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> Local government need higher prices as without the high property prices their property tax receipt will tank making them unable to meet their budgets. Califo
by cowsandmilk 3y ago
> Local government need higher prices as without the high property prices their property tax receipt will tank making them unable to meet their budgets.
California is the only state facing this due to Prop 13. Most jurisdictions are able to adjust real estate tax rates in response to the drop in valuations and many did so when property values dropped in the Great Recession.
- seanmcdirmid 3y agoA lot of jurisdictions work on a budget: they need X dollars from property taxes, and use your assessed value to determine the rate they need to get X dollars. So if a recession hits, your property taxes don’t go down even if your home falls in value (your rate simply goes up). In a housing boom, your property value goes up, but so does everyone else’s, since X is fixed your rate goes down.
- deleted 3y ago[deleted]
- smugma 3y agoIt’s the opposite in California. Even if prices drop 30%, if a property wasn’t traded in the last few (5-7?) years, it’s probably worth more than the assessed value.