3 ms·
One major disturbance to 1) in CA is Prop 13 Property Taxes in CA are determined based on the time of purchase. They are only allowed to go up 2% per year, whi
by Balgair 2y ago
One major disturbance to 1) in CA is Prop 13
Property Taxes in CA are determined based on the time of purchase. They are only allowed to go up 2% per year, while the rise in market value increases much faster. Meaning that you are highly incentivized to hold on to property, thereby reducing supply more so than other property markets in the US.
This kinda distorts 3) as well, since you also want to protect that investment and then you get NIMBY stuff too. CA is trying to fix things by disallowing cities from blocking new construction, but it's slow going. on the legal side.
- ryathal 2y agoMany states have similar laws and they don't see the same massive real estate costs. High property cost is almost entirely demand based.
- Balgair 2y agoI'm sorry. What other state has it so that taxes only reset upon sale?
- ryathal 2y agoMaine, New Hampshire, Tennessee, and Vermont are the only states that don't have any limits on the increase in property taxes. California may be on the low end at 3%, but most are limiting to less than 10% growth. You can read more here https://www.kiplinger.com/taxes/property-tax-cap-by-state https://www.kiplinger.com/taxes/property-tax-cap-by-state