Property tax complaints

[JLee]

I understand how property taxes work. I'm a CPA and also have my real estate license.  I'm saying that value taxes are already stupid because you don't have the cash to pay for unrealized gains, so property tax increases should be capped.  If you have property tax increase caps in your state then that's wonderful.  Exactly what I think there should be.

Yup, especially because a "reasonable" increase of 3-5% ends up being pretty significant once taxes are $15k+.

[mm1970]

Most elderly people are not millionaires.

Very true. The ones who are, though? They should generally be expected to pay property tax at the same rate as their 30-year-old neighbor who just bought their first home. That 30-year-old just scraped together a six-figure down payment, is currently paying a mortgage at >7%, is probably going to be paying a bunch of money for daycare because few can afford to buy a house these days on just a single income. Now you want them to pay double property tax, all so their elderly millionaire neighbor doesn't have to suffer the indignity of reducing their kids' inheritance by borrowing against their home equity (or moving into a smaller home, or selling their back yard to a developer, or any of the other things @Log mentioned) to fund their million-dollar-home lifestyle? Nah. Count me out.

Plus, it's not either/ or, it's a sliding scale.  I live in California, and my kid's elementary school district has some homes worth $2.5-3M.
I have friends in that neighborhood whose house is worth $2-2.5 million.  Their annual property taxes?  $1249.
The house across the street that sold last year?  $27,000.

I'm sorry, but that is not ok.  Meanwhile our teachers cannot afford to live here.

California allows you to move and downsize and keep your tax basis.  I personally like the idea of deferring 1/2 of the owed taxes until you die.  Leave the $2.5M house to the kids?  Oh, but you have 20 years x 13,000 dollars in back taxes?  Gotta pay that first.

[seattlecyclone]

I understand how property taxes work. I'm a CPA and also have my real estate license.  I'm saying that value taxes are already stupid because you don't have the cash to pay for unrealized gains, so property tax increases should be capped.  If you have property tax increase caps in your state then that's wonderful.  Exactly what I think there should be.

If you understand that a 10x increase in property values doesn't usually correspond to a 10x increase in property taxes, why in the world are you using a hypothetical to the contrary as an argument against property taxation?

Our state has caps on overall levy increases (which creates its own set of problems when local jurisdictions have no other significant taxing authority), but what we absolutely don't have is differential tax rates based on how long the property has been in your family. Those are pure nonsense.

[wageslave23]

I understand how property taxes work. I'm a CPA and also have my real estate license.  I'm saying that value taxes are already stupid because you don't have the cash to pay for unrealized gains, so property tax increases should be capped.  If you have property tax increase caps in your state then that's wonderful.  Exactly what I think there should be.

If you understand that a 10x increase in property values doesn't usually correspond to a 10x increase in property taxes, why in the world are you using a hypothetical to the contrary as an argument against property taxation?

Our state has caps on overall levy increases (which creates its own set of problems when local jurisdictions have no other significant taxing authority), but what we absolutely don't have is differential tax rates based on how long the property has been in your family. Those are pure nonsense.

Because we are talking about tax increases being justified by increases in home values.  I guess I could have used actual values but I didn't know someone would pick apart the details.  I bought a house for 135k when the property taxes were 4200. The house is now worth about 230k and the property taxes are 7400. Sorry my ratio was off a little.  I still believe property tax increases should be based on inflation. 

And I never said that there should be two different tax rates. Thats a different topic.

ETA - my whole point is property value increases should be irrelevant to property tax increases . Property taxes should be based on the state and local government budgets which should only increase with inflation. 

I also don't expect or want my property taxes to decrease by 50% if hone values decrease by 50%. Governments should charge what they need to with adjustments for inflation.  Property value increases or decreases do not correlate to the cost of government services.

[dandarc]

I understand how property taxes work. I'm a CPA and also have my real estate license.  I'm saying that value taxes are already stupid because you don't have the cash to pay for unrealized gains, so property tax increases should be capped.  If you have property tax increase caps in your state then that's wonderful.  Exactly what I think there should be.

If you understand that a 10x increase in property values doesn't usually correspond to a 10x increase in property taxes, why in the world are you using a hypothetical to the contrary as an argument against property taxation?

Our state has caps on overall levy increases (which creates its own set of problems when local jurisdictions have no other significant taxing authority), but what we absolutely don't have is differential tax rates based on how long the property has been in your family. Those are pure nonsense.

Because we are talking about tax increases being justified by increases in home values.  I guess I could have used actual values but I didn't know someone would pick apart the details.  I bought a house for 135k when the property taxes were 4200. The house is now worth about 230k and the property taxes are 7400. Sorry my ratio was off a little.  I still believe property tax increases should be based on inflation. 

And I never said that there should be two different tax rates. Thats a different topic.

ETA - my whole point is property value increases should be irrelevant to property tax increases . Property taxes should be based on the state and local government budgets which should only increase with inflation.

So no new or expanded services ever in wageslave's locality. And if the low taxes work and growth happens, then poorly maintained everything and a less and less capable government over time.

ETA: aside from the fact that's literally what happens in most places, at least with regards to local property taxes. The assessor does its thing, then the budgets are set, then they figure out the tax rate needed to fund the budget. In that order. Every year. The argument is over how to divide it up.

[wageslave23]

I understand how property taxes work. I'm a CPA and also have my real estate license.  I'm saying that value taxes are already stupid because you don't have the cash to pay for unrealized gains, so property tax increases should be capped.  If you have property tax increase caps in your state then that's wonderful.  Exactly what I think there should be.

If you understand that a 10x increase in property values doesn't usually correspond to a 10x increase in property taxes, why in the world are you using a hypothetical to the contrary as an argument against property taxation?

Our state has caps on overall levy increases (which creates its own set of problems when local jurisdictions have no other significant taxing authority), but what we absolutely don't have is differential tax rates based on how long the property has been in your family. Those are pure nonsense.

Because we are talking about tax increases being justified by increases in home values.  I guess I could have used actual values but I didn't know someone would pick apart the details.  I bought a house for 135k when the property taxes were 4200. The house is now worth about 230k and the property taxes are 7400. Sorry my ratio was off a little.  I still believe property tax increases should be based on inflation. 

And I never said that there should be two different tax rates. Thats a different topic.

ETA - my whole point is property value increases should be irrelevant to property tax increases . Property taxes should be based on the state and local government budgets which should only increase with inflation.

So no new or expanded services ever in wageslave's locality. And if the low taxes work and growth happens, then poorly maintained everything and a less and less capable government over time.

ETA: aside from the fact that's literally what happens in most places, at least with regards to local property taxes. The assessor does its thing, then the budgets are set, then they figure out the tax rate needed to fund the budget. In that order. Every year. The argument is over how to divide it up.

I think you are getting off track. People buy a home in an area based on what they can afford. Including property taxes. They should have a reasonable expectation that property taxes will increase at a moderate rate each year with inflation as all things do. If your property taxes jump a lot more than that, then I think those homeowners have a legitimate reason to be pissed. Other posters have justified huge property tax increases based on increased home values.  I think that is bullshit and irrelevant.  In theory growth should supply new tax revenue and fund expansion of infrastructure.

[GilesMM]

I guess sure don't complain about property taxes. But then you should also send the IRS a check for all your unrealized stock gains.

But 250-500k of capital gains on a house is tax free upon sale. Not to mention that capital gains tax on stock earnings goes to the IRS, while property taxes goes to the city/state for city or county services. I fail to see how this could be related at all.

I'll spell it out:

The tax laws are written so that you don't pay taxes on money that you don't yet have.  So when stocks go up 10x, you aren't forced to sell or borrow against them in order to pay taxes on money you don't have. The same should be true for property taxes. Just because you bought a house for $100k and it went up to $1M value doesn't mean that you have the ability to pay 10x the original property taxes. If anything, the state could charge capital gains tax on the gain when you sell it. That would make more sense because then you'd actually have the money.  People on a fixed budget shouldn't be forced to sell their long-term home just because politicians don't know how to stick to a budget. Inflation adjustments each year should be plenty.

Some state DO charge cap gains tax on property sales with gains - California withholds it at closing unless you are trading/swapping/buying something else.  I've paid it twice. Ouch.

[Log]

I guess sure don't complain about property taxes. But then you should also send the IRS a check for all your unrealized stock gains.

But 250-500k of capital gains on a house is tax free upon sale. Not to mention that capital gains tax on stock earnings goes to the IRS, while property taxes goes to the city/state for city or county services. I fail to see how this could be related at all.

I'll spell it out:

The tax laws are written so that you don't pay taxes on money that you don't yet have.  So when stocks go up 10x, you aren't forced to sell or borrow against them in order to pay taxes on money you don't have. The same should be true for property taxes. Just because you bought a house for $100k and it went up to $1M value doesn't mean that you have the ability to pay 10x the original property taxes. If anything, the state could charge capital gains tax on the gain when you sell it. That would make more sense because then you'd actually have the money.  People on a fixed budget shouldn't be forced to sell their long-term home just because politicians don't know how to stick to a budget. Inflation adjustments each year should be plenty.

If you believe the only purpose of property taxes is to raise revenue, then sure. We could just get rid of property taxes entirely, maybe all municipal governments could be funded by sales tax, or even local income tax! ...but this completely misses the other argument in favor of property taxes I made yesterday - to incentivize the efficient use of valuable (and limited) land.

To let people own land in perpetuity without paying back anything to the public good would just be bad policy. Your use of your land effects everyone else who lives around it. The opportunity cost to society for a low-value land use on high-value land is massive. Taxing land in proportion to its value is a smart way to incentivize people to use their land in a way that provides value - i.e., housing more people by building a rental unit.

(Again, this is also all an argument for replacing property taxes with land value taxes, because taxing land-owners more for building higher value improvements is counter-productive.)

[wageslave23]

I guess sure don't complain about property taxes. But then you should also send the IRS a check for all your unrealized stock gains.

But 250-500k of capital gains on a house is tax free upon sale. Not to mention that capital gains tax on stock earnings goes to the IRS, while property taxes goes to the city/state for city or county services. I fail to see how this could be related at all.

I'll spell it out:

The tax laws are written so that you don't pay taxes on money that you don't yet have.  So when stocks go up 10x, you aren't forced to sell or borrow against them in order to pay taxes on money you don't have. The same should be true for property taxes. Just because you bought a house for $100k and it went up to $1M value doesn't mean that you have the ability to pay 10x the original property taxes. If anything, the state could charge capital gains tax on the gain when you sell it. That would make more sense because then you'd actually have the money.  People on a fixed budget shouldn't be forced to sell their long-term home just because politicians don't know how to stick to a budget. Inflation adjustments each year should be plenty.

If you believe the only purpose of property taxes is to raise revenue, then sure. We could just get rid of property taxes entirely, maybe all municipal governments could be funded by sales tax, or even local income tax! ...but this completely misses the other argument in favor of property taxes I made yesterday - to incentivize the efficient use of valuable (and limited) land.

To let people own land in perpetuity without paying back anything to the public good would just be bad policy. Your use of your land effects everyone else who lives around it. The opportunity cost to society for a low-value land use on high-value land is massive. Taxing land in proportion to its value is a smart way to incentivize people to use their land in a way that provides value - i.e., housing more people by building a rental unit.

(Again, this is also all an argument for replacing property taxes with land value taxes, because taxing land-owners more for building higher value improvements is counter-productive.)

Shouldn't the tax burden on undeveloped land be less than multi unit buildings.  I would think land just sitting there doesn't cost the town any tax money.  Whereas a property with many people living there will need more roads, more schools, police, fire, sanitation, etc.

[seattlecyclone]

If you have a big piece of empty land sitting between two major neighborhoods, this imposes a cost on everyone traveling between the two. The road needs to be longer (more pavement cost), the travel time is longer, the amount of pipe you need to connect these two areas to the unified water/sewer system is higher, the amount of labor you need to hire for the school bus system is higher, and on and on. Your decision on what to do with your land is not inherently neutral to your neighbors. It's very reasonable to tax these externalities.

[Sanitary Stache]

@Log is doing a great job explaining how property taxes work in concert with exclusionary zoning to benefit the wealthy (and primarily white) ruling class.

The more I read here, the more concrete becomes my understanding that “protecting property value” means social and government policy intended to benefit the rich at the expense of the poor.

Lots of good points about how people can be economically vulnerable across the wealth class spectrum, but we shouldn’t forget that the trauma experienced by those at the bottom of the spectrum is far higher than by those at the top of the spectrum.

Ideally we would have a society that does a better job of care at all ages and economic means, getting there is certainly going to hurt for some people. Fixing our property valuation and zoning restrictions is a necessary step to realizing that society where old people can live in dignities and no one of any age has to live in illegal street camps or the back of a car (unless they want to).

I like the idea of a land value tax. I think it makes sense to think of capital gains tax separately. And I don’t think the market value of peoples invested wealth should be taxed. The value of investments should be taxed though, I would just want to see it don’t based on an auditors valuation using assumptions set conservatively and only for individuals with very high company stock holdings.

[GilesMM]

@Log is doing a great job explaining how property taxes work in concert with exclusionary zoning to benefit the wealthy (and primarily white) ruling class.

The more I read here, the more concrete becomes my understanding that “protecting property value” means social and government policy intended to benefit the rich at the expense of the poor.

Lots of good points about how people can be economically vulnerable across the wealth class spectrum, but we shouldn’t forget that the trauma experienced by those at the bottom of the spectrum is far higher than by those at the top of the spectrum.

Ideally we would have a society that does a better job of care at all ages and economic means, getting there is certainly going to hurt for some people. Fixing our property valuation and zoning restrictions is a necessary step to realizing that society where old people can live in dignities and no one of any age has to live in illegal street camps or the back of a car (unless they want to).

I like the idea of a land value tax. I think it makes sense to think of capital gains tax separately. And I don’t think the market value of peoples invested wealth should be taxed. The value of investments should be taxed though, I would just want to see it don’t based on an auditors valuation using assumptions set conservatively and only for individuals with very high company stock holdings.

What steps will you be taking to make changes locally? 

[Ron Scott]

@Log is doing a great job explaining how property taxes work in concert with exclusionary zoning to benefit the wealthy (and primarily white) ruling class.

The more I read here, the more concrete becomes my understanding that “protecting property value” means social and government policy intended to benefit the rich at the expense of the poor.

Lots of good points about how people can be economically vulnerable across the wealth class spectrum, but we shouldn’t forget that the trauma experienced by those at the bottom of the spectrum is far higher than by those at the top of the spectrum.

Ideally we would have a society that does a better job of care at all ages and economic means, getting there is certainly going to hurt for some people. Fixing our property valuation and zoning restrictions is a necessary step to realizing that society where old people can live in dignities and no one of any age has to live in illegal street camps or the back of a car (unless they want to).

I like the idea of a land value tax. I think it makes sense to think of capital gains tax separately. And I don’t think the market value of peoples invested wealth should be taxed. The value of investments should be taxed though, I would just want to see it don’t based on an auditors valuation using assumptions set conservatively and only for individuals with very high company stock holdings.

Yes, and NIMBYism is an ever-present feature of blue states, especially in wealthier areas, so this is certainly a bipartisan sport. A classic NIMBY strategy is to OVERTAX. Drive up school taxes so high only the wealthy can afford to live there. Do it long enough and you’re guaranteed to have nice neighborhoods segregated by race and economic status.

I have never liked the idea of taxing people as an approach to dealing with “inequality”. In addition to being a NIMBY tactic that works in reverse, it seems backward. Rather than lifting some up we decide to drag others down? And the notion that taxing the wealthy will generate enough money to fund social programs that actually work? Don’t think so…

[Chris Pascale]

You do realize that if someone bought their house in the 1950s, they are now 90+ years old if even still alive? Also, please explain "the money is there." Where is "the money"? You mean the equity in the house? The equity that only equals cash if one sells or takes out a HELOC or mortgage on the home? If that is what you mean, where do these seniors get the cash to make the monthly payments on the loan? Not feasible for most of our elders. My stepmother,age 82, is now having to tap her available cash to pay for care for my father, now 92. Things aren't so simple as some are claiming it to be. Most elderly people are not millionaires. Check out the monthly payment sometime on assisted living or nursing homes. Seniors are best off financially if they can manage to remain in their mortgage -free homes until the end. Should they be forced out due to property taxes? If my father had to move now,it would kill him.

You're right. I'm specifically talking about a 90-year-old. My grandmother lived on her own until age 92, and I have a neighbor who did about the same.

What I mean by "the money is there," is exactly how you interpreted (and also why my not everything is about money point should not be left out of what I'm saying).

THE PART ABOUT MONEY: They bought a home for $5,000 and have unrealized appreciation that could be tapped into.
 - My grandmother downsized to better support herself when she was in her 70's
 - My neighbors are still in their home

THE PART ABOUT NOT-MONEY: I don't want my neighbors to leave, and am glad there's a tax-reduction program for lower-income, elderly, and veteran households. But, just as my neighbors made this community better, property taxes paid into a community benefit everyone. Good schools make for good neighbors. Clean, safe streets make for better revenue in the form of people coming to spend their money.

I've qualified for significant tax reductions in the past for being low-income and us both being disabled vets (instead of $10,000 I paid $2,700). Aside from improving the property, we made the community a better place by joining the school's SEPTA board, volunteering at the firehouse, coaching little league, and providing 4 good students (behaviorally and academically) to the school system - 2 of whom were state-ranked HS athletes.

Tax breaks can make a lot of sense, but there is an item in some older homeowners' portfolios with significant cash value.

They don't have to borrow or sell; they can rent out a room to someone they know and trust. Where I live, they'd get $1,000 a month. This could be done with a relative, like a newly divorced niece/nephew, a recently-graduated grandchild. This would not just provide cash, but other possibly-more-needed help, like cooking, cleaning, and transportation.

[coppertop]

My opinion, which is an unpopular one, is that we should abandon property taxes altogether.  Taxation should be on income.  Income is a number that is easy to calculate, whereas the value of one's real estate is based on formulas and projections etc. that is someone's idea of what a property is worth.  I appealed the assessment value of my home last year and was granted some relief without having to prove a thing.  This tells me that these numbers are basically an idea and not something concrete that we can hang our hats on.  If we taxed for schools and municipal expenses based on actual income, then no one would be forced to sell their homes or go to extreme lengths to come up with the cash to pay the tax because they were cash poor.  This would affect someone who may have been laid off or can't work for other reasons and not just retirees. I may not have stated my position all that well, but I think you can figure out what I am trying to say.

[Cassie]

I can’t believe some of you think seniors should be forced out of their homes because they are on a fixed income or should take on debt. What is wrong with you people?? You will be in the same situation someday and it will come sooner than you think.  Rent in many places has skyrocketed. If I had to rent I would have to leave the state and my friends, kids and support system is here. 

Luckily Nevada is the land of low taxes and property taxes figure in the age of the property. When I owned my house I paid 800/year for a 70 year old house worth 400k. Now in a 43 year old condo I pay 400/year and it’s worth 250k.

[Sanitary Stache]

@Log is doing a great job explaining how property taxes work in concert with exclusionary zoning to benefit the wealthy (and primarily white) ruling class.

The more I read here, the more concrete becomes my understanding that “protecting property value” means social and government policy intended to benefit the rich at the expense of the poor.

Lots of good points about how people can be economically vulnerable across the wealth class spectrum, but we shouldn’t forget that the trauma experienced by those at the bottom of the spectrum is far higher than by those at the top of the spectrum.

Ideally we would have a society that does a better job of care at all ages and economic means, getting there is certainly going to hurt for some people. Fixing our property valuation and zoning restrictions is a necessary step to realizing that society where old people can live in dignities and no one of any age has to live in illegal street camps or the back of a car (unless they want to).

I like the idea of a land value tax. I think it makes sense to think of capital gains tax separately. And I don’t think the market value of peoples invested wealth should be taxed. The value of investments should be taxed though, I would just want to see it don’t based on an auditors valuation using assumptions set conservatively and only for individuals with very high company stock holdings.

What steps will you be taking to make changes locally?

Last week I went through our zoning laws and identified every exclusionary law in there and started describing why it is exclusionary and who benefits from it. I intend to propose a revised zoning ordinance which eliminates single family residence only districts and reduces all setbacks to 5 feet. A really radical change that will very clearly allow the perceived reduction in “property value” for singletons and couples who currently sit on 2 acre lots within walking distance of all amenities.

[Sanitary Stache]

I have never liked the idea of taxing people as an approach to dealing with “inequality”. In addition to being a NIMBY tactic that works in reverse, it seems backward. Rather than lifting some up we decide to drag others down? And the notion that taxing the wealthy will generate enough money to fund social programs that actually work? Don’t think so…

Taxes seem like the most powerful tool available to a State to address inequality of wealth.  When income taxes were higher, pre 1970s, there was less income inequality.  It is pretty apparent that property owners, now and throughout history, have had an advantage over non owners.  When the State uses tools to protect that property ownership, they should also use tools to ensure hoarding of property doesn't occur. 

@Ron Scott I thought you were optimistic about the current state of society, especially regarding how dramatically living conditions have improved for people in recent history.  I wouldn't have expected you to discount the value of "social programs that actually work".  Because social programs do actually work, especially widely used and well funded social programs like employer sponsored health insurance, social security and the Federal Highway Administration.  There is plenty of money that could be raised, or kept, by the government to increase funding for other valuable social programs that would also work better with more funding.

Like NIMBYism, underfunding social programs and then claiming they don't work is a hallmark of the wealthy class.

[Ron Scott]

@Sanitary Stache: re-read my post. I am saying that you will not raise enough money. Social programs that actually work are expensive.

I don’t even know what percentage of Americans pay federal income tax anymore. But it’s low.

And yes, I am optimistic about the future as I have said. I am tired of the culture wars AND the class was, but I am optimistic…

[Log]

...The more I read here, the more concrete becomes my understanding that “protecting property value” means social and government policy intended to benefit the rich at the expense of the poor...

And it's all especially despicable when you consider how we all go along with the idea that access to "good schools" is auctioned through the real estate market. When segregating municipalities by wealth goes along with segregating schools by wealth, we've created a real fucked up system.

///

@Cassie, I urge you to actually read the thread instead of putting up a strawman argument that has already been rebutted. It's too easy and convenient to ignore an argument that you dislike by claiming that the people making it are evil.

[NaN]

Most elderly people are not millionaires.

Very true. The ones who are, though? They should generally be expected to pay property tax at the same rate as their 30-year-old neighbor who just bought their first home. That 30-year-old just scraped together a six-figure down payment, is currently paying a mortgage at >7%, is probably going to be paying a bunch of money for daycare because few can afford to buy a house these days on just a single income. Now you want them to pay double property tax, all so their elderly millionaire neighbor doesn't have to suffer the indignity of reducing their kids' inheritance by borrowing against their home equity (or moving into a smaller home, or selling their back yard to a developer, or any of the other things @Log mentioned) to fund their million-dollar-home lifestyle? Nah. Count me out.

Plus, it's not either/ or, it's a sliding scale.  I live in California, and my kid's elementary school district has some homes worth $2.5-3M.
I have friends in that neighborhood whose house is worth $2-2.5 million.  Their annual property taxes?  $1249.
The house across the street that sold last year?  $27,000.

I'm sorry, but that is not ok.  Meanwhile our teachers cannot afford to live here.

California allows you to move and downsize and keep your tax basis.  I personally like the idea of deferring 1/2 of the owed taxes until you die.  Leave the $2.5M house to the kids?  Oh, but you have 20 years x 13,000 dollars in back taxes?  Gotta pay that first.

Yeah, I agree that that is not okay. However, the problem has nothing to do with property taxes. It has to do with out of control housing appreciation due to low interest rates and lack of general supply. Houses appreciated across the board, not just in rich neighborhoods.

To put a hypothesis to the test, that is "Wealthy areas of my city get away with paying less in tax because of their home appreciation", I used my local county assessor website to find the 'assessed value' for ten properties and compared it against the Zillow estimate, both in a wealthy area of the city ($1.7M average home Zillow estimate) and a lower priced area of my city ($500k average home Zillow estimate). It turns out, at least for my random sample of 10 homes, both areas had an average factor of 2.1 larger in Zillow estimates than assessed value. Turns out, the hypothesis is not correct, that the two areas of this city are, ratio wise, all above the assessed county value by about roughly the same amount.

What my quick test shows is that home prices have gone up across the board. It is not just the wealthy neighborhoods in situations where the person next door might pay a lot less taxes than a new home buyer to the area. It is also in areas of town with more affordable options.

I don't think solution is to change tax laws such as Prop 13, but I'm not sure what the solution is.

[Log]

Most elderly people are not millionaires.

Very true. The ones who are, though? They should generally be expected to pay property tax at the same rate as their 30-year-old neighbor who just bought their first home. That 30-year-old just scraped together a six-figure down payment, is currently paying a mortgage at >7%, is probably going to be paying a bunch of money for daycare because few can afford to buy a house these days on just a single income. Now you want them to pay double property tax, all so their elderly millionaire neighbor doesn't have to suffer the indignity of reducing their kids' inheritance by borrowing against their home equity (or moving into a smaller home, or selling their back yard to a developer, or any of the other things @Log mentioned) to fund their million-dollar-home lifestyle? Nah. Count me out.

Plus, it's not either/ or, it's a sliding scale.  I live in California, and my kid's elementary school district has some homes worth $2.5-3M.
I have friends in that neighborhood whose house is worth $2-2.5 million.  Their annual property taxes?  $1249.
The house across the street that sold last year?  $27,000.

I'm sorry, but that is not ok.  Meanwhile our teachers cannot afford to live here.

California allows you to move and downsize and keep your tax basis.  I personally like the idea of deferring 1/2 of the owed taxes until you die.  Leave the $2.5M house to the kids?  Oh, but you have 20 years x 13,000 dollars in back taxes?  Gotta pay that first.

Yeah, I agree that that is not okay. However, the problem has nothing to do with property taxes. It has to do with out of control housing appreciation due to low interest rates and lack of general supply. Houses appreciated across the board, not just in rich neighborhoods.

To put a hypothesis to the test, that is "Wealthy areas of my city get away with paying less in tax because of their home appreciation", I used my local county assessor website to find the 'assessed value' for ten properties and compared it against the Zillow estimate, both in a wealthy area of the city ($1.7M average home Zillow estimate) and a lower priced area of my city ($500k average home Zillow estimate). It turns out, at least for my random sample of 10 homes, both areas had an average factor of 2.1 larger in Zillow estimates than assessed value. Turns out, the hypothesis is not correct, that the two areas of this city are, ratio wise, all above the assessed county value by about roughly the same amount.

What my quick test shows is that home prices have gone up across the board. It is not just the wealthy neighborhoods in situations where the person next door might pay a lot less taxes than a new home buyer to the area. It is also in areas of town with more affordable options.

I don't think solution is to change tax laws such as Prop 13, but I'm not sure what the solution is.

There is a documented "assessment gap" that favors more wealthy homeowners, regardless of any gap in appreciation.

These people who've "suffered" from out of control asset appreciation would be much better served by land-use reform than by property tax subsidies. Instead of these tax subsidies that offer NO generalized good to the public, what if we raised the taxes to what they should be, and then used that revenue to offer subsidies for these people to build ADUs or convert their garages into studio apartments? We'd spend the same amount of tax dollars, keep these people in their homes with their newfound rental income, AND we'd make a dent in the shortage that caused the prices to fly so out of control in the first place.

Prop 13 may have been a well-intentioned policy, and it is, to it's credit, effective at addressing this one particular social ill that we would like to avoid. But it is pure lunacy at this point to continue to think that it is the best or most effective way of addressing that particular social ill. And even if we were to take it as ordained by God himself that we can't increase the property taxes of little-old-ladies-on-fixed-incomes... WHY OH GOD WHY are we offering the same subsidy to land speculators with massive portfolios of greenfield plots and surface parking lots??? And if the subsidy is about keeping little-old-ladies-on-fixed-incomes in their homes, what is the public interest in handing this subsidy to the little-old-lady's heirs?? The policy is a solution to a real problem, but it is a BAD solution. We can and should do better.

[NaN]

Most elderly people are not millionaires.

Very true. The ones who are, though? They should generally be expected to pay property tax at the same rate as their 30-year-old neighbor who just bought their first home. That 30-year-old just scraped together a six-figure down payment, is currently paying a mortgage at >7%, is probably going to be paying a bunch of money for daycare because few can afford to buy a house these days on just a single income. Now you want them to pay double property tax, all so their elderly millionaire neighbor doesn't have to suffer the indignity of reducing their kids' inheritance by borrowing against their home equity (or moving into a smaller home, or selling their back yard to a developer, or any of the other things @Log mentioned) to fund their million-dollar-home lifestyle? Nah. Count me out.

Plus, it's not either/ or, it's a sliding scale.  I live in California, and my kid's elementary school district has some homes worth $2.5-3M.
I have friends in that neighborhood whose house is worth $2-2.5 million.  Their annual property taxes?  $1249.
The house across the street that sold last year?  $27,000.

I'm sorry, but that is not ok.  Meanwhile our teachers cannot afford to live here.

California allows you to move and downsize and keep your tax basis.  I personally like the idea of deferring 1/2 of the owed taxes until you die.  Leave the $2.5M house to the kids?  Oh, but you have 20 years x 13,000 dollars in back taxes?  Gotta pay that first.

Yeah, I agree that that is not okay. However, the problem has nothing to do with property taxes. It has to do with out of control housing appreciation due to low interest rates and lack of general supply. Houses appreciated across the board, not just in rich neighborhoods.

To put a hypothesis to the test, that is "Wealthy areas of my city get away with paying less in tax because of their home appreciation", I used my local county assessor website to find the 'assessed value' for ten properties and compared it against the Zillow estimate, both in a wealthy area of the city ($1.7M average home Zillow estimate) and a lower priced area of my city ($500k average home Zillow estimate). It turns out, at least for my random sample of 10 homes, both areas had an average factor of 2.1 larger in Zillow estimates than assessed value. Turns out, the hypothesis is not correct, that the two areas of this city are, ratio wise, all above the assessed county value by about roughly the same amount.

What my quick test shows is that home prices have gone up across the board. It is not just the wealthy neighborhoods in situations where the person next door might pay a lot less taxes than a new home buyer to the area. It is also in areas of town with more affordable options.

I don't think solution is to change tax laws such as Prop 13, but I'm not sure what the solution is.

There is a documented "assessment gap" that favors more wealthy homeowners, regardless of any gap in appreciation.

These people who've "suffered" from out of control asset appreciation would be much better served by land-use reform than by property tax subsidies. Instead of these tax subsidies that offer NO generalized good to the public, what if we raised the taxes to what they should be, and then used that revenue to offer subsidies for these people to build ADUs or convert their garages into studio apartments? We'd spend the same amount of tax dollars, keep these people in their homes with their newfound rental income, AND we'd make a dent in the shortage that caused the prices to fly so out of control in the first place.

Prop 13 may have been a well-intentioned policy, and it is, to it's credit, effective at addressing this one particular social ill that we would like to avoid. But it is pure lunacy at this point to continue to think that it is the best or most effective way of addressing that particular social ill. And even if we were to take it as ordained by God himself that we can't increase the property taxes of little-old-ladies-on-fixed-incomes... WHY OH GOD WHY are we offering the same subsidy to land speculators with massive portfolios of greenfield plots and surface parking lots??? And if the subsidy is about keeping little-old-ladies-on-fixed-incomes in their homes, what is the public interest in handing this subsidy to the little-old-lady's heirs?? The policy is a solution to a real problem, but it is a BAD solution. We can and should do better.

That may be true, though I will have to find some time to dig into the study. Not saying I don't trust it but the article at first glance seemed low on info and more just quotes.

However, considering in my city the homes that used to go for $300k are going for $600k (or more) the new owners are going to pay double on property taxes. That is also a big problem that even if everything was assessed accurately is still there.

My city may not be a national trend, but still, the insane home appreciation due to shortages and low interest also fuels this problem.

[NV Teacher]

Nobody likes taxes but it is what funds community resources.  My property taxes are going up by almost 50% this year.  The entire increase is going to the school district.  There are probably a thousand new homes, condos, and apartments going in and those kids need schools.  Unfortunately developers are not required to pay impact fees for all this construction so the existing residents are forced to foot the bill.

[NaN]

There is a documented "assessment gap" that favors more wealthy homeowners, regardless of any gap in appreciation.

This is probably the better data source link from the University of Chicago Property Tax Project. That's an interesting data set that can produce reports for a lot of counties.

[Ron Scott]

These people who've "suffered" from out of control asset appreciation would be much better served by land-use reform than by property tax subsidies. Instead of these tax subsidies that offer NO generalized good to the public, what if we raised the taxes to what they should be, and then used that revenue to offer subsidies for these people to build ADUs or convert their garages into studio apartments?

LOL

Let me get this straight: You want to double the property taxes for people who just spent their fortune on a home and then allow the neighbors to rent garage conversions to whoever for a price that covers the difference? Maybe the renters could use the front lawn for swing sets and BBQs? And you think the politicians in this town are going to be able to get home in one piece?

Dude, you do know there are more guns than people in this country don’t you?

[Log]

These people who've "suffered" from out of control asset appreciation would be much better served by land-use reform than by property tax subsidies. Instead of these tax subsidies that offer NO generalized good to the public, what if we raised the taxes to what they should be, and then used that revenue to offer subsidies for these people to build ADUs or convert their garages into studio apartments?

LOL

Let me get this straight: You want to double the property taxes for people who just spent their fortune on a home and then allow the neighbors to rent garage conversions to whoever for a price that covers the difference? Maybe the renters could use the front lawn for swing sets and BBQs? And you think the politicians in this town are going to be able to get home in one piece?

Dude, you do know there are more guns than people in this country don’t you?

...
And some people still don't understand the fact that single family zoning and excessive parking requirements are just an elaborate form of classist segregation? You just said it all out loud.

Cartels of wealthy folks carve out their own little municipalities where they have a voting majority so they can vote anyone out of office who doesn't perpetuate policies that will keep out the poors. Then they realize that good roads and schools and libraries and shit are actually expensive, and funding them with an extremely low population density means everyone has to pay a larger share, so we all are forced to listen to them complain about taxes for the rest of eternity.

Maybe, just maybe, renters are actually people, who deserve to have access to good public services, nice neighborhoods, and a government that looks out for their interests as well. More and denser housing is a win/win/win. Good for the privileged elite who want lower taxes. Good for the renters who need cheaper housing. Good for society when people of different socio-economic classes actually interact as neighbors instead of constantly dehumanizing each other.

[Ron Scott]

These people who've "suffered" from out of control asset appreciation would be much better served by land-use reform than by property tax subsidies. Instead of these tax subsidies that offer NO generalized good to the public, what if we raised the taxes to what they should be, and then used that revenue to offer subsidies for these people to build ADUs or convert their garages into studio apartments?

LOL

Let me get this straight: You want to double the property taxes for people who just spent their fortune on a home and then allow the neighbors to rent garage conversions to whoever for a price that covers the difference? Maybe the renters could use the front lawn for swing sets and BBQs? And you think the politicians in this town are going to be able to get home in one piece?

Dude, you do know there are more guns than people in this country don’t you?

...
And some people still don't understand the fact that single family zoning and excessive parking requirements are just an elaborate form of classist segregation? You just said it all out loud.

Cartels of wealthy folks carve out their own little municipalities where they have a voting majority so they can vote anyone out of office who doesn't perpetuate policies that will keep out the poors. Then they realize that good roads and schools and libraries and shit are actually expensive, and funding them with an extremely low population density means everyone has to pay a larger share, so we all are forced to listen to them complain about taxes for the rest of eternity.

Maybe, just maybe, renters are actually people, who deserve to have access to good public services, nice neighborhoods, and a government that looks out for their interests as well. More and denser housing is a win/win/win. Good for the privileged elite who want lower taxes. Good for the renters who need cheaper housing. Good for society when people of different socio-economic classes actually interact as neighbors instead of constantly dehumanizing each other.

Look, it seems like your heart is in a good place, but in all honesty the political labels and condescending remarks do not change minds. Class wars…culture wars…they’re all about making “us” feel connected by demonizing “them”. This stuff convinces no one.

We have real political challenges but at the local levels especially we’re still basically democratic. You need votes and the room you need to read is not on this forum—its at the state and local level. And they are not going to adopt an idea like yours.

You have the ability to try it. Write your local and state leaders and see what they say and do. I’ll bet you could draft the letter and get everything in the mail in an afternoon. If you care give it a shot and let us know the response.

[Sanitary Stache]

These people who've "suffered" from out of control asset appreciation would be much better served by land-use reform than by property tax subsidies. Instead of these tax subsidies that offer NO generalized good to the public, what if we raised the taxes to what they should be, and then used that revenue to offer subsidies for these people to build ADUs or convert their garages into studio apartments?

LOL

Let me get this straight: You want to double the property taxes for people who just spent their fortune on a home and then allow the neighbors to rent garage conversions to whoever for a price that covers the difference? Maybe the renters could use the front lawn for swing sets and BBQs? And you think the politicians in this town are going to be able to get home in one piece?

Dude, you do know there are more guns than people in this country don’t you?

...
And some people still don't understand the fact that single family zoning and excessive parking requirements are just an elaborate form of classist segregation? You just said it all out loud.

Cartels of wealthy folks carve out their own little municipalities where they have a voting majority so they can vote anyone out of office who doesn't perpetuate policies that will keep out the poors. Then they realize that good roads and schools and libraries and shit are actually expensive, and funding them with an extremely low population density means everyone has to pay a larger share, so we all are forced to listen to them complain about taxes for the rest of eternity.

Maybe, just maybe, renters are actually people, who deserve to have access to good public services, nice neighborhoods, and a government that looks out for their interests as well. More and denser housing is a win/win/win. Good for the privileged elite who want lower taxes. Good for the renters who need cheaper housing. Good for society when people of different socio-economic classes actually interact as neighbors instead of constantly dehumanizing each other.

Look, it seems like your heart is in a good place, but in all honesty the political labels and condescending remarks do not change minds. Class wars…culture wars…they’re all about making “us” feel connected by demonizing “them”. This stuff convinces no one.

We have real political challenges but at the local levels especially we’re still basically democratic. You need votes and the room you need to read is not on this forum—its at the state and local level. And they are not going to adopt an idea like yours.

You have the ability to try it. Write your local and state leaders and see what they say and do. I’ll bet you could draft the letter and get everything in the mail in an afternoon. If you care give it a shot and let us know the response.

I learned last night from my local state representative who I talked to in person  that my state legislature just passed a law overriding all local zoning and allowing up to 4 units per lot in any area.

[EvenSteven]

These people who've "suffered" from out of control asset appreciation would be much better served by land-use reform than by property tax subsidies. Instead of these tax subsidies that offer NO generalized good to the public, what if we raised the taxes to what they should be, and then used that revenue to offer subsidies for these people to build ADUs or convert their garages into studio apartments?

LOL

Let me get this straight: You want to double the property taxes for people who just spent their fortune on a home and then allow the neighbors to rent garage conversions to whoever for a price that covers the difference? Maybe the renters could use the front lawn for swing sets and BBQs? And you think the politicians in this town are going to be able to get home in one piece?

Dude, you do know there are more guns than people in this country don’t you?

I like how this is dropped in like it would be outrageously absurd to have a BBQ or a swing set on your lawn. Heaven forfend! Call the HOA!!

[Cassie]

Nobody likes taxes but it is what funds community resources.  My property taxes are going up by almost 50% this year.  The entire increase is going to the school district.  There are probably a thousand new homes, condos, and apartments going in and those kids need schools.  Unfortunately developers are not required to pay impact fees for all this construction so the existing residents are forced to foot the bill.

I don’t know if property taxes in Nevada are by county or state level but in Washoe county they can’t go up by more than 3% per year. Do you still live in Nevada?

[Dicey]

You should feel sympathy as the increase in net worth is not a liquid one while the property taxes are due immediately.  Asking someone to sell or borrow against their home to pay property taxes is part of the reason Calif enacted Prop 13. Does you area not limit the annual increase on property taxes?

Hahaha, if you dig into it, Prop. 13 was created to protect commercial property owners (and still does, big time). That grandma-has-to-sell-her-home-to-pay-her-property-taxes was mostly spin.

[Dicey]

These people who've "suffered" from out of control asset appreciation would be much better served by land-use reform than by property tax subsidies. Instead of these tax subsidies that offer NO generalized good to the public, what if we raised the taxes to what they should be, and then used that revenue to offer subsidies for these people to build ADUs or convert their garages into studio apartments?

LOL

Let me get this straight: You want to double the property taxes for people who just spent their fortune on a home and then allow the neighbors to rent garage conversions to whoever for a price that covers the difference? Maybe the renters could use the front lawn for swing sets and BBQs? And you think the politicians in this town are going to be able to get home in one piece?

Dude, you do know there are more guns than people in this country don’t you?

...
And some people still don't understand the fact that single family zoning and excessive parking requirements are just an elaborate form of classist segregation? You just said it all out loud.

Cartels of wealthy folks carve out their own little municipalities where they have a voting majority so they can vote anyone out of office who doesn't perpetuate policies that will keep out the poors. Then they realize that good roads and schools and libraries and shit are actually expensive, and funding them with an extremely low population density means everyone has to pay a larger share, so we all are forced to listen to them complain about taxes for the rest of eternity.

Maybe, just maybe, renters are actually people, who deserve to have access to good public services, nice neighborhoods, and a government that looks out for their interests as well. More and denser housing is a win/win/win. Good for the privileged elite who want lower taxes. Good for the renters who need cheaper housing. Good for society when people of different socio-economic classes actually interact as neighbors instead of constantly dehumanizing each other.

Look, it seems like your heart is in a good place, but in all honesty the political labels and condescending remarks do not change minds. Class wars…culture wars…they’re all about making “us” feel connected by demonizing “them”. This stuff convinces no one.

We have real political challenges but at the local levels especially we’re still basically democratic. You need votes and the room you need to read is not on this forum—its at the state and local level. And they are not going to adopt an idea like yours.

You have the ability to try it. Write your local and state leaders and see what they say and do. I’ll bet you could draft the letter and get everything in the mail in an afternoon. If you care give it a shot and let us know the response.

I learned last night from my local state representative who I talked to in person  that my state legislature just passed a law overriding all local zoning and allowing up to 4 units per lot in any area.

Some folks comments indicate a possible lack of awareness of CA's SB 9, which took effect January 1, 2022.

https://focus.senate.ca.gov/sb9

[Dicey]

Tiny Case Study:

We paid $425k for a small CA condo in early April, 2022.

When mortgage rates spiked immediately after closing, the seller of the complex panicked and sold the last 3 identical units for $381k.

We applied to have our property taxes reduced, using those comps, and our appeal was approved. Forever after, our property tax increases will be calculated on this lower basis, per the state's own rules.

While it sucks that taxes are so high, we love that the increases are predictable. One can also mitigate them by buying a sensible property and staying in it for many years, thus becoming the taxpayer younger buyers are complaining about. Also, learning the system and playing it by their rules can also be advantageous, as illustrated in this tiny example.

One point I haven't seen mentioned is that renters pay property taxes, too. They just pay them indirectly, in the form of higher rents. Anyone who says they don't pay property taxes doesn't get how it works. You just pay them in monthly installments, not twice a year.

[dandarc]

Tiny Case Study:

We paid $425k for a small CA condo in early April, 2022.

When mortgage rates spiked immediately after closing, the seller of the complex panicked and sold the last 3 identical units for $381k.

We applied to have our property taxes reduced, using those comps, and our appeal was approved. Forever after, our property tax increases will be calculated on this lower basis, per the state's own rules.

While it sucks that taxes are so high, we love that the increases are predictable. One can also mitigate them by buying a sensible property and staying in it for many years, thus becoming the taxpayer younger buyers are complaining about. Also, learning the system and playing it by their rules can also be advantageous, as illustrated in this tiny example.

One point I haven't seen mentioned is that renters pay property taxes, too. They just pay them indirectly, in the form of higher rents. Anyone who says they don't pay property taxes doesn't get how it works. You just pay them in monthly installments, not twice a year.

And renters are often taxed at even higher rates than recently purchasing homeowners to boot, at least vs. assessed values. We really are great at finding ways to stick it to those who can least afford in this country. While some renters truly are choosing to rent vs. buying, I'd wager for most, renting is really the only practical choice.

[seattlecyclone]

I learned last night from my local state representative who I talked to in person  that my state legislature just passed a law overriding all local zoning and allowing up to 4 units per lot in any area.

Washington passed a bill like that this year. I hear California and Oregon have done something similar. Undoubtedly this is the result of more people contacting their legislators, but how does that get started? Zoning deregulation is getting broadly more popular. It starts from advocates sharing their ideas with their friends, neighbors, and even on forums such as this.

If you are talking about the Washington law specifically, I'll put my pedantic hat on and say that this law does not "override all local zoning." It instead requires cities to update their zoning code to allow at least four homes per lot (or two or six depending on how big the city is). Cities have some time to implement this, and they still have control over most of the details. If they want to limit the height or floor area of the building or require minimum lot sizes and setbacks from the property line that's still allowed, they just can't require more restrictive rules for a fourplex than they do for a detached single-family home.

This still allows the "cartels of wealthy folks" a great deal of control in the cities where they dominate the electorate. If they want to basically put a moratorium on new housing development by saying no new building can be bigger than 1,000 square feet or something, AFAIK that's totally within their purview. What they can't do is say "6,000 square foot mansions are fine but 6,000 square foot fourplexes aren't." I'll call this a step forward. A fourplex is not a public nuisance, there's no good reason to ban one from existing in any residential neighborhood, and plenty of bad reasons.

Let me get this straight: You want to double the property taxes for people who just spent their fortune on a home and then allow the neighbors to rent garage conversions to whoever for a price that covers the difference? Maybe the renters could use the front lawn for swing sets and BBQs? And you think the politicians in this town are going to be able to get home in one piece?

Dude, you do know there are more guns than people in this country don’t you?

I like how this is dropped in like it would be outrageously absurd to have a BBQ or a swing set on your lawn. Heaven forfend! Call the HOA!!

Yep. This sort of nonsense is part of the problem. "To live in this neighborhood, everyone must have at least 20 feet of empty space in front of their house that will be completely wasted except for aesthetically pleasing vegetation. No recreational activities or food crops allowed, and any sort of building is of course out of the question." Well geez, I guess if someone can't afford to buy and waste that much land I guess they can't live there can they? System working as designed.

[Ron Scott]

Let me get this straight: You want to double the property taxes for people who just spent their fortune on a home and then allow the neighbors to rent garage conversions to whoever for a price that covers the difference? Maybe the renters could use the front lawn for swing sets and BBQs? And you think the politicians in this town are going to be able to get home in one piece?

Dude, you do know there are more guns than people in this country don’t you?

I like how this is dropped in like it would be outrageously absurd to have a BBQ or a swing set on your lawn. Heaven forfend! Call the HOA!!

Yep. This sort of nonsense is part of the problem.
[/quote]

Oh so you’re a big shot, huh? A single family home owner? Well now you can just convert your garage into a studio or pay the double tax yourself.

You guys are all over it! Your way or the highway. Run for office!

And people wonder how someone like Trump got elected. OMG…LOL.

[seattlecyclone]

I am a single-family homeowner, yes. I could convert my garage to a studio apartment if I wanted to, but it's full of bikes and tools that I'd have to store somewhere else, and I can afford my property tax just fine, so I'm not really in a hurry to do that.

But I absolutely think my neighbor should be able to do that if they want! And I'd much rather they do that than ask me to subsidize their lifestyle when they can't afford the cost of their home anymore.

I thought Republicans were supposed to be the party of fewer regulations and having less of a welfare state? I guess Trump is all in favor of that though?

[EvenSteven]

Let me get this straight: You want to double the property taxes for people who just spent their fortune on a home and then allow the neighbors to rent garage conversions to whoever for a price that covers the difference? Maybe the renters could use the front lawn for swing sets and BBQs? And you think the politicians in this town are going to be able to get home in one piece?

Dude, you do know there are more guns than people in this country don’t you?

I like how this is dropped in like it would be outrageously absurd to have a BBQ or a swing set on your lawn. Heaven forfend! Call the HOA!!

Yep. This sort of nonsense is part of the problem.

Oh so you’re a big shot, huh? A single family home owner? Well now you can just convert your garage into a studio or pay the double tax yourself.

You guys are all over it! Your way or the highway. Run for office!

And people wonder how someone like Trump got elected. OMG…LOL.

I can't tell how serious this post is. If you see your neighbor out grilling with kids playing on the swing set they set up do you:

A) Grab a case of beer, round up the kids and head over for some burgers and light conversation while the kids play.

or

B) Get terrified that your neighbors are ruining your property value and call the HOA and the cops to punish your neighbor.

And which one of these gets Trump elected?

[Michael in ABQ]

...The more I read here, the more concrete becomes my understanding that “protecting property value” means social and government policy intended to benefit the rich at the expense of the poor...

And it's all especially despicable when you consider how we all go along with the idea that access to "good schools" is auctioned through the real estate market. When segregating municipalities by wealth goes along with segregating schools by wealth, we've created a real fucked up system.

///

@Cassie, I urge you to actually read the thread instead of putting up a strawman argument that has already been rebutted. It's too easy and convenient to ignore an argument that you dislike by claiming that the people making it are evil.

Not every area has school districts sorted discretely by wealth. The city of Albuquerque has a single school district covering the entire city of 560,000 or so with roughly 70,000 students. There are better and worse performing schools within the district - but they all receive the exact same funding. So it really comes down to the population of students. Students from high-income households outperform those in low-income households - for a multitude of reasons that no amount of funding or intervention can totally eliminate. The teachers at the school surrounded by homes that cost $600k get paid the exact same as the teachers in the school surrounded by homes that cost $200k. But the kids coming from the higher-income household almost certainly have two parents at home, those parents probably have a higher education level themselves and therefore value education, and they probably have a relatively stable family life that allows them to focus on school instead of worrying about utilities getting shut off, going hungry, being a victim of crime, etc.

[Chris Pascale]

My opinion, which is an unpopular one, is that we should abandon property taxes altogether.  Taxation should be on income.  Income is a number that is easy to calculate, whereas the value of one's real estate is based on formulas and projections etc. that is someone's idea of what a property is worth.  I appealed the assessment value of my home last year and was granted some relief without having to prove a thing.  This tells me that these numbers are basically an idea and not something concrete that we can hang our hats on.  If we taxed for schools and municipal expenses based on actual income, then no one would be forced to sell their homes or go to extreme lengths to come up with the cash to pay the tax because they were cash poor.  This would affect someone who may have been laid off or can't work for other reasons and not just retirees. I may not have stated my position all that well, but I think you can figure out what I am trying to say.

I can get behind that, but would like to explore other ideas, like tariffs and national sales taxes (more than offset by a basic income), and not basing gains rates on income tax rates, but treating them as unrelated.

A snag here is that property taxes are local, not national.

[Dicey]

There are other forces at play here.  For example, building an ADU from scratch doesn't pencil out,given the current cost of building materials. People are building them for other reasons, such as to carve out a place for their older parents or adult children. But building for the sole purpose of renting doesn't make sense. Therefore, they're not getting built fast enough to make as big an impact as was expected.

[Dancin'Dog]

I protested my assessment this year mainly due to the discrepancy on the block.  My valuation increased 18% in one year (my friend across the street went up 35%).  The other similar sized houses on the block went up 2%, 6%, 7%, & 7%.  After the hearing, the increase was reduced to 10%. So that was worth the time.  If everyone had gone up around the same, I probably would have skipped the hearing. 

Also, there is a state law that allows homeowners 65+ with annual income <$100K to freeze the assessed value.  The income only has to be <$100k in the year that the freeze is requested and never verified again.

Which state is that? 

[Louise]

There are other forces at play here.  For example, building an ADU from scratch doesn't pencil out,given the current cost of building materials. People are building them for other reasons, such as to carve out a place for their older parents or adult children. But building for the sole purpose of renting doesn't make sense. Therefore, they're not getting built fast enough to make as big an impact as was expected.

There are a lot of rules around ADUs where I live. They must be separate units with their own electricity and plumbing. A few years ago, it would cost around $150K to build one. I'm sure it's closer to $200K today. I know of several people who have built them, but they use it for AirBNB income.

[GilesMM]

You should feel sympathy as the increase in net worth is not a liquid one while the property taxes are due immediately.  Asking someone to sell or borrow against their home to pay property taxes is part of the reason Calif enacted Prop 13. Does you area not limit the annual increase on property taxes?

Hahaha, if you dig into it, Prop. 13 was created to protect commercial property owners (and still does, big time). That grandma-has-to-sell-her-home-to-pay-her-property-taxes was mostly spin.

Prop 13 was a grassroots revolt by homeowners for the most part. It was led by anti-tax crackpot Howard Jarvis and overwhelmingly approved by homeowners who feared losing their homes to rising property taxes.  Many businesses and most local Chamber of Commerce were opposed to the populist idea.

[iris lily]

No attacks on billionaires or corporations here. We’re talking about Joe Homeowner, whose largest budget item is tax. Joe Homeowner is being told, if you don’t like it leave.

Does that not apply to all taxes anywhere? If you don't like how high the income taxes are in your jurisdiction, well...two main ways to pay less: either earn less, or move somewhere with lower taxes. If you don't like how high the sales taxes are, you can buy less, or you can move somewhere with lower taxes. Finally, if you don't like how high the property taxes are, you can own less property or you can move somewhere with lower taxes.

Have you seen HELOC rates recently???

I'm sure they've gone up in lockstep with all the other interest rates in our economy. Hell, Vanguard's money market fund is yielding 5.27% these days. Let's consider the stereotypical "house poor" person who is usually used as a poster child for Prop 13: lower income, retired, little wealth other than a paid-off house that has grown to $1 million in value over the past 30+ years since they bought in. If they sell that house and put the money in a safe money market fund, they'll collect $4,392/month in interest. They should be able to rent a pretty nice place for that much, and the amount they'll no longer be paying in property tax, homeowners' insurance, and maintenance can go straight to the bank.
...

And in a few years when rates fall back to earth, they will be out of the street without enough money for rent?  You people seriously are in favor of retired people losing their homes over property taxes?

In the abstract, I’m not sure why retired people are any different from any other people in my expectation that generally one should live within one’s means. I am an old retied person myself.

And keeping grandma in her own home is not always the best solution for grandma, if grandma has a four bedroom 3800 square-foot home that needs continuing maintenance with an accompanying large yard.

Until last year, I lived in a wonderful neighborhood of Victorian homes, and many of those houses were 3000 to 5000 ft.². Yes, there were single seniors living alone in them. One of them is a friend who, I will grant you, is peculiarly attached to his wonderful Victorian home and they will drag him out feet first. It is a nice house but many of those in my neighborhood are nice, his was in a movie with George Clooney. Anyway – he had to take a reverse mortgage to stay in his house because he’s always been low income and his partner died. I think that is a good solution for him , but I’m not sure it’s the best solution for everyone else. He’s still able-bodied in his 80s and can fix stuff on his house, most grannies cannot do that.

[GilesMM]

No attacks on billionaires or corporations here. We’re talking about Joe Homeowner, whose largest budget item is tax. Joe Homeowner is being told, if you don’t like it leave.

Does that not apply to all taxes anywhere? If you don't like how high the income taxes are in your jurisdiction, well...two main ways to pay less: either earn less, or move somewhere with lower taxes. If you don't like how high the sales taxes are, you can buy less, or you can move somewhere with lower taxes. Finally, if you don't like how high the property taxes are, you can own less property or you can move somewhere with lower taxes.

Have you seen HELOC rates recently???

I'm sure they've gone up in lockstep with all the other interest rates in our economy. Hell, Vanguard's money market fund is yielding 5.27% these days. Let's consider the stereotypical "house poor" person who is usually used as a poster child for Prop 13: lower income, retired, little wealth other than a paid-off house that has grown to $1 million in value over the past 30+ years since they bought in. If they sell that house and put the money in a safe money market fund, they'll collect $4,392/month in interest. They should be able to rent a pretty nice place for that much, and the amount they'll no longer be paying in property tax, homeowners' insurance, and maintenance can go straight to the bank.
...

And in a few years when rates fall back to earth, they will be out of the street without enough money for rent?  You people seriously are in favor of retired people losing their homes over property taxes?

In the abstract, I’m not sure why retired people are any different from any other people in my expectation that generally one should live within one’s means. I am an old retied person myself.

And keeping grandma in her own home is not always the best solution for grandma, if grandma has a four bedroom 3800 square-foot home that needs continuing maintenance with an accompanying large yard.

Until last year, I lived in a wonderful neighborhood of Victorian homes, and many of those houses were 3000 to 5000 ft.². Yes, there were single seniors living alone in them. One of them is a friend who, I will grant you, is peculiarly attached to his wonderful Victorian home and they will drag him out feet first. It is a nice house but many of those in my neighborhood are nice, his was in a movie with George Clooney. Anyway – he had to take a reverse mortgage to stay in his house because he’s always been low income and his partner died. I think that is a good solution for him , but I’m not sure it’s the best solution for everyone else. He’s still able-bodied in his 80s and can fix stuff on his house, most grannies cannot do that.

So the idea is to tax the daylights out of granny and drive her into a smaller house, condo, apt or nursing home because most grannies live in huge homes?

[Tempname23]

Haven't read the whole thread, but, there are people that expect to die on the home they live in. The state/county then makes it difficult for them to afford the home they paid for over 30 years. It forces them to sell a home they paid a reasonable price for and were lucky or unlucky that the price got driven up. I always get argument, but I think taxing someones home is a bad way to tax.
 Here's a sad tale, women loses $300k paid off home over $3k tax lien. Gets kicked out of her home and doesn't get $297k equity.
https://www.youtube.com/watch?v=KoV6d_fVGik

[YttriumNitrate]

So it seems the options are:

(1) Force granny to pay the same rates as everyone else;
(2) Force everyone else to pay more to make up for the taxes not paid by granny; or
(3) Reduce/limit funding to schools/services.

Any option you choose makes you a bastard ;-)

[BlueMR2]

So it seems the options are:

(1) Force granny to pay the same rates as everyone else;
(2) Force everyone else to pay more to make up for the taxes not paid by granny; or
(3) Reduce/limit funding to schools/services.

Any option you choose makes you a bastard ;-)

As I've gotten older and watched property taxes rise dramatically, I have also observed that the portion of it that is exploding is the schools.  Nearly 3/4 of my property tax is now just for schools and I have to say the results of the schools are worse than they used to be...  Since throwing more money at the problem is making it worse, it's time to drastically cut school funding.