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> If the value of the property increases, there is incentive for owners to sell. Prop 13 counter-acts the incentive given by market appreciation of the value.

by muzz 13y ago

> If the value of the property increases, there is incentive for owners to sell. Prop 13 counter-acts the incentive given by market appreciation of the value. The value may go up according to the market, but the owner's taxes are capped. This is an incentive to stay, as an owner would face higher taxes and thus higher costs if they simply moved to an identically-priced home.

vonmoltke 13y ago
Florida recently solved that problem by making homestead caps transferrable after a certain period of time.
- thrownaway2424 13y ago
  This has been possible for decades in California under a later proposition. People over age 55 (iirc) can transfer their assessment to a property of same or less value within or between participating counties. Not all counties participate but several populous counties do (including Alameda).
  - muzz 13y ago
    Only 9 counties participate in inter-county transfers http://www.boe.ca.gov/proptaxes/faqs/propositions60_90.htm#1 http://www.boe.ca.gov/proptaxes/faqs/propositions60_90.htm#1 And as you point out, if you are under 55 then none of this applies.
jasonlotito 13y ago
> The value may go up according to the market, but the owner's taxes are capped. So, the value according the market is not accurate. The value is actually higher. The problem isn't the laws. The problem is the market simply doesn't want to pay an appropriate amount for the person's property.
- dragonwriter 13y ago
  > So, the value according the market is not accurate. I'm not sure how a market value can be inaccurate, that implies that there is some objectively correct non-market value that you could meeasure the market value against, which is an odd idea. What Prop 13's limit on assessment increases does is (in terms of the forces that drive market prices) is decrease supply (because it increases the value of homes to people who already own them, by decreasing the cost -- in property taxes -- paid compared to the utility derived from holding the property), which, considered on its own, increases market clearing price. It may also increase demand (since it also decreases long-term expected costs for new buyers), but probably more weakly than it increases supply (since the decreased cost is already being realized by sellers -- and more strongly the longer they have held the whome -- wherease it will take several years for the decreased cost to be realized by a new buyer, since purchase events trigger assessment at full value.) > The problem isn't the laws. The problem is the market simply doesn't want to pay an appropriate amount for the person's property. The law adds non-transferrable value (or, less simply, provides a non-transferrable abatement of cost) as long as the owner holds the property. This creates an externally-imposed difference in the value to the owner and the value to other market participants.

by muzz 13y ago

vonmoltke 13y ago

Florida recently solved that problem by making homestead caps transferrable after a certain period of time.

thrownaway2424 13y ago
This has been possible for decades in California under a later proposition. People over age 55 (iirc) can transfer their assessment to a property of same or less value within or between participating counties. Not all counties participate but several populous counties do (including Alameda).
- muzz 13y ago
  Only 9 counties participate in inter-county transfers http://www.boe.ca.gov/proptaxes/faqs/propositions60_90.htm#1 http://www.boe.ca.gov/proptaxes/faqs/propositions60_90.htm#1 And as you point out, if you are under 55 then none of this applies.

jasonlotito 13y ago

> The value may go up according to the market, but the owner's taxes are capped. So, the value according the market is not accurate. The value is actually higher. The problem isn't the laws. The problem is the market simply doesn't want to pay an appropriate amount for the person's property.

dragonwriter 13y ago
> So, the value according the market is not accurate. I'm not sure how a market value can be inaccurate, that implies that there is some objectively correct non-market value that you could meeasure the market value against, which is an odd idea. What Prop 13's limit on assessment increases does is (in terms of the forces that drive market prices) is decrease supply (because it increases the value of homes to people who already own them, by decreasing the cost -- in property taxes -- paid compared to the utility derived from holding the property), which, considered on its own, increases market clearing price. It may also increase demand (since it also decreases long-term expected costs for new buyers), but probably more weakly than it increases supply (since the decreased cost is already being realized by sellers -- and more strongly the longer they have held the whome -- wherease it will take several years for the decreased cost to be realized by a new buyer, since purchase events trigger assessment at full value.) > The problem isn't the laws. The problem is the market simply doesn't want to pay an appropriate amount for the person's property. The law adds non-transferrable value (or, less simply, provides a non-transferrable abatement of cost) as long as the owner holds the property. This creates an externally-imposed difference in the value to the owner and the value to other market participants.