I'm pretty sure PROP 13 prevents that... We didn't do any permitted additions, like adding square footage.. besides installing a new HVAC system. When we refinanced the appraisal had no effect on our tax basis. Even though that appraisal was higher than our purchase price.
I will let you know... It would suck to get reassessed tax wise... but at least I could write off 25% of of that... Right now I make too much money and PMI isn't a write off at all.
Same could have been said in 2004-2007. I think since 2004-2007 is still fresh in everyone's minds... That we won't bubble up to new heights again. But the market isn't gonna to retreat to new lows either. Could we retrace to 2011 lows... maybe, but not likely.