckles 6y ago
      I stand corrected. This is great to know.

by Lammy 6y ago

jedberg 6y ago

Luckily prop 19 will help solve this. As of I want to say last week, you can no longer keep the tax basis on an inherited property unless it becomes your primary residence upon inheritance. But I agree, Prop 13 definitely helps maintain generational wealth, but luckily much less so now.

shuckles 6y ago
My understanding is Prop 19 is can be evaded by trusts. Even without hiding ownership, an inheritor could live in the property for a year after inheriting (or claim to — enforcement seems difficult), lock in the old tax basis, and then move out. In particular, the lower tax basis is fixed as long as you live in the property for a year; it’s not permanently contingent on living in the property.
- yonran 6y ago
  > My understanding is Prop 19 is easily evaded by trusts No, trusts do not evade Proposition 19 (although some people scrambled to transfer to children with a trust before Feb 15 to avoid Proposition 19’s new terms). Under Proposition 13/RTC 60, the assessor always looks through the trust to see the beneficial owner at any time. LLCs may be useful though to preserve up to 49% of the discount on transfer as described in this article: https://www.pe.com/2021/01/15/prop-19-whats-next-for-homeowners-and-their-children/ https://www.pe.com/2021/01/15/prop-19-whats-next-for-homeown.... > Even without hiding ownership, an inheritor could easily live in the property for a year after inheriting (or claim to —— enforcement seems difficult), lock in the old tax basis, and then move out No, the Board of Equalization’s guidance is to remove the parent-child exclusion as soon as the child stops qualifying for the homeowner’s exemption. According to the Board of Equalization letter to assessors from 2021-01-08, “at the time the family home is no longer the primary residence of a transferee, the change in ownership exclusion that applied at the initial transfer of the family home is lost.” https://www.boe.ca.gov/meetings/pdf/2021/011421-M1a1-Legal-Analysis.pdf https://www.boe.ca.gov/meetings/pdf/2021/011421-M1a1-Legal-A...
  - shuckles 6y ago
    I stand corrected. This is great to know.