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Fri Aug 17, 2018, 03:33 PM

Are CA property tax laws still appropriate?


"..... descendants of a generation of California homeowners enjoy a significant perk that keeps their property tax bill low. Part of that is thanks to Proposition 13, which has strictly limited property tax increases since 1978. But they also benefit from an additional tax break, enacted eight years later, that extended those advantages to inherited property ó even inherited property that is used for rental income.

California is the only state to provide this tax break, which was designed to protect families from sharp tax increases on the death of a loved one. Without the tax break, proponents argued at the time it passed, adult children could have faced potentially huge bills, making it financially prohibitive to live in their family homes.

But a Los Angeles Times analysis shows that many of those who inherit property with the tax breaks donít live in them. Rather, they use the homes as investments while still taking advantage of the generous tax laws."

As a former teacher I know first hand how much this has hurt the state's schools. CA used to be in the spotlight as having FANTASTIC schools...that was until Prop 13. The amount students receive from the state ranks it in the bottom 5 of the all the states. There are no teachers for Science, PE, Art, Music, etc. The staffs have been cut by up to 33% in some districts. Schools don't have A/C or even playground equipment, printers in classrooms, on-site tech repair, nurses, psychologists, ....

http://www.latimes.com/politics/la-pol-ca-california-property-taxes-elites-201808-htmlstory.html#

28 replies, 2410 views

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Arrow 28 replies Author Time Post
Reply Are CA property tax laws still appropriate? (Original post)
BigmanPigman Aug 2018 OP
Bernardo de La Paz Aug 2018 #1
byronius Aug 2018 #2
Kilgore Aug 2018 #3
Mr.Bill Aug 2018 #4
BigmanPigman Aug 2018 #6
Mr.Bill Aug 2018 #10
pennylane100 Aug 2018 #16
Tikki Sep 2018 #19
still_one Aug 2018 #8
Mr.Bill Aug 2018 #15
Johonny Apr 3 #27
still_one Aug 2018 #5
BigmanPigman Aug 2018 #7
still_one Aug 2018 #13
Mr.Bill Aug 2018 #11
still_one Aug 2018 #14
The River Aug 2018 #9
AlexSFCA Aug 2018 #12
ROB-ROX Aug 2018 #17
SHRED Aug 2018 #18
Retrograde Oct 2018 #21
CountAllVotes Oct 2018 #20
DonCallis Apr 1 #22
marble falls Apr 1 #23
TomSlick Apr 4 #28
DawwidDem Apr 2 #24
BigmanPigman Apr 2 #25
Johonny Apr 3 #26

Response to BigmanPigman (Original post)

Fri Aug 17, 2018, 03:40 PM

1. Many times a house will be demolished except for frame of front door, for Prop 13 tax dodge. nt

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Response to BigmanPigman (Original post)

Fri Aug 17, 2018, 03:40 PM

2. It's a Big Problem.

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Response to BigmanPigman (Original post)

Fri Aug 17, 2018, 03:43 PM

3. If the law was enacted by a public vote

Then it probably will take another to repeal it.

I doubt there would be the votes to do it

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Response to BigmanPigman (Original post)

Fri Aug 17, 2018, 03:44 PM

4. If you eliminate the prop 13 tax break on inherited properties

being used as rentals, the increase in tax will eventually be paid by renters in the form of a rent increase.

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Response to Mr.Bill (Reply #4)

Fri Aug 17, 2018, 03:48 PM

6. What would keep renters from going to another rental

for the same going rate? Not all rentals have the Prop 13 advantage but charge the same rate as those who do.

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Response to BigmanPigman (Reply #6)

Fri Aug 17, 2018, 03:53 PM

10. Because moving costs money, too. Many can't afford this.

And in the tight housing market that exists in many areas of California, finding another place is easier said than done. The bottom line is the consumer always pays when a tax goes up, not the seller.

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Response to BigmanPigman (Reply #6)

Fri Aug 17, 2018, 04:31 PM

16. We own a house that is taxed under prop 13.

We do rent it out but at less than the going rate because we also pay lower taxes and we are lucky to have good long term tenants.
That being said, I am absolutely in favor of abolishing this tax break, and make all taxes subject to the same rules.

Eventually, there will be more voters who do not benefit from Prop 13 and hopefully it will go on the ballot again. I think the added costs for those that now benefit from it should be phased out gradually as many of people will not be able to absorb the sudden increase. The benefit will be that the added tax paid (by people like me) will help reduce the tax burden for the rest to the people. I believe it also affects commercial properties, so the increased revenue from abolishing it will be quite considerable.

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Response to pennylane100 (Reply #16)

Wed Sep 5, 2018, 09:31 AM

19. Our scenario exactly.

We, also, rent our rental cottage below market rent.
We plan on leaving the properties to our two sons.
They can do as they please with the homes, rent them, live in them or sell
them.

The Tikkis

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Response to Mr.Bill (Reply #4)

Fri Aug 17, 2018, 03:51 PM

8. Simple economics. Also, property tax has gone up significantly through the years on existing

property

They need more revenue for schools then add a separate tax that everyone pays, not just property owners

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Response to still_one (Reply #8)

Fri Aug 17, 2018, 04:14 PM

15. Prop 13 covers these other taxes in a way.

They usually require a 2/3 majority vote on the ballot. My county supervisors attempt to raise the sales tax at almost every election. Without this 2/3 requirement I swear our sales tax would be 20% by now.

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Response to still_one (Reply #8)

Sat Apr 3, 2021, 11:09 AM

27. Given we generally have a budget surplus in California

Wouldn't it be better to push for cost of living adjustments on federal taxes, such as fixing Trump's dumb SALT cap. Getting our tax dollars back from the federal government instead of the federal government using California to pay for the low taxes of rural states seems more fair. If we in California had fair and equal representation at the federal level, most of the states economic problems would not exist. Even as it is, we do run budget surpluses most of the time now.

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Response to BigmanPigman (Original post)

Fri Aug 17, 2018, 03:47 PM

5. With the inflated prices of real estate in California, trump's tax breaks which hurt states like

California where property tax deductible are limited, and ignoring the fact that existing property tax rates keep going up, the solution isnít higher property taxes

Revenue for education should be supplemented by a separate tax on everybody

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Response to still_one (Reply #5)

Fri Aug 17, 2018, 03:51 PM

7. Every time "education" based taxes

are on the ballot and passed the schools never get the revenue for some reason. Lotteries were supposed to bring money but it didn't end up in the schools.

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Response to BigmanPigman (Reply #7)

Fri Aug 17, 2018, 04:03 PM

13. and I voted for those revenues, but that is where the problem is. find out what is

happening and fix it. I assume someone is misappropriating those funds, and there really needs to be an investigation

The revenues from the lottery that were used for education were never allocated as part of the education budget, but to be used for ďextra educational expensesĒ. The public was conned on the lottery initiatives how the educational money from it was allocated

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Response to still_one (Reply #5)

Fri Aug 17, 2018, 03:57 PM

11. Employers that benefit from an educated work force

should share some of the burden for education costs.

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Response to Mr.Bill (Reply #11)

Fri Aug 17, 2018, 04:05 PM

14. I have no problem with that

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Response to BigmanPigman (Original post)

Fri Aug 17, 2018, 03:51 PM

9. Counties Levy Separate Taxes

for schools, libraries, parks, sewers, etc. Those get raised from time to time by a citizen approved vote.
Primary residences are OK as is. Inherited properties should not be exempt.
When properties get sold, the tax reflects the new sale price.

Where property taxes run wild, poorer people end up losing their homes.

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Response to BigmanPigman (Original post)

Fri Aug 17, 2018, 03:59 PM

12. as a homeowner, I absolutely love prop 13

many counties in California have witnessed obsene amounts of tax revenues from large number of sold houses in recent years at very high prices. There are parcel taxes being levied for schools so itís not an issue. School quality depends more on demographics than simply money. I think w/o prop 13, rents would even be higher than they are right now.

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Response to BigmanPigman (Original post)

Fri Aug 17, 2018, 07:16 PM

17. WHAT A BUNCH OF SHIT

I live in California. I was also TAXED before the law passed. The tax law is 1% of property value and not higher like in other states. The majority has no complaint with this TAX. It is dam greedy people who want to pay LESS.....

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Response to BigmanPigman (Original post)

Fri Aug 31, 2018, 03:16 PM

18. Our home went from $195,000 in the late 1990s

 

To now valued at over $800,000.

Through no fault of our own we'd be taxed out of our home without prop 13.


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Response to SHRED (Reply #18)

Mon Oct 22, 2018, 01:41 PM

21. I'm in a similar situation

Bought in what was then the cheaper part of Palo Alto, an older, smaller house that had been a rental and needed a lot of (mostly cosmetic) work back in the mid 1980s. It's a mixed neighborhood, with small apartment buildings and single-family houses, with a veterans' half-way house a few doors down from us and at least one more in the neighborhood. But the downtown area has become very desirable in the past decade or so and house prices have soared astronomically - and it doesn't help that some of the housing stock is occupied by start-ups and other small companies. Prop 13 is the only way I can afford my property taxes.

One of the other side effects of Prop 13 is that houses turn over less frequently, meaning more stability in neighborhoods. What I do oppose, though, are the frequent attempts to patch Prop 13 by way of other propositions to extend its benefits to sundry special interests.

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Response to BigmanPigman (Original post)

Thu Oct 18, 2018, 11:02 AM

20. People do this a lot, esp. when elderly

>>But a Los Angeles Times analysis shows that many of those who inherit property with the tax breaks donít live in them. Rather, they use the homes as investments while still taking advantage of the generous tax laws."

********************

It works for those that own properties that is for sure.

I know of a woman that owns three houses in the Bay Area.

She signed them over to relatives so she could get on Medicaid to pay for long-term kidney dialysis!. One of them is a rental that is bringing in over 5K a month.

Hell of a way to go IMO.

That's all I have to say except, FEED the RICH and by all means do ROB the poor!



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Response to BigmanPigman (Original post)

Thu Apr 1, 2021, 03:52 AM

22. CA schools

I wonder how much money CA spends on the state's school.

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Response to DonCallis (Reply #22)

Thu Apr 1, 2021, 04:05 PM

23. It's the national budget of a lot of countries ...

What California's budget deal means for K-12 schools ...
[Search domain calmatters.org/education/2020/07/what-californias-budget-deal-means-for-k-12-schools/] https://calmatters.org/education/2020/07/what-californias-budget-deal-means-for-k-12-schools/
The $202 billion budget Gov. Gavin Newsom signed into law Monday largely keeps intact funding for California's public schools, capping a turbulent couple months of budget negotiations.

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Response to DonCallis (Reply #22)

Sun Apr 4, 2021, 11:13 PM

28. Welcome to DU!

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Response to BigmanPigman (Original post)


Response to DawwidDem (Reply #24)

Fri Apr 2, 2021, 04:44 AM

25. Don't get me started on this.

It is so frustrating!

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Response to BigmanPigman (Original post)

Sat Apr 3, 2021, 11:02 AM

26. No and Yes

No, they're stupid and obviously put newer buyers at a huge economic disadvantage. Yes, because most buyers have bought with the assumption the horrible law would stay forever. Most would instantly be priced out of their home if it changed.

It's the same with why I hated the SALT tax cap. It was stupid, and absolutely fucked with the affordability assumptions people used to predict if they could afford their home.

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