I sold my house and I'm renting, but I still disagree that Prop 13 should be gotten rid of.
If you make a certain amount, and base your housing expenditure on mortgage and taxes, why should you get priced out simply because your house grows absurdly in value?
Take my house that I bought in 1996 for $250K. At the peak it was probably worth nearly $1 million (I sold it long before then, unfortunately). Let's use your 1.25 percent as the tax rate.
Tax on $250K is 3125, or $260 a month. Tax on $1M is 12500 or $1,042 a month. Obviously, that's a huge difference, especially for someone on a fixed income. Or even someone with a job, considering incomes did not rise nearly as fast as housing prices.
I think Prop 13 was made for the type of scenario we have had in the past 10 years: stupid, unrealistic housing price increases that had no correlation to income or inflation.
If you chose to pay that kind of money for a house, that's your choice, and you have to live with the tax consequences. If you chose not to "upgrade" your house, then you pay property tax that is closer in line to actual increases in the cost of living (Prop 13 allows for annual increases), rather than a speculative bubble of a housing market.
Not to mention that in a bubble, housing prices are all over the map, and it's hard to get a true gauge on what a house should be assessed for. Why should you get hammered just because your neighbor threw all reason out the window and paid a whole bunch over the asking price just so he could be sure to "get" the house? |
