Are CA property tax laws still appropriate?

[BigmanPigman]

"..... 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 — 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 don’t 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#

[Bernardo de La Paz]

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

[byronius]

2. It's a Big Problem.

[Kilgore]

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

[Mr.Bill]

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.

[BigmanPigman]

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.

[Mr.Bill]

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.

[pennylane100]

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.

[Tikki]

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

[still_one]

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

[Mr.Bill]

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.

[Johonny]

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.

[still_one]

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 isn’t higher property taxes

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

[BigmanPigman]

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.

[still_one]

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 “extra educational expenses”. The public was conned on the lottery initiatives how the educational money from it was allocated

[Mr.Bill]

11. Employers that benefit from an educated work force

should share some of the burden for education costs.

[still_one]

14. I have no problem with that

[The River]

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.

[AlexSFCA]

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 it’s 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.

[ROB-ROX]

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.....

[SHRED]

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.

[Retrograde]

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.

[CountAllVotes]

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 don’t 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!

[DonCallis]

22. CA schools

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

[marble falls]

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.

[TomSlick]

28. Welcome to DU!

[BigmanPigman]

25. Don't get me started on this.

It is so frustrating!

[Johonny]

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.