patrick.net

"There are no inequities! There were fools who overpaid by 200-300% compared to their next door neighbor. You call the inequities ?"

Hilarious. Have you heard of inflation? Prop 13 limits property tax increases to *BELOW* historic inflation. So even if housing were to do nothing more than keep up with historic inflation, long-time owners would still get an unfair tax break over time.

In other words, while "overpaying" for a house could net you higher taxes, even getting a "good deal" today could leave you paying 10x the taxes of your next door neighbor who has lived in the home for 30 years.

Basically, as time goes on, Prop 13 becomes more and more unfair.

First of all, prop 13 is a very powerful political instrument, so you do not just hammer at it head on. I don't know the split of homeowners, but there are tons of business interests behind it who can afford big $$$ lobbying.

How to attack the problem? Start with attacking the smaller, individual homeowners first. The easiest one to start is, attack the inheritance of tax base under prop 13, because it is simply morally WRONG. The inheritance of tax base, as far as I understand it, is only between direct descendants, but not applicable to corporations if a transaction takes place.

People can argue that grandparents need to be kept in their old homes yada yada, but nobody can argue morally that the grandsons need to be kept in grandparents' old homes. There is no moral argument for this, it was just a loophole that got exploited. So closing this loophole is the first step.

Once the tax base cannot be passed on, you immediately free up a bunch of homes, because a lot of these asset-rich cash poor elderly are financially supported by their kids who in return will get the property at a next-to-nothing tax base. Such an amendment will take away incentives from both sides to stay in the old house.

Homeowners will always vote for prop 13, period. In order to win support, you don't attack homeowners as a whole. You attack SOME of the homeowners, uniting the other. For example, if you propose to bring all the old homeowners to a more recently valued property base, say, using neighbor's 1990 valuation as the base instead of 1970's base, that will get a ton more support from newer homeowners like myself who is very envious of the next door neighbor who only pays 1/10 of what I pay. Divide and conquer is the only way of repealing prop 13. Broad repeal will just not happen politically.

In order to win support, you don’t attack homeowners as a whole. You attack SOME of the homeowners, uniting the other.

I agree. Someone once said that the best way to repeal Prop 13 is just to publish everyone's property tax in an easily accessible place.

When the recent buyers see how much more they're paying than their neighbors (10x is quite common) they will definitely have a motive to change things.

BTW, I just added a "quote" link next to every comment to facilitate quoting. In some browsers, including Firefox, you can even select part of the quote and just that piece will get quoted.

BTW, I just added a “quote” link next to every comment to facilitate quoting. In some browsers, including Firefox, you can even select part of the quote and just that piece will get quoted.

It works, just like magic. Cool.

Prop 13 is the reason property is so expensive in California. That is when prices decoupled with reality. Prices would never be so high if people were forced to pay high property tax too.

Yes, just me... corporations pay both the pass through real property taxes put also the personal property tax. Filed under Form 571 annually...

They list out all past active fixed assets and current new purchases which are taxed.

http://www.smcare.org/business/bps571.asp

Lost Cause, prop 13 had very little effect when RE prices fell in early 81-82 not to mention in late 80-early 90s. If Prop 13 was the main reason then why did prices fall and why are they falling even today.

Even before prop 13 RE prices fell back in 1972-74.

Fact is CA prices were not as expensive compared to other states.
More recently post-95 did prices raise well beyond incomes and inflation.

Am I the only native here ?

Prop Tax assesment are available on zillow for free.
IF the fools overpaid for RE and are overpaying for Prop Tax, I shed no tear. They were fools to begin with. The only group interested in doing away with Prop 13 is the Teacher Unions... Its been true since 1978.

"That is rather a bold statement. A large number of people would say instead that prop 13 caused contraction in supply of homes for sale because homeowners had a very strong economic incentive to stay put."

Or was it the local city and county "anti-growth" measures from the early 80s which limited constuction. Many Bay Area counties had that ... and additional fees for land contructions which raised costs. JI do remember all these events very well. Prop 13 wasnt at fault.

Just to let you know you can transfer your property tax base from one CA county to another.

"Proposition 60 of 1986 allows you to transfer the tax base of your property when you sell your home and buy a less expensive one after you reach the age of 55 . Proposition 90 allows you to transfer that tax to other counties if they allow it."

Just to let you know you can transfer your property tax base from one CA county to another.

"Proposition 60 of 1986 allows you to transfer the tax base of your property when you sell your home and buy a less expensive one after you reach the age of 55 . Proposition 90 allows you to transfer that tax to other counties if they allow it."

Here is the Santa Clara web site for Property Tax which Zillow tabs into ..

Look up Property Records
How to view basic information about properties within Santa Clara County.
http://www.scctax.org/

Just to let you know you can transfer your property tax base from one CA county to another.

"Proposition 60 of 1986 allows you to transfer the tax base of your property when you sell your home and buy a less expensive one after you reach the age of 55 . Proposition 90 allows you to transfer that tax to other counties if they allow it."

Here is the Santa Clara web site for Property Tax which Zillow tabs into ..

Look up Property Records
How to view basic information about properties within Santa Clara County.
http://www.scctax.org/portal/site/asr/agencychp?path=%2Fv7%2FAssessor%2C%20Office%20of%20the%20%28ELO%29%2FQuick%20Hits%20%28Look%20up%20property%20records%2C%20Dictionary%2C%20Important%20Dates...%29

Just to let you know you can transfer your property tax base from one CA county to another.

"Proposition 60 of 1986 allows you to transfer the tax base of your property when you sell your home and buy a less expensive one after you reach the age of 55 . Proposition 90 allows you to transfer that tax to other counties if they allow it."

Here is the Santa Clara web site for Property Tax which Zillow tabs into ..

Look up Property Records
How to view basic information about properties within Santa Clara County.
http://www.scctax.org/portal/site/asr/agencychp?path=%2Fv7%2FAssessor%2C%20Office%20of%20the%20%28ELO%29%2FQuick%20Hits%20%28Look%20up%20property%20records%2C%20Dictionary%2C%20Important%20Dates...%29

Ignore use this link..http://eservices.sccgov.org/ari/search.do

California Weighs Anti-Sprawl Legislation
Published September 1, 2008

The California Senate approved a bill over the weekend that is being hailed as the most far-reaching urban sprawl bill in the country. The legislation, which is supported by both the Natural Resources Defense Council and the state's largest home builders' lobby, would tie tens of billions of dollars to state and federal transportation funding based on compliance with efforts to reduce sprawl, and by extension, commutes.

Though Gov. Arnold Schwarzenegger has yet to commit to signing the legislation, he has been a major supporter of carbon cutting initiatives in the past. California recently garnered headlines stemming from a lawsuit it filed against the EPA in an effort to enact more rigid emissions standards than those mandated by the federal government. The case is still pending.

Many reasons have been given for why the United States evolved into such a "car culture," and why it's been so reluctant to change its transportation habits in light of rising gas prices and global warming. A recent study found that 68 percent of Americans haven't altered their commutes since the recent price spike began, and that only 7 percent use public transportation.

The simple answer is population density: Of 241 countries measured in a 2004 United Nations study, the US ranked 180th. Americans simply live further away from one another—and their schools, jobs, and malls—making biking, public transportation, and carpooling more difficult than it is in countries like France, England, and Germany.

If California's legislation is successful, it would lead to fewer permits for developments built on cheap, remote pieces of land, and stimulate more affordable housing closer to city centers. Portland, Ore. has received national attention in recent years for its success in fighting sprawl, and the California bill looks to copy several key components from Portland's approach.

http://www.smcare.org/business/bps571.asp

Zetabeos, I stand corrected on the topic of business property tax in California (Form 571).

By the way, I checked the FAQ and it says the rate is 1% and can be up to 1.2% of the assessed value (including special assessments). The assessed value also depreciates (for non-real property) every year, which means that the taxes will decrease as the property ages.

Zetabeos,

On the topic of the relative impact of "Anti-Growth Measures" versus "Prop. 13" on housing prices:

It seems to me that AGM were too late to have any real impact on the amount of land covered by structures in the 5-county central Bay Area. It must have been pretty much all developed by the time the AGM kicked in.

BUT, it may be that AGM limited the construction of multi-storey dwellings based on limitations tied to traffic impact studies or some such.

Here's the real problem:

Californians have always desired their immediate neighborhood to be quiet, low density and traffic free. Mathematically and physically, this is only possible by creating a massive hierarchy of roads with increasing traffic levels. Due to the higher average distance between people in this system, the tranquility at the local street comes at the expense of an enormous roadway infrastructure that never is sufficient.. The local commuters always compete for the limited expressway and freeway space with the remote suburban commuters (who did not fit in the local sprawl and had to move into their own sprawl farther away). The entire system is a gigantic positive fedback loop and will not stop growing until it overheats and burns up (methapohorically speaking).

At the foundation of the system is the ultimate American desire of distancing yourself from your neighbors and the low taxation on oil and petroleum products that acts as the enabler for the sprawl.

All of this could have been avoided by proper laws and regulations, but it is largely unsolvable without a massive do-over that will cost huge amounts of money, energy, resources and CO2. Too bad,

"It must have been pretty much all developed by the time the AGM kicked in."

Oh you would be surprised if you saw it for yourself. Not even close.

"The assessed value also depreciates (for non-real property) every year, which means that the taxes will decrease as the property ages."

If you contest the valuations by the county else its flat for its full life span.

And you know what ... many companies have been paying property tax on said equipment for years without actually inventoring annual to find if its still around due to labor contrainsts. Companies have been overpaying many times over.

Zetabeos,

Wait a second -- the link you sent points to pdf documents that show explicitly the depreciation tables for computers , copiers and what have you..

So what do you mean that you have to contest valuations in order to get depreciation?

It certainly requires plenty of bookkeeping, but should a business not keep track of the book value of its equipment in any case? It seems like good business practice in any event.

Big picture : Many small businesses are not all that capital intensive, Maybe 10-20-50k per employee. Keep track of your assets properly, and then pay 100-200-500 bucks per employee the first year, and less thereafter.

Regular (real estate) property tax seems much more onerous than this relatively minor stuff, especially considering the current housing prices.

In SV typical small corporation have 20-30M in Fixed Assets costs.
They will include leasehold improvements, IT infrast, like ERP and CRM systems, and pulled inventory as test beds, these can go into millions.

In the larger companies, before Mfg was outsourced from SV full scale production and testing machinery was also included which went into Billions. You can image how much capital was used in clean room Semiconductor fabrication plants which once littered this valley.

"The assessed value also depreciates (for non-real property) every year, which means that the taxes will decrease as the property ages."

Every corporation buy more each year in new capital. Its seems to never end and only grows. And so does the tax bill.

Zetabeos,

Every corporation buy more each year in new capital. Its seems to never end and only grows. And so does the tax bill.

Sure, but your claim (below) was that people kept paying taxes on old and worthless equipment unless they actively *contest* the valuations. That is simply not the case. Just applying the tabulated depreciation is sufficient.

>>If you contest the valuations by the county else its flat for its full life span.

NOT to ZetaBeos or anyone in particular:

There is a long-standing tradition in this country of tax exaggeration. People make exaggerated claims about how much the gubbermint is taxing them, and then the claims become part of the folklore and the "conventional wisdom".

Only one thing is amiss: Many of the claims are quite inaccurate or just plain wrong. I specifically don't have any particular bone to pick with ZetaBeos about this. I just want people to realize that taxes are often not as high or bad as the conventional wisdom claims. There is a lot of anti-tax propaganda echoing around out there!

Capture a greater part of property values and you'll also collect a part of the uplift in property values provided by public infrastructure. On the other hand if you tax doers, you'll have less economic activity and a decaying public infrastructure.

Big statement? Then list the highest property-taxing states, from New Hampshire downwards. Coincidentally (?), your list will prove to be a list of the best economic performers, down to the basket case into which California has turned itself by means of Proposition 13. - QED.

Prop 13 is the reason property is so expensive in California. That is when prices decoupled with reality. Prices would never be so high if people were forced to pay high property tax too.

I suppose that is how the early nineties real~estate collapse was averted in California: Prop 13 kept prices going up and up from 89 through 96. LOL, of course, IT DIDN'T DO ANY SUCH THING. If you don't want prices to be so high why not just tax every property 100%, that way almost NO ONE will be able to buy a house. Would that make you happy?

Prop Tax assesment are available on zillow for free.

IF the fools overpaid for RE and are overpaying for Prop Tax, I shed no tear. They were fools to begin with. The only group interested in doing away with Prop 13 is the Teacher Unions… Its been true since 1978.

TrueDat!

;
I suppose that is how the early nineties real~estate collapse was averted in California: Prop 13 kept prices going up and up from 89 through 96. LOL, of course, IT DIDN’T DO ANY SUCH THING. If you don’t want prices to be so high why not just tax every property 100%, that way almost NO ONE will be able to buy a house. Would that make you happy?

You silly boy. Take a high-school level course in mathematical logic and you will know that your argument is complete fabrication.

Nobody claimed that (A) Prop 13 would prevent prices from falling. What was claimed was that (B) Prop 13 was a driving force behind rapidly *rising* property prices in bubble and boom times.

You are claiming that B implies A. It doesn't. I (and others) were specifically not claiming A, nor that B implies A. We were simply claiming "B".

yep, it aint gonna happen. The old geezers would be out on the streets.

This is BS. Every other state has figured this out. My parents live in Oklahoma and once you turn 65 your taxes are frozen unless you move. "kicking out granny" is propaganda brought about by the REAL benefactors of Prop 13, Commercial RE owners.

How to attack the problem? Start with attacking the smaller, individual homeowners first. The easiest one to start is, attack the inheritance of tax base under prop 13, because it is simply morally WRONG. The inheritance of tax base, as far as I understand it, is only between direct descendants, but not applicable to corporations if a transaction takes place.

Your info about corps is wrong. The tax base only changes if one entity takes 51% ownership. Read this article:
http://www.signonsandiego.com/news/state/20080702-1315-ca-statebudget-corporatetaxes.html

THIS is the real travesty of Prop 13. It's the commercial RE owners screwing the system. At this point I'd be happy if they simply deleted the CRE portion of Prop 13.

Oakland, CA is on the brink of bankruptcy:

Consider the city's cash position: Out of next year's general fund of approximately $415 million, police costs are estimated at $212 million, fire protection service $103 million and $41 million in debt service payments. That leaves about $60 million to pay for everything else, from library services to recreation centers to public works.

Wow. I knew it was bad, but not THAT bad. Police and Fire Departments constitute *** 76 % **** of Oakland's general fund.
Double-wow.. Talk about living in a police state.

I like the new feature that says when all the members joined:

It reveals that OO, Eliza. empty_houses and myself (justme) joined on the same day: June 16th, 2007. Probably a few others, too, I did not search very far.

What are the odds? There must have been something in the air that day.

And Headset joined on June 20th, 2007, shortly thereafter.

I added icons too. You should have a link at top that says "Add Icon".

Icons? I'll have to think about that one :-) Is there going to be an arms-race in icons now?

justme,

nothing was in the air that day except that Patrick made it compulsory for one to join in order to post. I remember myself posting way earlier than that date.

OO,

Aha, I did not know that. Perhaps that is why I signed up as well. I do not recall exactly.

OO,
Aha, I did not know that. Perhaps that is why I signed up as well. I do not recall exactly.

@Just Me

Why am I not surprised? A moron, such as yourself, must have trouble remembering his/her lunch money if your mother didn't tuck it into your shoe.

Thanks, WIlly. Coming from you, that means a lot.

Why not revise Prop. 13 to "owner-occupied PRIMARY residence"?

That should neatly take care of all the Grannies on teacher pension that they trumpet the thing for. And neatly hose all the parasites and cheats who are the ones really behind it.

Why not revise Prop. 13 to “owner-occupied PRIMARY residence”?
That should neatly take care of all the Grannies on teacher pension that they trumpet the thing for. And neatly hose all the parasites and cheats who are the ones really behind it.

On top of it, they can add the tax lien on primary residence. As long as the primary residence is not sold, you still pay the old tax. When the house is sold, Govt should get their accumulated tax first.

Why not revise Prop. 13 to “owner-occupied PRIMARY residence”?
That should neatly take care of all the Grannies on teacher pension that they trumpet the thing for. And neatly hose all the parasites and cheats who are the ones really behind it.

Agreed 100%