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Fleeing California is Not going to be an option for homeowners
invite response
2021 Apr 26, 9:50pm 2,652 views 60 comments
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60
B.A.C.A.H.
2021 Apr 28, 12:08pm
B.A.C.A.H.
2021 Apr 28, 12:08pm
A thought experiment.
In order to have such a huge capital gain, it means a relatively low cost basis. That means for most cases, a long-ago purchase with Proposition 13 assessment locked in.
All those years, all those savings on Property Tax, compounded if invested. (Indirectly) subsidized by Tax Donkeys who made more recent purchases at more recent prices with more recent assessments. This would include some renters who paid it through some landlords.
Now a taxable windfall capital gain. What goes around, comes around.
In order to have such a huge capital gain, it means a relatively low cost basis. That means for most cases, a long-ago purchase with Proposition 13 assessment locked in.
All those years, all those savings on Property Tax, compounded if invested. (Indirectly) subsidized by Tax Donkeys who made more recent purchases at more recent prices with more recent assessments. This would include some renters who paid it through some landlords.
Now a taxable windfall capital gain. What goes around, comes around.
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Let's say you are married. That way you get a $500k exclusion on capital gains when you sell your house.
If you bought the house for like $500k way back when, and it's worth $2.5 million now you are looking at paying about $1.1 million in capital gains tax just to get rid of your crap shack.
This is going to lock people into place even better than Prop 13.
There is no escape from California.
There's been rumors floating around the media that he wants the tax retroactive. Pity the ones that tried to escape this year, if that flies.