3 ms·

Just to put a dose of reality here, Prop 13 property taxes reset on sales (there are exceptions when selling to children of the owners but generally they reset)

Just to put a dose of reality here, Prop 13 property taxes reset on sales (there are exceptions when selling to children of the owners but generally they reset) and property turnover rates in California are generally in excess of 10%. What that means is that pretty much all of the taxes are reset every 10 years or so. This is more true of "desirable" places to live (Bay Area, LA, San Diego) than say "less desirable". I have encouraged (without success so far) the County Assessor's office to publish the "net" tax year (average, median, and mode) for the county to help people better understand this.

riku_iki 3y ago
Unless it is the same 10 percent resetting over and over and other 90 percent don't change hands
sokoloff 3y ago
It seems like around 2/3 of the base would be reset in 10 years, if each house has an equal, random chance to be sold. I think the reality is smaller homes change hands more often and larger homes less often, meaning the chance that a larger home changes hands in a given decade could easily be less than half. (And naturally, the longer a house is held, the longer it’s likely to be held, even without Prop 13, but Prop 13 makes it a stronger sticky force.)
sib 3y ago
>> Prop 13 property taxes reset on sales ... and property turnover rates in California are generally in excess of 10%. What that means is that pretty much all of the taxes are reset every 10 years or so That would be assuming certain things, among which would be that if 10% of properties sell every year, there is a consistent 10% chance of a given property selling each year. What I can tell you from looking at the data on all the houses in the neighborhood in which we bought our home in 2019 is that the vast majority of them had been last purchased more than 20 years earlier (and quite a few more than 30). Given the significant economic incentives created by Prop 13, houses in appreciating areas should be less likely to turn over than ones in areas where values are relatively stable.
- josephjrobison 3y ago
  In some (or all?) counties, if you move to another house in the same county you can keep your original tax base. Transferring a Principal Residence Value within a County “Proposition 60 (Revenue and Taxation Code 69.5) Property owners of at least 55 years of age may transfer the base year value of their principal residence to a replacement principal residence. The replacement must be of equal or lesser current market value and located within the same county. Sacramento County does not allow base year transfers from other counties.” https://assessor.saccounty.net/LowerMyTaxes/BaseYearValueTransfers/Pages/default.aspx https://assessor.saccounty.net/LowerMyTaxes/BaseYearValueTra...
  - ChuckMcM 3y ago
    As of 2023 this is true any county to any county. What they took away was being able to inherit the tax base on rental properties.
    - josephjrobison 3y ago
      Great addition thanks!
ChuckMcM 3y ago
My point here folks is this is a knowable number if you want to know it. Just spend some time at the County seat and look at the public records for home sales. If you know a realtor you can pull MLS data and if you do some data science on it you can draw heat maps of neighborhoods where turnover is more rapid and those where it is less. Do a bit of legwork. I'll tell you that the retiree living in a home they have had for 50 years is an outlier, but encourage folks to go to the primary sources themselves, don't take my word for it.
r00fus 3y ago
If you have a property that's owned by your corporation, you can "sell" the property by transferring your company ownership to another holding corporation (slowly by changing the BoD over time). The property deed doesn't change hands; no prop13 trigger. This is how all the rich people avoid prop13 taxation.
- ChuckMcM 3y ago
  Yes you can. I re-iterate that county tax records in the US (California for sure) are public records and you can go to the county clerk's office and get copies of them. In CA it is often "free" to view them at the office but costs money to have copies made. So spend some time and find out what everyone is paying in property taxes. If you do this in a "wealthy" area, you will find a lot of properties are held in living trusts (because probate), a lot will be in individual names, and a few will be own by LLCs. The latter are typically rentals (rather than rich people avoiding taxes, they are avoiding lawsuits from their tenants). As of 2023, if you aren't careful[1] the LLC rentals will lose their tax basis when they are inherited. If you were working for Redfin or Zillow you could probably pull this out of data you had on your servers because the companies have paid the counties for copies of all the records. [1] Where careful here is having created the LLC organizing document (or amended it) to allow for the transfer of majority ownership without triggering a sale. See this link for the current hoops -- https://www.kaidenelderlaw.com/blog/2023/march/can-an-llc-help-my-kids-avoid-california-propert/ https://www.kaidenelderlaw.com/blog/2023/march/can-an-llc-he...

riku_iki 3y ago

Unless it is the same 10 percent resetting over and over and other 90 percent don't change hands

sokoloff 3y ago

It seems like around 2/3 of the base would be reset in 10 years, if each house has an equal, random chance to be sold. I think the reality is smaller homes change hands more often and larger homes less often, meaning the chance that a larger home changes hands in a given decade could easily be less than half. (And naturally, the longer a house is held, the longer it’s likely to be held, even without Prop 13, but Prop 13 makes it a stronger sticky force.)

sib 3y ago

>> Prop 13 property taxes reset on sales ... and property turnover rates in California are generally in excess of 10%. What that means is that pretty much all of the taxes are reset every 10 years or so That would be assuming certain things, among which would be that if 10% of properties sell every year, there is a consistent 10% chance of a given property selling each year. What I can tell you from looking at the data on all the houses in the neighborhood in which we bought our home in 2019 is that the vast majority of them had been last purchased more than 20 years earlier (and quite a few more than 30). Given the significant economic incentives created by Prop 13, houses in appreciating areas should be less likely to turn over than ones in areas where values are relatively stable.

josephjrobison 3y ago
In some (or all?) counties, if you move to another house in the same county you can keep your original tax base. Transferring a Principal Residence Value within a County “Proposition 60 (Revenue and Taxation Code 69.5) Property owners of at least 55 years of age may transfer the base year value of their principal residence to a replacement principal residence. The replacement must be of equal or lesser current market value and located within the same county. Sacramento County does not allow base year transfers from other counties.” https://assessor.saccounty.net/LowerMyTaxes/BaseYearValueTransfers/Pages/default.aspx https://assessor.saccounty.net/LowerMyTaxes/BaseYearValueTra...
- ChuckMcM 3y ago
  As of 2023 this is true any county to any county. What they took away was being able to inherit the tax base on rental properties.
  - josephjrobison 3y ago
    Great addition thanks!

ChuckMcM 3y ago

My point here folks is this is a knowable number if you want to know it. Just spend some time at the County seat and look at the public records for home sales. If you know a realtor you can pull MLS data and if you do some data science on it you can draw heat maps of neighborhoods where turnover is more rapid and those where it is less. Do a bit of legwork. I'll tell you that the retiree living in a home they have had for 50 years is an outlier, but encourage folks to go to the primary sources themselves, don't take my word for it.

r00fus 3y ago

If you have a property that's owned by your corporation, you can "sell" the property by transferring your company ownership to another holding corporation (slowly by changing the BoD over time). The property deed doesn't change hands; no prop13 trigger. This is how all the rich people avoid prop13 taxation.

ChuckMcM 3y ago
Yes you can. I re-iterate that county tax records in the US (California for sure) are public records and you can go to the county clerk's office and get copies of them. In CA it is often "free" to view them at the office but costs money to have copies made. So spend some time and find out what everyone is paying in property taxes. If you do this in a "wealthy" area, you will find a lot of properties are held in living trusts (because probate), a lot will be in individual names, and a few will be own by LLCs. The latter are typically rentals (rather than rich people avoiding taxes, they are avoiding lawsuits from their tenants). As of 2023, if you aren't careful[1] the LLC rentals will lose their tax basis when they are inherited. If you were working for Redfin or Zillow you could probably pull this out of data you had on your servers because the companies have paid the counties for copies of all the records. [1] Where careful here is having created the LLC organizing document (or amended it) to allow for the transfer of majority ownership without triggering a sale. See this link for the current hoops -- https://www.kaidenelderlaw.com/blog/2023/march/can-an-llc-help-my-kids-avoid-california-propert/ https://www.kaidenelderlaw.com/blog/2023/march/can-an-llc-he...