Well that?s why the system can?t be fixed the voters and residents of California don?t want to give up the low property taxes. But the high fees/other taxes the state charges businesses and residents to try and pay for the shortfall (it is still not enough) drive new businesses and new residents away as they are the ones paying for it.
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Good posts Kingfish.Comment
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Well in my case I live in an apartment building I bought 8 years ago (with a mortgage). The place was not cheap and my property taxes are $13K per year. It barely turns a profit and the rents basically pay the mortgage.
So in any other state I would need to sell off early cause the property tax increases would eventually eat away at my profits.
So while there are people that bought 35 years ago that fit into your scenario, there are plenty like me that bought within the last 10 too. And California properties are not cheap.
So not sure what the best solution is.Comment
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well the property taxes are really not all that low being that the price of the house/land is inflated 5 times what it should be. It pretty much is a break even with other states.Comment
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Here's a question for everyone:
Have most other states seen the same massive state wide home appreciation jumps that California has seen over the last 40 years?
My mom bought her home back in 1977 for $54K and it's now worth close to 1 million. She has never made a lot of money and still barely gets by. Sounds like in any other state she'd be screwed having to constantly sell and downgrade with every appreciation. Starting off with a home and ending up in a studio at the end.
Basically in any other state you better hope your home doesn't appreciate 20 fold or you're screwed.Last edited by Meloman; 06-22-2010, 08:18 PM.Comment
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My state is one of those that taxes on the properties value and the reassess every year or two. About 10-12 years ago we passed a measure that capped the percentage of the value of your home they could charge in property taxes without a vote allowing an increase. Ever since then property values have gone up and up and up. While part of this is attributed to the rapid growth in the area, I'm sure a decent amount of it is the government simply increasing the value of the home so they can charge more taxes.
Your worry about people retiring and affording a house is something I saw with my own two eyes. One of my best friend's grandparents bought a house in the 60's and lived there until about 6-7 years ago. It had long since been paid off, but they retired and were on pension income so they didn't have a lot of money. Every year their property taxes went up and then their neighbor died. The neighbor owned all the land around them and his kids sold it. The new developer was going to build 300k+ houses in there. My buddy's grandpa knew he couldn't afford to live there once those houses went in so he sold the house to my buddy and his wife. They lived their 5 years and saw the value of the house go up by 50% once the development was done and their property taxes went through the roof. They eventually sold the house because they outgrew it, but it was sad to see his grandpa who had worked his whole life to build a nice home for himself have to move into an apartment because of taxes.Comment
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While it hasn't been that crazy where I live there has been a huge jump. The house I grew up in my mom bought in 1979 for 32K. It was a killer house to grow up in. Big back yard, right on a creek that you could swim and fish in and the house had 4 bedrooms, 2 baths and was a decent size. She sold it in 1990 when I got out of high school for about 45K. It was actually on the market about 2 years ago and the new owners wanted 210K for it.Comment
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I agree those who bought in fairly recently don?t get as much of a benefit from the low property taxes. But you are incorrect about being priced out of your complex. If the value of you real estate goes down your property taxes go down in a market based system. With an apartment complex your rental income largely determines the value of you complex so as long as you didn?t overextend yourself to start with you wouldn?t be taxed out of your complex. To answer a point you made earlier about income taxes on increased rental profits making up for it that is not the case. If we look at what typically happens in CA when the 70 year old dies he transfers his basis in the home to his kids. The kids seeing dad had such a low basis in the home decide to rent it instead of sell it, but to get their money out of the home they refinance it for its current value less whatever deposit the bank requires and vola since what it takes to make profit is much higher with the new debt they don?t turn a lot of paper profits on the real estate and don?t end up paying much of anything in income taxes. What income taxes they do pay go mainly to the Feds not the cash strapped State Gov. I don?t deny working this system made people a lot of money, but like any pyramid scheme those who buy in late usually get the shaft.
As to your mom they have things called reverse mortgages for people in your mom?s situation. Hell if I was your mom I?d sell or rent the place and take the cash and move to a state that has a low cost of living where she could live like a queen for the rest of her days, and not have to worry about just getting by.
Last edited by Kingfish; 06-22-2010, 08:42 PM.Comment
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Last edited by theking; 06-22-2010, 08:44 PM.When you're running down my country hoss...you're walking on the fighting side of me!
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But that is the way it works everywhere else, and it is the natural progression of life. Typically the elderly don?t need as big of a home, as their kids have moved out, it becomes difficult for them to physically take care of or they simply can?t afford to maintain it. There is nothing wrong with that system. Yes as we get old things in life change and sometimes it is sad, but that is the way it is. For those determined to stay in their homes there are reverse mortgages, special state programs as others have mentioned and a variety of other vehicles to assist them. Bottom line is California is bankrupt because of their unique property taxation system how to you propose to solve the problem?
Last edited by Kingfish; 06-22-2010, 08:56 PM.Comment
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I don't really follow you there. It is sort of a national progression of life. As you age, you don't need that large home. Why should the rest of the state shoulder that financial burden so an older couple can hold onto the memories? Yeh, it's sentimental and romantic and all that... but practical? Hardly.
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So it sounds like what everyone is saying is getting royally fucked when you're old is just part of life, so tough just deal with it.
Or they should sell off, move away, leave all there family and friends behind and live the good life all by themselves but with more money.
Or take a huge reverse loan and the bank takes the home after death. Sorry no inheritance for any children, the bank has the home now.
Btw, my moms 1 million dollar home is barely 1200 square feet in a working class neighborhood. She's 70 and is able to take care of it no prob. it's not that big.
Sorry I disagree with most points in this thread.Comment
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Again that is why you state is bankrupt. You and your fellow residents disagree. What are you going to do about it?
It?s not about getting fucked it is about accepting getting older. My two oldest kids moved out a couple of years ago to go to school and start their own family. It made me sad for a long time, but it was time for them to move on and become adults. I have accepted it as it is a natural part of life and getting older. I don?t understand why you have such a hard time accepting it. The other way to look at it is how fortunate your mom is she can retire a millionaire and move someplace that is a short plane ride to SF so you can visit her often.
BTW The reverse mortgage works the same way the bank wouldn?t get the entire value of the home just what you mom took out of it in equity.
Last edited by Kingfish; 06-22-2010, 09:20 PM.Comment
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1. For one I don't believe our property tax laws are our sole reason for the current financial problem
2. I don't have any solutions. I don't really follow politics enough to really understand why we're in this position to being with. But i do know that 10 years ago we had a budget surplus. What happened between then and now? Our property tax laws weren't any different.
And my mom is in poor health & uneducated. There's no way she could go move away to some state by herself. All her friends and family are close by. So it kinda sucks hearing that the solutions the 49 other states have basically would screw her.Comment
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It isn't the sole reason but is a primary reason. The State Legislators providing generous services for an ever growing population and not inceasing the tax base enough to pay for this is a primary cause where as in most states property taxes are increased to help provide the tax base necessary to pay for the services provided.When you're running down my country hoss...you're walking on the fighting side of me!
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I suppose that you also believe that adding 30 million deadbeats to the health care system will "lower costs."
And that you believe in the Tooth Fairy.
Have you ever been to Stockton CA? There are gunshots every night.
And, there are hundreds of other cites as bad or worse: St Louis, Killadelphia, Camden, Detroit, etc..Comment
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I hope California pulls through this relatively unscathed. It really is quite a beautiful state. The variation in terrain, weather and even people makes it a neat place to be. I'll go back, eventually. Lie on the beach for a week, probably :DNeed custom blog posts or articles? Hit me up: Blog And Article Writer
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In a Nutshell you have state revenues based on mid 1970s valuations, but all your state expenses are based in 2010 and go up each year because of inflation. Your property tax system created a bubble. If I am correct, I believe the valuation of real estate in CA dates all the way back to 1975. (I am not going to look it up but that is close) For several years you had a huge boom as people built a lot of new homes due to the housing shortage caused by your property taxation system. But as you get further and further away from 1975 with more and more people paying less than market value in property taxes and with less new construction to offset this the more your budget shortfall is going to grow. If the state could pay people the same salaries, the same construction costs for new buildings, and anything else they buy at 1975 rates they would be fine, but they can?t. Further compounding that situation is the state now has to try to make up for the shortfall by charging excessive fees and or other taxes further decreasing you tax base as you drive new residents and business away.
Last edited by Kingfish; 06-22-2010, 10:09 PM.Comment
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Gotcha, makes sense.
But I think what makes California unique compared to other states is our 20 fold property appreciation value's compared to other states. Following what everyone is saying would mean that in the San Francisco Bay area where the average home price is $500K+, i would see non stop major property tax increases for life.
I just don't think it's right that elderly people get forced out of there paid off home cause of property tax. This should be the time of their life to relax and not stress. Declining health is enough to worry about. Now they would need to worry about loosing there home with each passing years property appreciation.
There has to be a better solution.Last edited by Meloman; 06-22-2010, 10:20 PM.Comment
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Actually, I and others have been saying that for a while, and not just about California, but the entire United States is going to do it. Further, because they can't afford to let rich people flee, they will enact capital controls to try to prevent assets from being taken out of state or out of the country. This has already begun. It's going to get worse. Finally, the rich will resort to selling their assets and trying to move out of the country -- like I did, since I saw this shit coming years ago.Comment
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No one should have an absolute,unlimited right of land ownership. Not the native americans or european immigrants or anyone else.
The earth belongs to everyone. Eliminate the income and sales tax and replace it with land and water taxes. Income taxes and sales taxes lead to government spying on its citizens. Income and sales can be hidden or not reported while land is seemingly impossible to hide from tax collectors.
People who own more land or water or natural resouces, should pay more to the government and military for the defense of their land,water and the right to exclude all others from staying on their land.
Higher land taxes (and reducing other taxes) will encourgage landowners to share (sell) their land to non-land owners. Land,water, and natural resources are not created by man's labor. They simply exist and are claimed. Just because you came first (or killed the previous owner) is a poor excuse to own some land for eternity.
I would like to see an ebay style auction system where anyone can bid on any land plot in the country (and world). The person who agrees to pay the most taxes on the land wins the land for 1-5 years or so, until the next auction. If no one bids on a parcel of land, then no taxes are paid and the previous owner retains the title.Last edited by iseeyou; 06-23-2010, 05:57 AM.Comment
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No it?s a simple math problem each year they get less and less revenue from property taxes. To try and cover this decline they raise taxes and fees on everything else. Fix the property tax system and the taxes and fees in other areas can be lowered.
They have cut their funding to state prisons so much that the Federal Court system sized control of them as they didn?t meet minimal constitutional standards. So unless they want to set all of their prisoners free, close all their universities, close all their parks, fire all of their teachers, firemen and policemen they are at the end of their rope on cutting spending.
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Your not special. No Guarantees in life. Not even right now with this administration in office. What about people right now who have lost there jobs and can't get a job and lost there homes. Im not talking about people who went and bought homes the could not afford but small dinky town homes for 80k. Its just getting worse.SKYPE#: davievegas - email: ddmedia702[at]mail[.]comComment
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Explain to me how Social Security and property taxes are even remotely similar? People pay into Social Security their whole life, they are owed that. Property taxes are an expense that people have to pay in order to maintain their home. Are you suggesting that a 70-year-old with 15 years left on their mortgage should not have to pay that either?Vacares - Web Hosting, Domains, O365, Security & More - Paxum and BTC Accepted
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Property Taxes are the Government's way of reminding you... they own everything. You are still just a renter.SIG TOO BIGComment
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How else are they supposed to maintain roads, highways, and every other public thing you interact with, though? Taxes are a neccesary evil. The more city workers/beaurocrats make, the higher taxes will be. the more the concrete company charges, the higher the taxes will be. The more the worker at the concrete factory makes, the higher taxes will be.
If a place wants to be expensive to live in, expect to get raped by taxes
You aren't just paying for the nice smooth road in front of your house, you're paying the wages of 50 people down the line that were somehow involved with that road :\
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Oh I know, I don't disagree.How else are they supposed to maintain roads, highways, and every other public thing you interact with, though? Taxes are a neccesary evil. The more city workers/beaurocrats make, the higher taxes will be. the more the concrete company charges, the higher the taxes will be. The more the worker at the concrete factory makes, the higher taxes will be.
If a place wants to be expensive to live in, expect to get raped by taxes You aren't just paying for the nice smooth road in front of your house, you're paying the wages of 50 people down the line that were somehow involved with that road :\
SIG TOO BIGComment
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Good point that people pay into social security and are entitled to it back. My reply was more or less about "there's no guarantees in life".
I still think people are failing to realize how quickly and high our appreciate is in Cali. And i'm not talking just small areas. The Bay Area is huge. Everything here doubles in price every 10 years. Even with the current downturn I know full well it'll pick up again.
No one is going to convince me that it's perfectly reasonable to raise property taxes yearly to keep up with home values to the point that no one older & retired can ever afford any longer.Comment
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When you're running down my country hoss...you're walking on the fighting side of me!
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Btw, what IS the average % nation wide for property tax?Comment
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The existing taxes have been spent...and leaves a current deficit of 19 billion dollars and a predicted deficit next year of 37 billion dollars...so I repeat what taxes do you want raised or what services do you want terminated. Those are the only two choices that exist.When you're running down my country hoss...you're walking on the fighting side of me!
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