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Property Tax Heaven
Old 03-14-2009, 09:41 PM   #1
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Property Tax Heaven

In California we have Prop. 13 which limits property taxes to about 1% of the assessed value and limit yearly increases to approximately 2% of same.

But we also have Pops. 60 and 90 which allow a person over the age of 55 to transfer his Prop 13 capped property tax to a new house in the same county or to another Calif. county if that county accepts transfers.

The over 55 year old sells his existing house and as long as he purchases a new house of the same or lesser value he retains his old capped property tax from the former residence.

That is just one more reason to live in California.

Any other states have this that you know about?

boont
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Old 03-14-2009, 10:28 PM   #2
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We have a 2%/year cap in Oregon, no transferability that i'm aware of - think i recall LGFNB writing that Florida had property homestead exemption up to a certain amount and transferability. Rich or Moemg will know. (where is that bamboo growing local color Lazy anyway?)

We're looking at property in the SoCal desert this week - seeing a great variety in property tax appraisal amounts and assessments - any idea how California is on someone contesting the appraisal amount? Know the state needs the bucks, but if we were to buy a foreclosed property for $50k and it was tax appraised at $80k do you think we would have a shot at getting the tax appraisal reduced? any idea of the mechanism?
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Reduction
Old 03-14-2009, 10:57 PM   #3
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Reduction

I have some property whose taxes were reduced without even asking. I could get some more by going through the normal challenge.

So far, I've just been too lazy. I should probably do that.

b.
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Old 03-14-2009, 11:42 PM   #4
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In California we have Prop. 13 which limits property taxes to about 1% of the assessed value and limit yearly increases to approximately 2% of same.



Any other states have this that you know about?

boont
Even better, Prop 58 Parent/Child transfer excludes reassessment even if it is a sale!!

Calmloki, in CA assessed value has nothing to do with market value. Prop 13 allows taxing the lowest of factored base value or market value. Foreclosure sales amount are routinely rejected as it is not an arms length transfer, etc. and the assessed value is market which is generally higher than bought on the court house steps although if you can show deferred maintennce etc. you can make a strong arguement for a lower than market assessed value.

Boont
NV started capping owner occupied properties at 3% but rentals are limited to 8%. That's what CA should have done. I know people that bought 20-30 homes since the 60's who charge market rents but CA is subsidizing their taxes to the tune of about $6,000 per house per year!! Don't get me started on business properties!
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How's That Again?
Old 03-15-2009, 12:32 AM   #5
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How's That Again?

Honobob,

I've tried but I just can't seem to follow what you are saying. So maybe you could help me on that.

In short, I would say that to be able to live in California, with it's normally (not right now) strong economy, and it's vacation all year round weather, cannot be compared to the Nevada desert. Accepting all the wonderful things about Nevada that I like.

I want to live in a state with a hot economy and low costs for retired folks. In my opinion, contrary to popular belief, that is where to live.

You will not stagnate here, and if things go sour, personally, there are jobs. Plus, you live in an area that sets the tone for the rest of the nation and then the world in just about every category I can think of.

I am on Twitter and Second Life and You Tube selling thousand of my DVDs through social groups world wide, because I live in California.

Good luck in low cost Detroit.

boont
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Old 03-15-2009, 02:23 PM   #6
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Indiana has just passed a law to cap property taxes on owner occupied at 1% of assessed value. Rentals are 2% and businesses are 3%.
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Old 03-15-2009, 02:25 PM   #7
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Of course, Prop 13, 60 and 90 effectively result in yet another of many transfers of wealth from the young generation to the old, but that's another story.

I remember when I bought my first small condo in CA and I paid twice as much as my parents did in property taxes despite their nearby house being worth three times what my condo was worth. Add to that their higher income and lower mortgage payment...
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Old 03-15-2009, 02:39 PM   #8
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I don't like property tax situations like those that exist in California, Florida, and I'm sure, other places. I think two families, who live in identical houses should be assessed the same property tax. If one wants to give those over 55 (or some other arbitrary age) a deduction against their taxes, that's fine (it's done with income taxes). But to have two 45 year-olds living in identical houses next door to each other with wildly different property tax bills is ludicrous, IMO. It reminds me of rent control in NYC.
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Home Sweet Home
Old 03-15-2009, 03:30 PM   #9
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Home Sweet Home

" But to have two 45 year-olds living in identical houses next door to each other" Fire'd

The facts are, that houses turn over through re-sale about every seven years, so the discrepancy corrects itself rather quickly. The property tax resets with each new higher priced sale.

The huge advantage is that older folks are not pushed out of their homes by constantly escalating property taxes.

It seems to me the short term discrepancy in cost to one party, is a small price to pay so retired folk can stay in their homes.

b.
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Old 03-15-2009, 03:49 PM   #10
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Well, you may not like this..but R U Kidding Me ! Cal. RE tax is only 1% of the A. V. ?
Geech, no wonder That state is going broke all the time! and how much in the Hole this time around? %50-$60 Billion is it? California Becomming the Next welfare state? No Wonder The Pres. Has been saying things like..No $ for Swimming Pools..LOL

and let me get this straight..
> Your Education system is in Shambles and Broke
> Your Medicade is Broke issuing Vouchers and IOU's
> You state Employees are getting Laid off to Hours/days cut
> You have some of Highest UnEmployment in the country..
> So you get a Bail out from the Fed to pay it off?
> And inturn you only have to pay 1% RE taxes?

Nice if you can get it I guess!

Well there's another 10% in cheating I have to do on my taxes..

Here in the NShre of Chicago? Our homes pay about 3% of AV.. $500k Home = about $15,000 in RE taxes..
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Old 03-15-2009, 04:07 PM   #11
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In Texas at age 65 you can defer the taxes till death. Then they are paid by your estate plus 8% simple interest. Takes away from what your estate would have, but you enjoy the money while you and spouse are alive.
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Old 03-15-2009, 04:22 PM   #12
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In Texas at age 65 you can defer the taxes till death. Then they are paid by your estate plus 8% simple interest. Takes away from what your estate would have, but you enjoy the money while you and spouse are alive.
Actually, I think that's a pretty good idea. Perhaps something like that should be done for nursing homes instead of having it paid by Medicaid.
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Old 03-15-2009, 04:27 PM   #13
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"R U Kidding Me" Dennis

Let us not get carried away. California has the 8th largest economy in the world. That includes all the nations.

"Going broke all the time." Like Wall Street there are some bad years but over all the state is so far ahead of everyone else it's hard to compare.

If you are young and have anything going for you, you either go to New York or California. California is where the future is. From Silicon Valley to digital movie making and the internet that is where all the growth and all the jobs are going to be.

I'd advise you send your children West and out of the Rust Belt.

b.
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Old 03-15-2009, 04:32 PM   #14
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In Texas at age 65 you can defer the taxes till death. Then they are paid by your estate plus 8% simple interest. Takes away from what your estate would have, but you enjoy the money while you and spouse are alive.
IMO, this is much better and fairer than a blanket senior exemption. I suspect the seniors of wealthier means would sooner pay the tax than eat 8% interest off of their estate, but those who can't afford the taxes don't get taxed out of their homes.

If the idea behind these laws is to keep seniors on limited "fixed incomes" (a term I really hate since a $100K annual pension is "fixed income") in their homes, then let's see to it that the help goes to those most vulnerable to being taxed out of them.
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Old 03-15-2009, 05:39 PM   #15
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"R U Kidding Me" Dennis

Let us not get carried away. California has the 8th largest economy in the world. That includes all the nations.

"Going broke all the time." Like Wall Street there are some bad years but over all the state is so far ahead of everyone else it's hard to compare.

If you are young and have anything going for you, you either go to New York or California. California is where the future is. From Silicon Valley to digital movie making and the internet that is where all the growth and all the jobs are going to be.

I'd advise you send your children West and out of the Rust Belt.

b.
Great place to get a pensioned job and retire to a cheaper part of the country
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Old 03-15-2009, 05:49 PM   #16
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Florida has a 3% property tax cap, a homestead exemption, and portability if you move in-state.

The taxes are generally high to start with, but over time the cap keeps you in pretty good shape. We saw a tiny decrease last year.
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Old 03-15-2009, 08:51 PM   #17
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Well, you may not like this..but R U Kidding Me ! Cal. RE tax is only 1% of the A. V. ?
IMHO CA's problem isn't that they tax too little - they spend too much! Same as every other state - only more so. And, yes, I'd gladly give up some of the "services" that the states provide if it would lower my taxes.

Case in point. We're in the process of spending $4MM on highway beautification of the main road through Windward Oahu. (that's $4.00 for every man, woman and child on Oahu!) For that, a stretch of less than a mile is getting planter boxes with irrigation down the middle and sides of a 6 lane highway. During the past 15 months, the road has had periodic lane closures to allow for the work, so traffic is typically snarled there several times/week.

Now, when this particular stretch of beautification ends, the road suddenly becomes 2 lanes (yes I said 6 lanes down to 2!) and is a nightmare during rush hour. That $4MM could have been used to put in a reversible lane (just enough room without cutting into the mountains on either side) on the 2-lane portion. Would make all the difference, though it would be ugly as sin, I suppose. So, thanks for spending my tax $ on something that looks kinda nice but does nothing for what a road is intended to do - i.e., move traffic effiently. Just a very small (if you can call $4MM very small) example of how tax money is wasted.

Of course, opinions vary just as does mileage.
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Old 03-15-2009, 08:54 PM   #18
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IMHO CA's problem isn't that they tax too little - they spend too much! Same as every other state - only more so. And, yes, I'd gladly give up some of the "services" that the states provide if it would lower my taxes.

Case in point. We're in the process of spending $4MM on highway beautification of the main road through Windward Oahu. (that's $4.00 for every man, woman and child on Oahu!) For that, a stretch of less than a mile is getting planter boxes with irrigation down the middle and sides of a 6 lane highway. During the past 15 months, the road has had periodic lane closures to allow for the work, so traffic is typically snarled there several times/week.

Now, when this particular stretch of beautification ends, the road suddenly becomes 2 lanes (yes I said 6 lanes down to 2!) and is a nightmare during rush hour. That $4MM could have been used to put in a reversible lane (just enough room without cutting into the mountains on either side) on the 2-lane portion. Would make all the difference, though it would be ugly as sin, I suppose. So, thanks for spending my tax $ on something that looks kinda nice but does nothing for what a road is intended to do - i.e., move traffic effiently. Just a very small (if you can call $4MM very small) example of how tax money is wasted.

Of course, opinions vary just as does mileage.
Ya Ca just voted in 1% sales tax increase. Plus DMV fee increases. Wonder why so many people choose online sales vs local here. Wont be long till they shut that down either.
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Old 03-15-2009, 09:15 PM   #19
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Florida has a 3% property tax cap, a homestead exemption, and portability if you move in-state.

The taxes are generally high to start with, but over time the cap keeps you in pretty good shape. We saw a tiny decrease last year.
Don't forget--NO STATE INCOME TAX!!! Relative to cost of living area, there is no tax on food. Question? Are there any states where you still pay tax on food stuffs?
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Old 03-15-2009, 09:30 PM   #20
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Don't forget--NO STATE INCOME TAX!!! Relative to cost of living area, there is no tax on food. Question? Are there any states where you still pay tax on food stuffs?
2.5% sales tax on food in VA, 5% on everything else. I believe Tennessee has a 7% sales tax on food.
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