patrick.net

GNL says

Blue says

LOL you were able to understand is because, I suspect you live outside of CA.

Correct. I do understand wanting to allow the older set to grow old in their homes. I am sensitive to that in California the same as the rest of the country. I think Patrick has posted some great solutions.

How the F is it fair that someone can inherit a tax subsidy? That's fucking insane.

Life isn't fair. Prop 13 like any other law, has unintended consequences that have yet to be fully seen.

The best part of "conservatives" braying about some people not paying "enough" taxes is the argument that it is "starving public schools". The same "conservatives" who recently argued that children should be taken OUT of public schools and homeschooled (or at least sent to private schools).

Ah, the consistency, the principles!

1337irr says

Life isn't fair. Prop 13 like any other law, has unintended consequences that have yet to be fully seen.

And that's news? People are trying right a wrong. You're against righting wrongs? Or am I reading you incorrectly?

GNL says

1337irr says

Life isn't fair. Prop 13 like any other law, has unintended consequences that have yet to be fully seen.

And that's news? People are trying right a wrong. You're against righting wrongs? Or am I reading you incorrectly?

There isn't much I can do about it. I don't live in or own property in California.

1337irr says

Life isn't fair. Prop 13 like any other law, has unintended consequences that have yet to be fully seen.

Yep.

"It would be like a death tax"

No, it's not a death tax to restore a property tax rate for the heirs. They didn't buy the house with their money decades ago and lock in the tax rate. They just got the house transferred to them as a new owner, and are not entitled to the rate locked in by the former owner.

This is really silly. In Florida we have the homestead exemption which is a better method. If you get the house via inheritance, but don't live there, you can't claim the exemption, duh.

Because most of the people inheriting places are living somewhere else and planning to rent them out. But want to keep the rate as if it's their one and only residence they brought with their own money decades ago.

GNL says

How the F is it fair that someone can inherit a tax subsidy? That's fucking insane.

This is Prop 58, not Prop 13. Patrick’s rent has been subsidized by Prop 13 b/c the current owner has a low property tax basis and doesn’t feel the need to raise his rent close to market.

There are more, but I won’t get into it. People will believe whatever they want to believe.

AmericanKulak says

If you get the house via inheritance, but don't live there, you can't claim the exemption

This is how Prop 13 works now.
On November 3, 2020, California voters approved Proposition 19, the Home Protection for Seniors, Severely Disabled, Families and Victims of Wildfire or Natural Disasters Act. Proposition 19 is a constitutional amendment that limits people who inherit family properties from keeping the low property tax base unless they use the home as their own primary residence.

EBGuy says

On November 3, 2020, California voters approved Proposition 19, the Home Protection for Seniors, Severely Disabled, Families and Victims of Wildfire or Natural Disasters Act. Proposition 19

What would happen if the tax benefits of this and Prop 13 were stopped ?

It would cause a lot of owners to sell their homes and it would cause a housing price crash ?

,

ad says

.

https://finance.yahoo.com/news/pimco-kiesel-called-housing-top-160339396.html?source=patrick.net

Bond manager Mark Kiesel sold his California home in 2006, when he presciently predicted the housing bubble would pop. He bought again in 2012, after U.S. prices fell more than 30% and found a floor.

Now, after a record surge in prices, Kiesel says the time to sell is once again at hand.

I bought at 2.5% and my home appreciated 350k so my plan is to save as much cash for the next bubble when houses are down 30%. When do you think they will drop again?

Broadway_Sam says

I bought at 2.5% and my home appreciated 350k so my plan is to save as much cash for the next bubble when houses are down 30%. When do you think they will drop again?

You're looking for market timing gains. No one here can tell you. Housing even with high interest rates is still on solid ground. If you're in LA, or an inflated market like Austin, TX I'd be somewhat reluctant to buy. 2008 or whatever official year is not in the cards in my opinion. 30% is a lot and there's no inventory. Prices during the bust were increasing with 7-9 months worth of inventory. We're not remotely near that in most markets.

And yes, YOY sales are going to decrease this fall. It doesn't matter if no new inventory hits the market. Sales numbers are a god awful metric. If there aren't houses for sale, it's hard for prices to drop. And the only drops will because people testing the market with shit homes that weren't gonna sell anyway. Banks aren't going to foreclose if people hit a rough patch. No excuse for that right now really. You might have to wait a while for 30%.

I just heard on the radio this morning that home prices in the DMV are up 5% yoy.

Broadway_Sam says

I bought at 2.5% and my home appreciated 350k so my plan is to save as much cash for the next bubble when houses are down 30%. When do you think they will drop again?

I think they are going to hold steady or stay about 10% to 15% below peak price (set in early 2022) for the next couple of years.

If the Fed Funds rate drops (along with the 30 year mortgage rate) its because of a recession which means less demand for housing.

I have about 50% in "investment grade" bonds and 50% in index funds (i.e., total stock market index, etc.) for my IRA's. I figure when interest rates go down that my bond portion will fare well enough to compensate some for any drop in the index funds.

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GNL says

Correct. I do understand wanting to allow the older set to grow old in their homes. I am sensitive to that in California the same as the rest of the country. I think Patrick has posted some great solutions.

Here in Santa Clara County we already have a solution to that. Seniors can opt to have the county put a lien on their home in the amount of the taxes owed. The only people whose taxes would suddenly skyrocket (without Prop 13) are the ones whos house values also skyrocketed, so they will have plenty of equity assuming they used their house for shelter not as an ATM.

I think a better solution to unexpected massive tax bill increases is to asses each property evenly and then set the rate such that the amount of total taxes collected is at a 2% increase from the previous year. So, if everyone's house suddenly is assessed at 2x the amount one year, then the tax rate would be cut in half. That would hold property taxes down for everyone instead of the current uneven situation where the people having multi-million dollar windfall real estate gains get a huge subsidy and the young people stretching to buy their first house get hit with the largest tax bill.

zzyzzx says

Should read: Making 2k a month passive income while paying $5k/month interest on the mortgage and losing $5k/month equity.

ad says

What would happen if the tax benefits of this and Prop 13 were stopped ?

It would cause a lot of owners to sell their homes and it would cause a housing price crash ?

That ain't happening in my lifetime (the residential side). However, the Prop 13 commercial reform could come to pass. It was defeated (52% No) in November, 2020. I could definitely see this coming up for another vote in the future (especially when the state coffers run dry). Hard to know what would happen, but it's affects would be far reaching...

EBGuy says

On November 3, 2020, California voters approved Proposition 19, the Home Protection for Seniors, Severely Disabled, Families and Victims of Wildfire or Natural Disasters Act. Proposition 19 is a constitutional amendment that limits people who inherit family properties from keeping the low property tax base unless they use the home as their own primary residence.

GREAT!

(Although, they shouldn't get the same rate, just whatever rate ANY homeowner should get for a primary residence)

Considering Prop 19 above, why the continued hatred of limiting property tax increases on purchaser/owner occupied homes?

Like I said before, government spending needs to be reigned in because they are all acting like drunken fools. There is no way in hell I want them to get additional tax revenue.

EBGuy says

However, the Prop 13 commercial reform could come to pass. It was defeated (52% No) in November, 2020.

2020_California_Proposition_15 failed is because, there was obviously from super rich sponsored a repeated commercials on TV showing a women holding a baby says that she will be on street if it passes!!
Anyone see that commercial will definitely vote 'No' as most people are either sensitive, dumb or panic and can not think whether it was really true or not.
What a scam, reducing tax fat subsidies on Large Commercial Properties anything to do with a women holding a baby!!
At this stage, I believe 1978 Prop 13 spread like a cancer in CA with various form of propositions over the decades.
Proposition 19 is full of loopholes with back to Prop 13 again after property transfer if any property ever go on that route! There are so many ways to avoid Prop 19!
1978 Prop 13 blown up right after it passed in a year or two! Then they introduced "Mello-Roos taxes" part of the Prop 13 stone soup as "workaround"!
The only down side ;) of a true repeal as if you never heard Prop 13 are, new or young people do not pay hidden tax to existing property holders in the form of "high home prices". Fellow Americans from other states can move in or out without much financial burden just like most of the states etc. Otherwise it is financially isolated (apart from divergent culturally) and attract immigrants or illegals only to get even more divergent. Not good for US in the long run.
https://en.wikipedia.org/wiki/2020_California_Proposition_15
https://en.wikipedia.org/wiki/2020_California_Proposition_19
https://www.legalzoom.com/articles/what-is-mello-roos-the-ultimate-guide-to-understanding-this-california-tax-law

ForcedTQ says

Considering Prop 19 above, why the continued hatred of limiting property tax increases on purchaser/owner occupied homes?

Like I said before, government spending needs to be reigned in because they are all acting like drunken fools. There is no way in hell I want them to get additional tax revenue.

California doesn’t have revenue problem. It has spending problem. The solution is to give the state more tax revenues?

I’m a business owner. I see the solution differently. More tax revenues will not solve the California spending crisis.

I don’t know what drives the people who want to repeal Prop 13. If a bunch of immigrants, who could make it in this country, starting from ground zero and without speaking the language, what’s stopping the folks who are born here and speak the native language? It never stops amaze me what kind of stuff people come up with.

https://finance.yahoo.com/news/disturbing-trend-real-estate-investors-130711393.html

Homes Sold At A Loss, Numbers Not Seen Since 2016

It appears that investors are now losing on approximately one out of every seven homes they sell. In certain U.S. cities, sky-high house prices and elevated mortgage rates have diminished homebuyer demand, forcing investors to sell homes at a loss. A recent report by Redfin reveals that in March, investors lost money on roughly 13.5% of the homes they sold.

Eman says

California doesn’t have revenue problem. It has spending problem. The solution is to give the state more tax revenues?

I’m a business owner. I see the solution differently. More tax revenues will not solve the California spending crisis.

I don’t know what drives the people who want to repeal Prop 13. If a bunch of immigrants, who could make it in this country, starting from ground zero and without speaking the language, what’s stopping the folks who are born here and speak the native language? It never stops amaze me what kind of stuff people come up with.

You never directly reply to any of the arguments above but kept repeating this same BS over and over. Your RE success is noting to do with CA RE slavery brought in by Prop 13 and how it put class hierarchy system in place and literally hurting new and/or young buyers etc. out of its ponzy pyramid scheme.
Paying $15 to $50K+ taxes for a typical ghetto shack around is not funny at all. I suspect you are not paying that much for your shacks around and take advantage of Prop 13 and being a parasite on the state and indirectly pushing prices on victims around. Repeal Prop 13 will cool off the shack prices significantly so does that RE taxes. People mixing the stuff into Prop 13 only to create stone soup and take illicit advantage of Prop 13 to keep the class hierarchy under ponzy pyramid scheme in place.

Prop 13 could be repealed together with the additional would be tax income mandated to be used to lower property taxes for all. Simple. Or get rid of property tax as a whole.

Eman says

I don’t know what drives the people who want to repeal Prop 13.

Spoken like a landlord.

I was here in 1978 when Proposition 13 passed. (where were you, homie?) I was a teenager then. I was a nerd who kept track of local politics. I remember it well. Proposition 13 was popular then, and popular now, when assessments (and taxes )were going up by double digits per year, forcing many people out of their homes, especially old folks on fixed income. Mom and Pop shopholders also forced out of their businesses. Farmers just outside the urban fringe forced to sell. Some of those were parents of my high school classmates. This is the reason that Proposition 13 was wildly popular then, and wildly popular now.

The law also covered commercial property like office buildings, shopping malls, factories, etc. (and yes, small-time landlords). But that is not what made the law so popular.

The law can be reformed to protect people to be able to stay in their homes. Landlords big and small try to confuse the issue by framing it as an all-or-nothing repeal-versus-keep the law, trying to control the narrative away from a concept of reforming it.

Have fun exploiting people, homie.

I do not understand why California did not do what municipalities in other states did when property values shot up - just lower the tax rate across the board. For example, if the rate is 2.6% and house values double, lower the rate to 1.3%.

HeadSet says

I do not understand why California did not do what municipalities in other states did when property values shot up - just lower the tax rate across the board. For example, if the rate is 2.6% and house values double, lower the rate to 1.3%.

Yep

https://markets.businessinsider.com/news/stocks/housing-market-return-to-office-policies-home-sales-remote-work-2023-9

Return-to-office policies are driving people to sell their homes - even at a loss

HeadSet says

I do not understand why California did not do what municipalities in other states did when property values shot up - just lower the tax rate across the board. For example, if the rate is 2.6% and house values double, lower the rate to 1.3%.

Even Baltimore City lowers the rates if the values rise. They also raise the rates if home values fall.

https://www.redfin.com/news/housing-market-tracker-august-2023/

Home Purchases Fell Through at the Highest Rate in Nearly a Year in August

Eric Holder says

The best part of "conservatives" braying about some people not paying "enough" taxes is the argument that it is "starving public schools". The same "conservatives" who recently argued that children should be taken OUT of public schools and homeschooled (or at least sent to private schools).

Ah, the consistency, the principles!

that’s the strangest part of this. but i guess it’s more emotional than logical argument from the people who can simultaneously want less taxes and more taxes.

if there was logic theyd demand their higher taxed properties be assessed down to some earlier tax rate, but instead they demand it be raised on others. feels more like a campaign to raise taxes so section 8 hoes can keep collecting.

mell says

HeadSet says

I do not understand why California did not do what municipalities in other states did when property values shot up - just lower the tax rate across the board. For example, if the rate is 2.6% and house values double, lower the rate to 1.3%.

Yep

Because CA government thinks they should be getting even more revenue than statutorily prescribed. They are drunk on tax money, and will not give it up, ever. This is also the reason repealing Prop 13 would be one of the most disastrous things to do for Taxpayers…

ForcedTQ says

This is also the reason repealing Prop 13

Are you a landlord?

Many homeowners are OK with reforming Proposition 13.

Landlords are so not OK with reform that they don't even discuss the concept. Only all-or-nothing repeal.

California is forecast to exceed its budget this year. Do you think for an instant that the government will reduce its spending????

If not, that only leads to one thing...higher taxes.

There has been plenty of softening up of the population to allow a change to Prop 13. I mean in San Francisco the homeownership rate is only 35%. By continuously saying that property prices will be reduced by reevaluating Prop 13, the Marks might be willing to let the government increase taxes on those disreputable property owners.

Since things do not happen in a vacuum, the resulting change in prices could be funny, and cause more government interference.

Misc says

the Marks might be willing to let the government increase taxes on those disreputable property owners.

IMO, this is an exact example of how socialism rises. Once enough people had nothing, they vote to get the "rich". This is bad for everyone, rich and poor alike. Best to make sure that the economy works for everyone.

Misc says

California is forecast to exceed its budget this year. Do you think for an instant that the government will reduce its spending????

If not, that only leads to one thing...higher taxes.

.

https://calmatters.org/commentary/2023/07/bond-money-cover-budget-deficits/

See the above article link dated in July 2023 as California can issues bonds to cover budget deficits

.

Nope, California like 48 other States has a balanced budget amendment in its Constitution.

Although recently, Constitutions have become more or less ignored. I foresee Prop 13 folding before the balanced budget amendment. Don't ask how a State has hundreds of Billions of debt outstanding with a mandatory balanced budget. The Soviet Union had a pretty Constitution from what I've been told.

People who don't care about money or are in charge of other people's investments (and want to fuck them over for some kickback) buy these sort of bonds. See Puerto Rico.

ForcedTQ says

mell says

HeadSet says

I do not understand why California did not do what municipalities in other states did when property values shot up - just lower the tax rate across the board. For example, if the rate is 2.6% and house values double, lower the rate to 1.3%.

Yep

Because CA government thinks they should be getting even more revenue than statutorily prescribed. They are drunk on tax money, and will not give it up, ever. This is also the reason repealing Prop 13 would be one of the most disastrous things to do for Taxpayers…

You have to write the law with the provision that the money must be used to lower the property taxes, under threat of prison time if misappropriated. Of course the concern is understandable when you see governors and Presidents abolishing the rule of law. Still if there is no rule of law, CA will find and has found other ways to fuck their constituents over and extract the money otherwise. I'd rather have a few simple and just laws for everyone, without loopholes.

The housing Bears are also pushing the idea of reduced travel among the masses. There's over 2 million AirBnBs. The Bears think that when they stop cash flowing there will be a mass exodus thereby driving down prices. Thing is most of these BnBs are in vacation hot spots and a good size chunk of our economy has plenty of financial assets to draw on, so it would take another lock down scenario to deplete demand. Even though Bidenomics has caused real wages to decline for 3 straight years, homeowners that refied for under 3% still end up ahead because of a reduced housing expense. It's generation Z that really got fucked over.