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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Live2Sail who wrote (168678)	12/3/2008 1:27:33 PM
From: Peter V	Read Replies (2) \| Respond to of 306849

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?

To: Live2Sail who wrote (168678)	12/3/2008 1:28:08 PM
From: No Mo Mo	Respond to of 306849

What are the chances, though? It'd probably have to be done by referendum. What property owner who's been in for more than six or eight years would take the chance on taxes increasing? Those who sit on high value properties and have been in for more than that time would a) stand to pay a lot more and b) contribute money like crazy to any campaign to keep the status quo. I live in one of the few working class sections of San Francisco. I just paid the first half of my property tax yesterday and the taxable value of my house is only $30K over what I paid for it in 1996. Yes, I got the house for a song at the time. Yes, I've put a lake of sweat equity into it. I haven't looked at values in a while but I think they'd have to go down by more than 50% from HERE before an ad valorem tax would be a wash for me. How about folks in Noe Valley, St. Francis Woods, Pac Heights, Atherton, Los Altos Hills, etc.? If they've been there as long as me or longer, they'll fight tooth and nail against a change. I don't have a final opinion as I haven't thought about it at length (mostly b/c I've seen Prop. 13 as immutable). In principal, I'm with you and Lizzie. The system is not fair as is.