5 ms·

Not sure how it works in every state, but my property taxes are liable to increase year to year, for a home I own. Are you saying this is not the case in Califo

Not sure how it works in every state, but my property taxes are liable to increase year to year, for a home I own. Are you saying this is not the case in California? They just true up property taxes for a property upon next sale?

whimsicalism 2y ago
yes, it is a serious problem in california - people consider this one of the primary causes of the housing crisis
countvonbalzac 2y ago
Prop 13 means that property tax increases are capped at 2% or inflation, whichever is lower.
collingreen 2y ago
Yep! It's good to be born rich already!
koolba 2y ago
CA assessed value for property tax calculations is capped at 2% growth per year. So if you bought a house in the 1970s you’re never selling that thing as the tax hit on any new property annually would be much more. If anything, you keep the property, rent it out, and never do any major renovation that would trigger a full reassessment.
- briffle 2y ago
  Oregon passed a ballot measure in the early 90's that is essentially the same. A mile away I have a literal mansion that is on the market for $8m. looking up the property taxes, the house has been owned by a trust since the late 80's, and they pay less in property taxes on the mansion and 15 acres than I do for my regular house in the suburbs.. I'm don't know them, but have heard its the kids that live in the house now, but the trust didn't sell or change so taxes have been kept the same. Also have a house down the street that has been completely vacant for 2 years now, in the middle of a housing crisis in my area. The owner passed away, and the family couldn't decide what to do with her stuff. I talked to one of them, he said the taxes are only $500/year on the place, and utilities are less than $100/month, and pretty cheap to have a crew mow the lawn weekly, till they decide what to do.
  - pc86 2y ago
    It's not just the West Coast, midwest suburb here and our home's previous owners only had it for a decade but we had a 60% property tax increase after buying.
  - 1024core 2y ago
    If you have some time to kill, this site: https://www.officialdata.org/ca-property-tax/#37.76919241859377,-122.4280893802643,18 https://www.officialdata.org/ca-property-tax/#37.76919241859... will show you your neighborhood's property taxes (Cali only, I think). You will find neighborhoods where one owner is paying < $1000/year and another is paying > $30000/year
rdj 2y ago
California does handle it differently. https://en.wikipedia.org/wiki/1978_California_Proposition_13 https://en.wikipedia.org/wiki/1978_California_Proposition_13 - "by assessing values at their 1976 value and restricted annual increases of assessed value to an inflation factor, not to exceed 2% per year. It prohibits reassessment of a new base year value except in cases of (a) change in ownership, or (b) completion of new construction." https://en.wikipedia.org/wiki/2020_California_Proposition_19 https://en.wikipedia.org/wiki/2020_California_Proposition_19 - Some updates about transferring to family, farms, etc
whartung 2y ago
Yes. Proposition 13 is famous for triggering sweeping tax changes across the country. In CA, Prop 13 effectively caps how much the assessed value of your home can increase each year to 2%. So over time, the tax burden of long term property is much less than the current property value. When the house changes hands (generally) the house is reassessed to the market. There was also new laws passed a few years ago where a family can bring their current tax basis forward to a new home. There’s also the phenomenon of businesses buying other businesses, but leaving them formally intact so that their assets don’t “change hands” thus maintaining the inherited tax basis.
- whimsicalism 2y ago
  > Yes. Proposition 13 is famous for triggering sweeping tax changes across the country. prop 13 is cali only, there's no such thing as a federal ballot initiative
hindsightbias 2y ago
Not only your property tax rate but your valuation in other states. Used rebuild friends old homes and do habitat in a freedom state like TX. They can't afford to live there anymore. Low-service state gov't rolls it all down to you. Socialist CA fixed that 40 years ago.
olliej 2y ago
Businesses in CA got people to vote for prop13 in the 70s I think (the propaganda justifying it was essentially “the Supreme Court said your property taxes have to pay for the same quality of education for poor people”, but the actual reason is a massive tax cut for corporations as they never actually sell property so get a permanent cut to property taxes). It basically says “unless a property changes ownership the taxable valuation cannot increase by more than 2%”, it doesn’t matter if it’s a rental property that has rent increased by 50%, or a corporate owned property that has financial reports reflecting its true value, it’s capped at 2% increase. This has a follow on impact of increasing the actual property tax rates (because the majority of properties are undervalued by actual market rates the only option is higher base tax rates) which means if you do buy a new property you get hit with massive property taxes (over time they will become cheap relative to property value but initial cost is insane). We’ve owned our house for a decade, and if we were to try and buy it today the property taxes on it would be higher than our current mortgage payments because of the increase in actual market value. The actual fix for this is complicated (there’s a real issue where a person is retired say and their property taxes could increase to being unaffordable forcing them to sell their home), but I feel a reasonable improvement would be to say that taxable value for residential rental property increases at the maximum of “2% or rate of rent increase”, and commercial property gets taxed at the value included in financial reports, or something to that effect. Alas prop13 is actually a modification to the California state constitution so the only way to fix it is through an amendment to the constitution.
- pc86 2y ago
  It's interesting that in your example, your specific situation would still have tax rates subsidized by your neighbors while the people you consider the out-group (corporations, landlords) get minimal or no benefit from it. I'm also not convinced corporations are getting any outsized benefit, business buy and sell real estate all the time. The fix doesn't seem complicated. Assess a home's value. Tax it. If you're concerned about it disproportionately impacting low or fixed income folks, move as much of that tax as you can to income and commuter taxes.
  - coryrc 2y ago

whimsicalism 2y ago

yes, it is a serious problem in california - people consider this one of the primary causes of the housing crisis

countvonbalzac 2y ago

Prop 13 means that property tax increases are capped at 2% or inflation, whichever is lower.

collingreen 2y ago

Yep! It's good to be born rich already!

koolba 2y ago

CA assessed value for property tax calculations is capped at 2% growth per year. So if you bought a house in the 1970s you’re never selling that thing as the tax hit on any new property annually would be much more. If anything, you keep the property, rent it out, and never do any major renovation that would trigger a full reassessment.

briffle 2y ago
Oregon passed a ballot measure in the early 90's that is essentially the same. A mile away I have a literal mansion that is on the market for $8m. looking up the property taxes, the house has been owned by a trust since the late 80's, and they pay less in property taxes on the mansion and 15 acres than I do for my regular house in the suburbs.. I'm don't know them, but have heard its the kids that live in the house now, but the trust didn't sell or change so taxes have been kept the same. Also have a house down the street that has been completely vacant for 2 years now, in the middle of a housing crisis in my area. The owner passed away, and the family couldn't decide what to do with her stuff. I talked to one of them, he said the taxes are only $500/year on the place, and utilities are less than $100/month, and pretty cheap to have a crew mow the lawn weekly, till they decide what to do.
- pc86 2y ago
  It's not just the West Coast, midwest suburb here and our home's previous owners only had it for a decade but we had a 60% property tax increase after buying.
- 1024core 2y ago
  If you have some time to kill, this site: https://www.officialdata.org/ca-property-tax/#37.76919241859377,-122.4280893802643,18 https://www.officialdata.org/ca-property-tax/#37.76919241859... will show you your neighborhood's property taxes (Cali only, I think). You will find neighborhoods where one owner is paying < $1000/year and another is paying > $30000/year

rdj 2y ago

California does handle it differently. https://en.wikipedia.org/wiki/1978_California_Proposition_13 https://en.wikipedia.org/wiki/1978_California_Proposition_13 - "by assessing values at their 1976 value and restricted annual increases of assessed value to an inflation factor, not to exceed 2% per year. It prohibits reassessment of a new base year value except in cases of (a) change in ownership, or (b) completion of new construction." https://en.wikipedia.org/wiki/2020_California_Proposition_19 https://en.wikipedia.org/wiki/2020_California_Proposition_19 - Some updates about transferring to family, farms, etc

whartung 2y ago

Yes. Proposition 13 is famous for triggering sweeping tax changes across the country. In CA, Prop 13 effectively caps how much the assessed value of your home can increase each year to 2%. So over time, the tax burden of long term property is much less than the current property value. When the house changes hands (generally) the house is reassessed to the market. There was also new laws passed a few years ago where a family can bring their current tax basis forward to a new home. There’s also the phenomenon of businesses buying other businesses, but leaving them formally intact so that their assets don’t “change hands” thus maintaining the inherited tax basis.

whimsicalism 2y ago
> Yes. Proposition 13 is famous for triggering sweeping tax changes across the country. prop 13 is cali only, there's no such thing as a federal ballot initiative

hindsightbias 2y ago

Not only your property tax rate but your valuation in other states. Used rebuild friends old homes and do habitat in a freedom state like TX. They can't afford to live there anymore. Low-service state gov't rolls it all down to you. Socialist CA fixed that 40 years ago.

olliej 2y ago

Businesses in CA got people to vote for prop13 in the 70s I think (the propaganda justifying it was essentially “the Supreme Court said your property taxes have to pay for the same quality of education for poor people”, but the actual reason is a massive tax cut for corporations as they never actually sell property so get a permanent cut to property taxes). It basically says “unless a property changes ownership the taxable valuation cannot increase by more than 2%”, it doesn’t matter if it’s a rental property that has rent increased by 50%, or a corporate owned property that has financial reports reflecting its true value, it’s capped at 2% increase. This has a follow on impact of increasing the actual property tax rates (because the majority of properties are undervalued by actual market rates the only option is higher base tax rates) which means if you do buy a new property you get hit with massive property taxes (over time they will become cheap relative to property value but initial cost is insane). We’ve owned our house for a decade, and if we were to try and buy it today the property taxes on it would be higher than our current mortgage payments because of the increase in actual market value. The actual fix for this is complicated (there’s a real issue where a person is retired say and their property taxes could increase to being unaffordable forcing them to sell their home), but I feel a reasonable improvement would be to say that taxable value for residential rental property increases at the maximum of “2% or rate of rent increase”, and commercial property gets taxed at the value included in financial reports, or something to that effect. Alas prop13 is actually a modification to the California state constitution so the only way to fix it is through an amendment to the constitution.

pc86 2y ago
It's interesting that in your example, your specific situation would still have tax rates subsidized by your neighbors while the people you consider the out-group (corporations, landlords) get minimal or no benefit from it. I'm also not convinced corporations are getting any outsized benefit, business buy and sell real estate all the time. The fix doesn't seem complicated. Assess a home's value. Tax it. If you're concerned about it disproportionately impacting low or fixed income folks, move as much of that tax as you can to income and commuter taxes.
- coryrc 2y ago