Property tax hacks in California

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quantAndHold
Posts: 3438
Joined: Thu Sep 17, 2015 10:39 pm

Re: Property tax hacks in California

Post by quantAndHold » Sat Mar 16, 2019 10:24 am

Ron Ronnerson wrote:
Sat Mar 16, 2019 10:15 am
...

If you can keep housing costs under control in California, other pieces can fall into place nicely.
This is the money quote. Especially in retirement, everything flows from what you originally paid for the house.

DrGoogle2017
Posts: 2528
Joined: Mon Aug 14, 2017 12:31 pm

Re: Property tax hacks in California

Post by DrGoogle2017 » Sat Mar 16, 2019 10:45 pm

quantAndHold wrote:
Thu Mar 14, 2019 7:17 pm
Thesaints wrote:
Thu Mar 14, 2019 7:05 pm
Prop 13 extension to children/grandchildren will go, I'd say sooner rather than later.
On the other hand, how did you increase your original 400k cost basis to 1.4M ? For 1M you can probably rebuild the house.
There are a *lot* of places in my neighborhood that have been in the same family for 3 generations. Many of them started out life as 800 sq ft 2 bed 1 bath bungalows. Now the “original” house is 2500 sq ft, and there’s a 800 sq ft granny flat in the back. And they’re paying $1200 in property taxes.

Agree that the inheritance thing needs to go. My heirs will deal with it just fine.
There’s a guy who works at my local nursery. He inherented a house from his grandfather, he wouldn’t be able to afford otherwise. I have doubt it will go away because it benefits many low income people.

DrGoogle2017
Posts: 2528
Joined: Mon Aug 14, 2017 12:31 pm

Re: Property tax hacks in California

Post by DrGoogle2017 » Sat Mar 16, 2019 10:50 pm

Ron Ronnerson wrote:
Sat Mar 16, 2019 10:15 am
quantAndHold wrote:
Fri Mar 15, 2019 1:32 pm
mervinj7 wrote:
Fri Mar 15, 2019 12:35 pm
seed4great wrote:
Fri Mar 15, 2019 12:17 pm
Somehow nobody mentioned another part of Prop 13, in particular 1% cap:
Proposition 13 capped, with limited exceptions, ad valorem property tax rates at one percent of full cash value at the time of acquisition.
I wonder how anyone could pay $30K property tax for the home worth $2.5M, like topic starter hammond does?
1% is the general levy. On top of that, there can be voter-approved levies and special assessments.

https://lao.ca.gov/reports/2012/tax/pro ... 12912.aspx

Here's an example of a home that sold for $2.4M in Cupertino which has a property tax rate of 1.16%. The previous owners paid $1,808 in property tax in 2016 on a accessed value of $114k. In 2018, the new owners paid $28,841 or $2.4M*1.16%+$766.

https://www.redfin.com/CA/Cupertino/109 ... ty-history
Current Taxes: https://payments.sccgov.org/propertytax/Secured
The Bay Area, in particular, has a lot of those voter approved levies. Southern California is better in that respect.
I can vouch for that. My house in the Bay Area is assessed at $566k and our property taxes are $9,900. It comes to a rate of about 1.75%. The special assessments definitely add up. My strategy is to stay in our home for the long term. Some of the special assessments are set to eventually go away and inflation is outpacing the annual property tax increases. This approach (of not moving) is not really a "hack" but does slowly helps ease the burden. By not moving, the transaction costs of buying & selling a home, moving, furnishing, etc. are eliminated too. Those things aren't cheap when you're talking about coastal California. So it's good that one can avoid (or at least minimize) these expenses by staying put.

We have found a way to "hack" income taxes (and qualify for government benefits) that are related to keeping housing costs in check but I don't want to derail the discussion since your question focuses on property taxes. I just wanted to mention that different things are often connected. If you can keep housing costs under control in California, other pieces can fall into place nicely.
Yeap, as I found out weekly. Bought loads of vegs and fruits at the farmers market for $13. So cheap I tipped them $1. Grinning from ears to ears as I talk with my husband. 4 Myer lemons for $1, what’s not to like.

HEDGEFUNDIE
Posts: 3658
Joined: Sun Oct 22, 2017 2:06 pm

Re: Property tax hacks in California

Post by HEDGEFUNDIE » Sat Mar 16, 2019 10:59 pm

DrGoogle2017 wrote:
Sat Mar 16, 2019 10:50 pm
Yeap, as I found out weekly. Bought loads of vegs and fruits at the farmers market for $13. So cheap I tipped them $1. Grinning from ears to ears as I talk with my husband. 4 Myer lemons for $1, what’s not to like.
On and around my property I have access to apple, fig, avocado, lemon, pear, orange, and persimmon trees.

As local as you can get!

shell921
Posts: 344
Joined: Fri Jul 06, 2018 5:13 pm

Re: Property tax hacks in California

Post by shell921 » Sun May 05, 2019 12:48 pm

Any seniors in California reading here who have done this:
...........................................

Under Proposition 60, California homeowners 55 and older get a one-time chance to sell their primary residence and transfer its property-tax assessment to a new one, but the market value of the new home generally must be equal to or less than the market value of the old home.Jun 19, 2012

https://www.homehero.org/blog/lifestyle ... or-seniors

.............................
The article says :
"After you’ve finalized the sale of your old home and the purchase of your new one, fill out the claim form BOE-60-AH, Claim of Person(s) at Least 55 Years of Age for Transfer of Base Year Value to Replacement Dwelling, which you can obtain from your local County Assessor’s office."

If you did this, did it all go smoothly?

grainne
Posts: 12
Joined: Tue Apr 30, 2019 8:10 pm

Re: Property tax hacks in California

Post by grainne » Sun May 05, 2019 1:06 pm

Sandtrap said it well. Consumers and investors need to do this more often.
Consider the source.

smby
Posts: 31
Joined: Wed May 30, 2018 12:14 pm

Re: Property tax hacks in California

Post by smby » Sun May 05, 2019 2:17 pm

i pay $35.2K in property tax a year. My neighbor on on side pays $1.6K a year for same size of plot and on the other side pays $5.5K for same size....Welcome to California :)

Broken Man 1999
Posts: 3484
Joined: Wed Apr 08, 2015 11:31 am

Re: Property tax hacks in California

Post by Broken Man 1999 » Sun May 05, 2019 5:24 pm

We have a similar situation on property taxes in Florida. My neighbors pay much more in taxes than I do as they have only been neighbors for five years, whereas wife and I will be in our casa for thirty years this fall.

In some cases some of an existing cap can be applied to a new residence, as my daughter was able to do so when she moved into a new house last year. Not sure of the mechanics as we have never considered moving from our home.

So it can certainly lead to eye-popping differences in neighborhood property taxes.

We are fine with it, of course. Works for us.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

lotusflower
Posts: 258
Joined: Thu Oct 24, 2013 12:32 am

Re: Property tax hacks in California

Post by lotusflower » Mon May 06, 2019 1:07 am

NorCalDad wrote:
Fri Mar 15, 2019 8:28 am
baconavocado wrote:
Thu Mar 14, 2019 6:52 pm
Seriously though, I think there are problems with Prop 13. I hope someone figures out a way to fix them someday. Sounds like there's momentum building to do away with the inheritance provision.
Sentiment is definitely changing, though Prop. 13 has been the third rail of politics in California. Voters last year rejected Prop. 5, which would have expanded those Prop. 60/90 rules to moves anywhere in California instead of just within the handful of counties that allow it. Consider that Prop. 90 had nearly 70% support in 1988, while Prop. 5 failed badly three decades later with only 40% support.
Well sure there's sentiment, the majority of voters probably want some reasonable changes. The problem is that it requires a two-thirds vote in a state-wide referendum to make ANY changes to it. So that's somewhere between 3 to 9 million voters who have to say yes to raising their own taxes on the same day. It's basically impossible.

SrGrumpy
Posts: 1176
Joined: Wed Aug 05, 2015 3:21 pm

Re: Property tax hacks in California

Post by SrGrumpy » Mon May 06, 2019 9:42 am

smby wrote:
Sun May 05, 2019 2:17 pm
i pay $35.2K in property tax a year. My neighbor on on side pays $1.6K a year for same size of plot and on the other side pays $5.5K for same size....Welcome to California :)
Similar story here. I pay about $5,000 (my biggest expense, ugh). My next-door neighbor - in the exact same house model - pays $20,000. For all the talk about California's sky-high cost of living, there's no way I could afford to live in any other state with a hilltop house Zillowed at $1.4 million.

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