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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: GraceZ who wrote (8951)2/17/2003 12:06:12 PM
From: Lizzie TudorRead Replies (2) of 306849
 
What would the yearly property tax be on a half million dollar new house? On the same price that was grandfathered by prop 13?

A new house is around 1.25% on average. It depends on how many local bond measures are out there... in SF they have 1.5 in some areas thanks to the zoo. (geez- you gotta have a good zoo, glad the voters passed that one <gg>)

But the problem is some areas like mine literally have houses that were sold for around 100K in 1979 that are now over 1 million. The cost of houses have a lot to do with the proximity to huge SV employers, as well as land size. So the longtime holders pay under $2K for property taxes and the new people $15K. There was a big whoosh of appreciation in the early 80s right after the law went into effect so the really low rates are always one age group.

Without this law, the harsh reality is that these prices would force owners to move. Imo that would be a good thing, that is the natural ebb and flow of a market. Retired people really have nothing to gain from owning a home next to Oracle, when land is tight. They should take their money and move on. But they don't, because its such a gravy train, they can just keep the house and rent it... if they sell there is no way to get the situation back (i.e. get that house back at the same prop tax rates).
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