5 ms·

> which leave more of your wages to pay the rent. Austin has crazy property taxes in comparison to CA, which is where they get you. 2.5% tax rate evaluated fo

by gopalv 5y ago

> which leave more of your wages to pay the rent. Austin has crazy property taxes in comparison to CA, which is where they get you. 2.5% tax rate evaluated for the property prices annually, so retiring on a fixed income in Austin is a tiny bit harder than in CA (that's the real goal of Prop 13). Income taxes are easier to think about, because it goes to zero when your income drops, but property taxes based on the unrealized value of the house is completely out of your control. The homestead exemption does apply, but Prop 13 is by far the superior option for an owner, though what Austin does is better for the government's fiscal policy.

thephyber 5y ago
> the superior option for an owner Agree with you, but I would guess most of the Gigafactory workers who haven’t exercised stock options probably can’t afford to own in the Bay Area. While Prop 13 probably filters down to renters in reduced rent, the supply/demand issues for housing is still pretty out of whack even with all of the new units in Milpitas. Also Prop 13 has second order effects that keep older empty nester boomers in a large house even though they would otherwise downsize if they didn’t lose such a generous benefit.
- rcpt 5y ago
  > Prop 13 probably filters down to renters in reduced rent It doesn't. Rent is set by the market. New and old landlords have drastically different tax rates but charge roughly the same rent. Same deal with gas stations: you can't figure out how much property tax they're paying based on the price at the pump. In fact one of the main reasons California has rent control is that Howard Jarvis promised renters that landlords would be nice and pass along the cuts. Of course this was a lie and in the early 80s cities lashed out with rent control in response.
  - refurb 5y ago
    It kind of does but more in a political way. Property taxes on commercial property are also frozen and the trade off was rent control for tenants. But you are right that the rental and home sale markets are entirely different. Owning costs more than renting in SF by a large margin.
deleted 5y ago
[deleted]
rcpt 5y ago
That's not the "real goal" of Prop 13. California low income seniors have the California Tax Postponment Program which allows them to defer taxes until death if they wish. Prop 13 was a "tax revolt" passed because greedy angry landowners wanted revenge on the state for taxing them.

by gopalv 5y ago

thephyber 5y ago

> the superior option for an owner Agree with you, but I would guess most of the Gigafactory workers who haven’t exercised stock options probably can’t afford to own in the Bay Area. While Prop 13 probably filters down to renters in reduced rent, the supply/demand issues for housing is still pretty out of whack even with all of the new units in Milpitas. Also Prop 13 has second order effects that keep older empty nester boomers in a large house even though they would otherwise downsize if they didn’t lose such a generous benefit.

rcpt 5y ago
> Prop 13 probably filters down to renters in reduced rent It doesn't. Rent is set by the market. New and old landlords have drastically different tax rates but charge roughly the same rent. Same deal with gas stations: you can't figure out how much property tax they're paying based on the price at the pump. In fact one of the main reasons California has rent control is that Howard Jarvis promised renters that landlords would be nice and pass along the cuts. Of course this was a lie and in the early 80s cities lashed out with rent control in response.
- refurb 5y ago
  It kind of does but more in a political way. Property taxes on commercial property are also frozen and the trade off was rent control for tenants. But you are right that the rental and home sale markets are entirely different. Owning costs more than renting in SF by a large margin.

deleted 5y ago

[deleted]

rcpt 5y ago

That's not the "real goal" of Prop 13. California low income seniors have the California Tax Postponment Program which allows them to defer taxes until death if they wish. Prop 13 was a "tax revolt" passed because greedy angry landowners wanted revenge on the state for taxing them.