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Non-Tech : Income Investing

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To: E_K_S who wrote (52035)	10/24/2025 11:29:37 AM
From: Privately	of 52045

Re: Also if you are not covered by Proposition 13 (now Prop 19) the property taxes i one of our sons bought a house in our neighborhood this year and he pays about 10X what I do because he bought this year. It really hurt because he had a house with a tax base about 1/3 of market, but he lost that base when he sold and bought the new one (because he is under 55). quirks about prop 13/19 - Your tax base is transferable if you are over 55 (or disabled, or...), so you can sell and buy another house in California and keep your old property tax base. You can even "downsize" and your base is prorated. A friend sold his house here and moved out of the bay area. His new house cost 1/3 of what he sold old house for - so he pocketed a couple of million $ (capital gain) and got a tax base on the new house that is proportionate to his old house (his tax base on his old house was about 10% of market). sweet deal. your tax base is inheritable. I have a friend who inherited his parents house 20 years ago (when he was in his 30s) and still has their $40K tax basis (on a $2.5M house). The rules changed a few years ago (I am not current). Inheritance is still allowed, but has more rules/complications (of course it does! its the government of the Peoples Republic of CA!). If the value of your home drops below what you paid for it, you can ask to have your home re-assessed and you will pay property tax on the lower value. Lots of folks did this around 2007. The catch is that if your home value goes back up, they can re-assess it back up to your prop 13 base (i.e. the initial reassessment doesn't lower your prop 13 base, it only creates a temporarily reduced base). Lots of people got a big surprise when the market recovered after the financial crisis and their property taxes spiked up.

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