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My first impression is: That will add an even bigger chilling effect than we already have w/ Prop13. More people would stay put (or just avoid selling.) Also i
by encoderer 13y ago
My first impression is: That will add an even bigger chilling effect than we already have w/ Prop13. More people would stay put (or just avoid selling.)
Also it's not like values are an eternally increasing step function. Suppose I bought in '95, saw my paper net worth rise thru the boom, then I need to sell at a depressed price in 2001. Without this lien waiting for me, I can take comfort knowing that I'm selling at a depressed price but also buying again at a depressed price. But when you take tens of thousands off the table to pay back taxes, my down payment has eroded significantly, increasing my borrowing cost.
Of course outside of California most people are used to periodic reassessment. It's just part of life. But I think tinkering w/ Prop13 in the ways you describe are possibly worse than just eliminating it and replacing it with an expanded homestead exemption of some kind.
- ScottBurson 13y agoI agree, some accommodation should be made for bubbles. Perhaps the rule should be, not that you accumulate unpaid tax every year based on the difference between what you paid and the assessed value as of that year, but simply that the assessed value is retroactively considered to be the average of the purchase price and the sale price. This would penalize windfall profits, where the market takes a sudden leap and then you sell, but would provide some protection against bubbles.
- raldi 13y agoI'm the guy from up the thread, and I endorse this plan.
- prostoalex 13y agoThere's already a capital gains tax to penalize excess profits when selling.
- raldi 13y agoI addressed this here: https://news.ycombinator.com/item?id=7594651 https://news.ycombinator.com/item?id=7594651