5 ms·

And yet in California, it has practically no effect on prices because people selling have absurdly low property tax rates locked in from buying decades ago, tha

And yet in California, it has practically no effect on prices because people selling have absurdly low property tax rates locked in from buying decades ago, thanks to Prop 13.

dawnerd 3y ago
Oregon too. People buying new construction get kinda screwed.
- ilikehurdles 3y ago
  Oregon property tax rates are insanely high on older units too IMO. How does this apply to new construction?
  - zerbinxx 3y ago
    My understanding is that in Oregon, new construction property taxes are higher than on older units
  - dawnerd 3y ago
    Old property gets locked in until there’s something to trigger a change. There’s a couple ways to avoid it a good contractor can work around. It’s not the rate that’s lower on the older property it’s the property value. They have a law that limits how much it can increase per year similar to prop 13 but it can transfer to new owners. Makes old houses worth significantly more than some new homes.
    - dawnerd 3y ago
      Just to add more context here’s the Oregon rules. The linked doc might not be the most up to date but should provide enough info. https://www.oregon.gov/DOR/forms/FormsPubs/maximum-assessed-value-manual_303-438.pdf https://www.oregon.gov/DOR/forms/FormsPubs/maximum-assessed-...
fred_is_fred 3y ago
That's the perfect analogy, a huge disincentive to move. I was telling my son today that I would love to move, we need a different house and for a variety of reasons in a different neighborhood. But I cannot bring myself to trade 2% for 7%. Back when it was 5.75% for 6.25% who cares, now it's a big deal. My exact same house now would cost me 2x in payments.
- arb-spreads 3y ago
  Some people rent out the original house or try to transfer the low mortgage rate in order to monetize it.
- cperciva 3y ago
  Long term non-transferable mortgages are the home ownership equivalent of rent control. In both cases housing ends up being used suboptimally because moving is too expensive.
Spivak 3y ago
Honestly I think this one is totally fair. I would even go further and say that property tax you pay on your house should be capped at what you're paying on the day you bought it. And even further we should just get rid of property taxes and collect it via income. We don't tax unrealized gains except for property and doubly because you can't just sell 20% of your house to pay the taxes. Owning your home is meaningless if you can be priced out of it while just living there. Making people come up with money because they have an asset that can't be readily turned into money is silly when you can just tax money.
- bugglebeetle 3y ago
  If you shouldn’t have to pay more in property tax, then why should you be a me to realize corresponding gains on the sale price, above inflation? After all, that has very little to do with whatever the owner does in HCOL areas, but is instead drive by the total economic activity that occurs around them. Home ownership is also meaningless if more and more people are locked out of it based on the premises of “fuck you I got mine (20 years ago)”.
  - bombcar 3y ago
    Those gains are taxed (minus the exemptions, which perhaps are too generous). Part of that is to prevent the “I can’t move from my house to the identical one across the street because of taxes” issue.
    - bugglebeetle 3y ago
      For all practical purposes, the majority of people do not pay taxes on those gains and they’re easily dodged through a variety of mechanisms.
- SeanAnderson 3y ago
  It's not entirely meaningless. You have a place you can modify to your desire as long as it's allowed by the law and you're earning equity instead of paying it to a lord. Quit exaggerating. California's laws allow for tax to not reset when passing houses down through inheritance, too. Do you feel this is also fair?

And yet in California, it has practically no effect on prices because people selling have absurdly low property tax rates locked in from buying decades ago, thanks to Prop 13.

dawnerd 3y ago

Oregon too. People buying new construction get kinda screwed.

ilikehurdles 3y ago
Oregon property tax rates are insanely high on older units too IMO. How does this apply to new construction?
- zerbinxx 3y ago
  My understanding is that in Oregon, new construction property taxes are higher than on older units
- dawnerd 3y ago
  Old property gets locked in until there’s something to trigger a change. There’s a couple ways to avoid it a good contractor can work around. It’s not the rate that’s lower on the older property it’s the property value. They have a law that limits how much it can increase per year similar to prop 13 but it can transfer to new owners. Makes old houses worth significantly more than some new homes.
  - dawnerd 3y ago
    Just to add more context here’s the Oregon rules. The linked doc might not be the most up to date but should provide enough info. https://www.oregon.gov/DOR/forms/FormsPubs/maximum-assessed-value-manual_303-438.pdf https://www.oregon.gov/DOR/forms/FormsPubs/maximum-assessed-...

fred_is_fred 3y ago

That's the perfect analogy, a huge disincentive to move. I was telling my son today that I would love to move, we need a different house and for a variety of reasons in a different neighborhood. But I cannot bring myself to trade 2% for 7%. Back when it was 5.75% for 6.25% who cares, now it's a big deal. My exact same house now would cost me 2x in payments.

arb-spreads 3y ago
Some people rent out the original house or try to transfer the low mortgage rate in order to monetize it.
cperciva 3y ago
Long term non-transferable mortgages are the home ownership equivalent of rent control. In both cases housing ends up being used suboptimally because moving is too expensive.

Spivak 3y ago

Honestly I think this one is totally fair. I would even go further and say that property tax you pay on your house should be capped at what you're paying on the day you bought it. And even further we should just get rid of property taxes and collect it via income. We don't tax unrealized gains except for property and doubly because you can't just sell 20% of your house to pay the taxes. Owning your home is meaningless if you can be priced out of it while just living there. Making people come up with money because they have an asset that can't be readily turned into money is silly when you can just tax money.

bugglebeetle 3y ago
If you shouldn’t have to pay more in property tax, then why should you be a me to realize corresponding gains on the sale price, above inflation? After all, that has very little to do with whatever the owner does in HCOL areas, but is instead drive by the total economic activity that occurs around them. Home ownership is also meaningless if more and more people are locked out of it based on the premises of “fuck you I got mine (20 years ago)”.
- bombcar 3y ago
  Those gains are taxed (minus the exemptions, which perhaps are too generous). Part of that is to prevent the “I can’t move from my house to the identical one across the street because of taxes” issue.
  - bugglebeetle 3y ago
    For all practical purposes, the majority of people do not pay taxes on those gains and they’re easily dodged through a variety of mechanisms.
SeanAnderson 3y ago
It's not entirely meaningless. You have a place you can modify to your desire as long as it's allowed by the law and you're earning equity instead of paying it to a lord. Quit exaggerating. California's laws allow for tax to not reset when passing houses down through inheritance, too. Do you feel this is also fair?