This is a good illustration of bad tax policy, specifically Prop 13.
Zoom in on a residential street, particularly in the Bay Area, and you will see a row of houses which are roughly equivalent in value. Some homeowners pay several times as much annual property tax as their neighbors, because they bought their homes more recently and paid more for them.
That's kind of insane, and nobody would design the property tax system that way if they were starting from scratch.
It's kind of insane. But it's also kind of insane that when the housing prices double or triple, you can expect your property tax to go up quite a bit as well, which makes it hard to plan for the future.
I think if the value increase cap was raised (gradually) to something like 4-5% per year, you would still have assessed values trailing market values, but not by nearly as much. People could still make worst case projections of taxes to see if they could afford things.
Washington state has a different system, where the total property tax of each taxing jurisdiction can only increase by 1% each year (subject to exceptions and what not), and then that amount is apportioned to each property based on the assessed value. This provides a limit on government spending as CA prop 13 does, but it doesn't limit changes in tax on any individual homeowner; if your property becomes more relatively valuable than others in your taxing districts, your bill goes up and theirs goes down. Which I'm sure causes assessments to be a lot more contenious.
Many, ... most? states have some kind of homesteading tax relief.
For example, in Florida property tax increases are capped to the lesser of 3% or CPI. 25k of value is also exempted from property taxes and 50k is exempted from non-school property taxes. But only for a single primary residential property.
Where CA13 is different is that it applies to everything: commercial property, industrial property, rental property, second homes, third homes, etc.
I think there is a pretty good case to be made that there is a massive public interest in keeping people from being pushed out of their homes by taxes. Capping tax increases is also necessary to make it possible to financially plan for them (e.g. I can invest enough so that my investments will pay the taxes w/ increases for the rest of my life, and just add that to the 'cost' of the home-- given historical market returns this requires investment of 25x your annual property taxes, so long as they can't grow faster than inflation). One could also make the case for a public interest in not letting some businesses get pushed out (primarily small, single location businesses).
But prop 13 goes far beyond that-- applying to all property and with extremely expansive portability-- and as a result creates a massive windfall for existing property owners at the expense of new property owners.
I'd like to see at least a rule that for rented properties that assessments should be allowed to increase as much as rents have. There is little to no prevent-displacement justification for not tracking rents.
Counterpoint: Why should your property taxes go up just because the market around you skyrockets, when this is completely outside of your control? The bay area is a prime example of this.
I found a few places in Beverly Hills where people were paying over 100x less than their neighbors, which is insane. I wonder if posting screenshots of this map up in various neighborhoods showing nearby inequality would be enough combat the "poor old grandma getting kicked out of her house" counterpoint that's pretty much entirely fictional.
On my block we have five nearly identical houses. My house, which I bought 12 years ago, my neighbors house, which they have been in for 22 years, my other neighbor, who has been there 45+ years, the neighbor two over who bought about five years ago, and the neighbor two over the other way who bought two weeks ago.
If my tax bill is X, the rates are as follows, for nearly identical houses, all valued nearly the same on Zillow/Redfin:
2.3X
0.4X
1.0X
0.1X
2.0X
The two lowest payers don't have kids in school, so an argument could be made for them to have slightly lower taxes, but they still use the police, fire department, parks, and they have access to the senior center, which I do not.
The rest of us have kids roughly the same age.
So basically the people who just moved in are subsidizing the rest of us significantly.
I grew up with the schools here back in the 90s and we largely couldn't pass new parcel taxes because "their kids already went through school and they didn't need it". They were more concerned with all the growing crime, which you would think that maybe the lack of after school programs and growing unaffordability for everyone else was part of the issue.
I don't think so. You lived there for a number of years and you already paid fair taxes and when you bought the property you knew what the taxes are going to be and that allowed you to plan your life. People who are buying it now also know what their taxes are going to be now, and they should thank you for your share of the taxes that you paid over the years to keep community in good shape.
> So basically the people who just moved in are subsidizing the rest of us significantly.
Not as much as the ratio of property taxes would make you think; given Prop. 13’s other provisions, like the limit on nominal rates, much of the revenue functions that are served by ad valorem property taxes in places that aren't crippled by Prop 13 are, in California, served by a combination of:
(1) Mello-Roos fees (per-parcel assessments that are weighted by value and so aren't affected by the Prop 13 assessment increase discrepancy),
A see some data in my neighborhood which is weird.
Comparing same model houses only (same as mine), tax rates are in the range of 5K to 8K. But just a couple of the same model houses are shown as $800 to $900! If I didn't know this neighborhood I would jump to the conclusion that those houses have been owned for so long that their taxes are so low and curse prop13.
But, I've been in this neighborhood since it was built so I know the tax was never below 2K even on the first year of constructed.
So either these outliers are just errors in the published records, or is there some tax exemption program in CA for people who qualify to some criteria?
In any case, it does give the impression that the tax range for this model house is $800 to $8K (10x) when that is not true. It is really 5K to 8K.
> is there some tax exemption program in CA for people who qualify to some criteria?
There are exemptions which allow some people (seniors and people with disabilities I think) to be "portable" with their property taxes. I.e they can buy a new property and the taxes of their old property transfer over to the new one..
I think I've seen this map before (it isn't loading as I write this). However, what I'd love to see is: What the property taxes are and what they would be if the property was purchased today. I'm not sure if an absolute amount or a percentage would be more impactful when comparing the two. I'm sure it hits hard to see your neighbors paying 10% of what you pay - but probably just as much seeing $2,000 vs $20,000 in assortments.
I think you can pretty much look at the highest tax being paid on a particular street and assume that everyone else would pay the same. Most of the time, all the houses on a street in California are roughly similar in value, because they were all built around the same time by the same developer and are very similar, barring extreme examples like Atherton or Beverly Hills where everyone has a custom home.
There is another site which tells you the tax subsidy based based on redfin estimated prices.
I'm not especially inclined to link to it because it falsely claims that no other state has non-mark-to-market property taxes, and for residences that is simply untrue.
And remove it from anything but your primary residence that you live in. Allow the homeowner to roll the tax until sale, or keep it if they stay in the state by buying another house. Make it income based as well. If you’re making good money, you’re not a senior that can’t afford to stay in their home.
twblalock|5 years ago
Zoom in on a residential street, particularly in the Bay Area, and you will see a row of houses which are roughly equivalent in value. Some homeowners pay several times as much annual property tax as their neighbors, because they bought their homes more recently and paid more for them.
That's kind of insane, and nobody would design the property tax system that way if they were starting from scratch.
toast0|5 years ago
I think if the value increase cap was raised (gradually) to something like 4-5% per year, you would still have assessed values trailing market values, but not by nearly as much. People could still make worst case projections of taxes to see if they could afford things.
Washington state has a different system, where the total property tax of each taxing jurisdiction can only increase by 1% each year (subject to exceptions and what not), and then that amount is apportioned to each property based on the assessed value. This provides a limit on government spending as CA prop 13 does, but it doesn't limit changes in tax on any individual homeowner; if your property becomes more relatively valuable than others in your taxing districts, your bill goes up and theirs goes down. Which I'm sure causes assessments to be a lot more contenious.
nullc|5 years ago
For example, in Florida property tax increases are capped to the lesser of 3% or CPI. 25k of value is also exempted from property taxes and 50k is exempted from non-school property taxes. But only for a single primary residential property.
Where CA13 is different is that it applies to everything: commercial property, industrial property, rental property, second homes, third homes, etc.
I think there is a pretty good case to be made that there is a massive public interest in keeping people from being pushed out of their homes by taxes. Capping tax increases is also necessary to make it possible to financially plan for them (e.g. I can invest enough so that my investments will pay the taxes w/ increases for the rest of my life, and just add that to the 'cost' of the home-- given historical market returns this requires investment of 25x your annual property taxes, so long as they can't grow faster than inflation). One could also make the case for a public interest in not letting some businesses get pushed out (primarily small, single location businesses).
But prop 13 goes far beyond that-- applying to all property and with extremely expansive portability-- and as a result creates a massive windfall for existing property owners at the expense of new property owners.
I'd like to see at least a rule that for rented properties that assessments should be allowed to increase as much as rents have. There is little to no prevent-displacement justification for not tracking rents.
seiferteric|5 years ago
nathanvanfleet|5 years ago
ladberg|5 years ago
unknown|5 years ago
[deleted]
buss|5 years ago
Also, check out this organization I'm part of: https://techworkers.vote
jedberg|5 years ago
If my tax bill is X, the rates are as follows, for nearly identical houses, all valued nearly the same on Zillow/Redfin:
The two lowest payers don't have kids in school, so an argument could be made for them to have slightly lower taxes, but they still use the police, fire department, parks, and they have access to the senior center, which I do not.The rest of us have kids roughly the same age.
So basically the people who just moved in are subsidizing the rest of us significantly.
It's completely unfair.
lambdaops|5 years ago
andy-x|5 years ago
foogazi|5 years ago
Somebody call the waaahmbulance.
No CA homeowner should be surprised by this. Guess what you probably paid a higher price than them - voluntarily!!!
dragonwriter|5 years ago
Not as much as the ratio of property taxes would make you think; given Prop. 13’s other provisions, like the limit on nominal rates, much of the revenue functions that are served by ad valorem property taxes in places that aren't crippled by Prop 13 are, in California, served by a combination of:
(1) Mello-Roos fees (per-parcel assessments that are weighted by value and so aren't affected by the Prop 13 assessment increase discrepancy),
(2) state and local income taxes,
(3) state and local sales taxes.
jjav|5 years ago
Comparing same model houses only (same as mine), tax rates are in the range of 5K to 8K. But just a couple of the same model houses are shown as $800 to $900! If I didn't know this neighborhood I would jump to the conclusion that those houses have been owned for so long that their taxes are so low and curse prop13.
But, I've been in this neighborhood since it was built so I know the tax was never below 2K even on the first year of constructed.
So either these outliers are just errors in the published records, or is there some tax exemption program in CA for people who qualify to some criteria?
In any case, it does give the impression that the tax range for this model house is $800 to $8K (10x) when that is not true. It is really 5K to 8K.
umeshunni|5 years ago
There are exemptions which allow some people (seniors and people with disabilities I think) to be "portable" with their property taxes. I.e they can buy a new property and the taxes of their old property transfer over to the new one..
Edit: found this https://www.boe.ca.gov/proptaxes/prop60-90_55over.htm
bradlys|5 years ago
twblalock|5 years ago
nullc|5 years ago
I'm not especially inclined to link to it because it falsely claims that no other state has non-mark-to-market property taxes, and for residences that is simply untrue.
foogazi|5 years ago
No one should be surprised by this since it’s public information. Plus if you hang around long enough your taxes also stay frozen
xtiansimon|5 years ago
Revisionist History A GOOD WALK SPOILED SEASON 2 - EP1 http://revisionisthistory.com/episodes/11-a-good-walk-spoile...
foogazi|5 years ago
deepakhj|5 years ago