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-   -   Neighbor not paying her fair share of property tax? (https://www.early-retirement.org/forums/f28/neighbor-not-paying-her-fair-share-of-property-tax-77930.html)

marko 07-11-2015 07:07 AM

Quote:

Originally Posted by samclem (Post 1612899)
If the tax system is a "benefit", then I'd like to leave my share of that one to others. :)

See Sam! You got it all wrong. It's not a tax, it's a benefit.

stephenson 07-11-2015 07:49 AM

Very interesting breakout of those of us willing to "let it slide" and those somewhat incensed by paying for someone else's infringement of the law, or even illegal activity.

Wonder how the two sides would feel if it was their banking or investment company explaining to them why they needed to average returns on investments because some people chose a lower yielding investment over a higher yielding investment?

This is the reason the law and hence enforcement has to be a bit cold ...it is, in the end, about right and wrong.


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samclem 07-11-2015 08:11 AM

Quote:

Originally Posted by stephenson (Post 1612986)
This is the reason the law and hence enforcement has to be a bit cold ...it is, in the end, about right and wrong.

It's also a reason that laws (incl taxes) should be enforceable (at reasonable expense). If a law is not enforced, then the honest folks will obey it and the dishonest ones won't, thus it serves as a tax on honesty. Laws that are easily and profitably skirted diminish respect for the law and ultimately weaken the social fabric.

If a county writes a law saying the oldster has to physically live in the house 185 nights per year to get the favorable tax treatment, then they need to be prepared to have their minions doing bed checks and asking for IDs.

Another Reader 07-11-2015 08:24 AM

Quote:

Originally Posted by samclem (Post 1612996)
It's also a reason that laws (incl taxes) should be enforceable (at reasonable expense). If a law is not enforced, then the honest folks will obey it and the dishonest ones won't, thus it serves as a tax on honesty. Laws that are easily and profitably skirted diminish respect for the law and ultimately weaken the social fabric.

If a county writes a law saying the oldster has to physically live in the house 185 nights per year to get the favorable tax treatment, then they need to be prepared to have their minions doing bed checks and asking for IDs.

Sorry, I'm not willing to pay for that. It's another level of government we don't need. I don't live in a subdivision with a homeowners' association for the same reason.

samclem 07-11-2015 08:28 AM

Quote:

Originally Posted by Another Reader (Post 1612999)
Sorry, I'm not willing to pay for that. It's another level of government we don't need. I don't live in a subdivision with a homeowners' association for the same reason.

Of course. That's a good reason not to write a law that requires intrusive enforcement.

MichaelB 07-11-2015 08:45 AM

Quote:

Originally Posted by stephenson (Post 1612986)
Very interesting breakout of those of us willing to "let it slide" and those somewhat incensed by paying for someone else's infringement of the law, or even illegal activity.

Let it slide or presumed innocence? When was it determined that there indeed exists a violation of property tax law?

Sunset 07-11-2015 08:59 AM

Quote:

Originally Posted by NW-Bound (Post 1612761)
OK, thanks.

Then, I would not permanently reduce taxes for the elderly. Tax is tax, period. People have to go to a homeless shelter if they want charity. Defer it, then get it when they die. That's as nice as I want to be. No exception. No Prop 13.

Anyway, I just looked at the Texas deferral rule, and man oh man, they charge 8% interest rate on the deferred amount.

That's usury rate! Aye, aye, aye...

I'm sure there are many cases where they defer for 20 years and when the person dies, there is not enough money in the estate to pay the deferred tax bill.

So just like taxes, you charge a little extra to make up for the ones who don't/can't pay.

Bestwifeever 07-11-2015 09:03 AM

I have called our municipality many years ago on a neighbor who was renting his backyard to a lawn mowing service, pretty obvious violation with the commercial equipment and the workers showing up at 6:30 every morning and the big pile of grass clippings stored there til they were hauled away. In the OP's case though I like many here pointed out the owner could be in nursing home care as he sees an older woman at the property occasionally. if I were OP and it bothered me that much I would definitely contact the authorities and ask some questions, but there could be unintended consequences as a result that he might regret unleashing if he really turns her in.

NW-Bound 07-11-2015 09:54 AM

Quote:

Originally Posted by MichaelB (Post 1613011)
Let it slide or presumed innocence? When was it determined that there indeed exists a violation of property tax law?

+1. All the OP has is just suspicion.

See the conflicts the tax law creates when it treats some people, the elderly in this case, as being "more equal". The more I think about it, the more sense it is to let them defer it, then take it out of the estate when they pass. If there is not enough in the estate, then of course it will be forgiven, no different than other debts.

poorcarver 07-11-2015 10:20 AM

And lets be very sure about what "residence" means in your state. I am not an attorney but I am advised that in our state "residence" means what you use for an address and where your "permanent address" is. For example, my son was in the Army for four years, other than a very few visits home, he was never physically in the state. Nonetheless his "residence" was our state and this address. Likewise I understand that my home is my permanent residence regardless of the fact if I choose to travel more than half the year out of state. Further I am advised that if I have two "addresses" in separate states, I can call which ever one I like my permanent address so long as more time is spent in that one as opposed to the other especially if I register my car, get a drivers license and vote in the selected state. I understand this is a touchy issue with various states some more aggressive than others about the residency thing than others.

Texas Proud 07-11-2015 11:48 AM

OK... let's get some 'law' in the thread...

This is from a form you have to fill out....
GENERAL RESIDENCE HOMESTEAD EXEMPTION
(Tax Code Section 11.13):
You may qualify for this exemption if for the current year and, if filing a late application, for the year for which you are seeking an exemption: (1) you owned this property on January 1; (2) you occupied it as your principal residence on January 1; and (3) you and your spouse do not claim a residence homestead exemption on any other property.


AGE 65 OR OLDER EXEMPTION
(Tax Code Section 11.13(c), (d)):
You may qualify for this exemption if you are 65 years of age or
older. You may qualify for the year in which you become age 65. You cannot receive a disability exemption if you receive this exemption




No mention of how long you have to live in the property.... just one day as far as I can tell....



BTW, I claimed my house as my primary resident for 4 years and did not live in it... I worked overseas one year and in NYC for 3 in company apt.. But every year I took off Christmas and New Years and came home for the holidays.... and was living in my house on Jan 1.... so, by the law I was good to go....



Edit to add... they do say this is a brief description and you should look at the tax code to get the complete working....

soupcxan 07-11-2015 12:59 PM

Then you get into what does it mean to "occupy" a house.

definitions for terms used in Tax Code Section 11.13 are: "principal residence" is the owner's primary or chief residence that the owner actually occupies on a regular basis; "temporary" refers to a limited or short absence of the owner from the residence homestead. What constitutes a 'temporary' period of absence from the residence homestead necessarily depends on the particular circumstances: the length of the home owner's absence and whether the home owner has established another principal residence and whether the owner intends to return and occupy the residence as his or her principal residence. The length of the period probably is less important than the establishment of a different principal residence and the owner's intent to return and occupy the residence as a principal residence. Op. Tex. Att'y Gen. No. JC-415

mickeyd 07-11-2015 02:15 PM

Quote:


Is this tax fraud? What would you do?
Turn the lousy tax evader in and ask for a reward due to your astute detective work on behalf of the county tax assessor/collector.

Another Reader 07-11-2015 02:33 PM

Ah, the slippery slope of intent. The Assessor is going to say unless you can prove that she has established another primary residence and/or has no "intent" to return, please don't bother us.

Whisper66 07-11-2015 02:41 PM

Quote:

Originally Posted by Another Reader (Post 1613133)
Ah, the slippery slope of intent. The Assessor is going to say unless you can prove that she has established another primary residence and/or has no "intent" to return, please don't bother us.

That's certainly a realistic possibility. On the other hand, they might appreciate the concerned citizen's input, look into the matter, determine if there really is an intended fraud or not and act accordingly. Never know unless you take the first step.

Another Reader 07-11-2015 03:01 PM

As someone that spent some years managing a local government agency department that was a target for tattletales and self-righteous busybodies, this law was written to make sure the Assessors won't have to chase down every report of abuse. My instructions to my front line staff in this situation would be to respond as follows.


"Sir, we appreciate your concern. However, we have no proof that your neighbor has established another permanent residence and that s/he has no intent of returning. Without proof that your neighbor has established another permanent residence and proof of his/her intent not to return, there is no legal basis for further action. Thank you for your concern and have a nice day."

daylatedollarshort 07-11-2015 03:21 PM

Quote:

Originally Posted by NW-Bound (Post 1612761)
Then, I would not permanently reduce taxes for the elderly. Tax is tax, period. People have to go to a homeless shelter if they want charity. Defer it, then get it when they die. That's as nice as I want to be. No exception. No Prop 13.

There are many retirees in our neighborhood who bought houses for under $100K but if their property tax bill went to current rates the tax bill alone alone would consume close to 100% of an average retiree monthly SS benefits. We can't ship everyone over 65 here to Arkansas or some other lower cost of living place. Many have lived here their whole lives and their children and grandchildren live locally.

NW-Bound 07-11-2015 03:27 PM

Quote:

Originally Posted by daylatedollarshort (Post 1613162)
There are many retirees in our neighborhood who bought houses for under $100K but if their property tax bill went to current rates the tax bill alone alone would consume close to 100% of an average retiree monthly SS benefits. We can't ship everyone over 65 here to Arkansas or some other lower cost of living place.

For their house to have that tax rate, which their new neighbors are paying without the protection of Prop. 13, their house must have a very high market value. I bet it's several times higher than their initial $100K.

No, we do not want to send them to Arkansas against their will. So, we could let them defer, then take it from their heirs later. Sounds fair?

Or they may want to sell and move to Arkansas on their own, pocket a huge amount of money as they buy a much less expensive home, invest it for a nice income while paying a new lower tax to boot.

Another Reader 07-11-2015 03:40 PM

Quote:

Originally Posted by NW-Bound (Post 1613165)
For their house to have that tax rate, which their new neighbors are paying without the protection of Prop. 13, their house must have a very high market value. I bet it's several times higher than their initial $100K.

No, we do not want to send them to Arkansas against their will. So, we could let them defer, then take it from their heirs later. Sounds fair?

Or they may want to sell and move to Arkansas on their own, pocket a huge amount of money as they buy a much less expensive home, invest it for a nice income while paying a new lower tax to boot.

When you buy a house in California, you know going in what the basis of your taxes will be. You don't have to fear losing your house when there is a run up in prices, as so many people did in the late 1970's. None of this whatever the City, County, or school district would like to spend this year nonsense. If you don't like the system or your tax responsibility, don't buy. As to the argument that tax revenues are diminished by Prop 13? Nope. Property tax revenue increases every year, due to changes in ownership and new construction.

NW-Bound 07-11-2015 04:02 PM

Quote:

Originally Posted by Another Reader (Post 1613169)
... If you don't like the system or your tax responsibility, don't buy. As to the argument that tax revenues are diminished by Prop 13? Nope. Property tax revenue increases every year, due to changes in ownership and new construction.

If I were a long-time home owner in CA, I'd love this Prop.13 too, particularly when I see my new neighbors paying 5X what I do. The tax responsibility weighs more on their shoulders than on mine. How can that be not fair? :)

True, if newcomers do not like it, then they do not buy. I myself would never be one of the suckers. But as you noted, there are plenty of those.

PS. CA also has this Mello Roos additional tax on new subdivisions. This, I can see the basis for, as it pays for development of new facilities that the new homes require.

PPS. A while back, I read about schoolteachers in some districts lamenting about not having enough funding due to Prop. 13. Apparently, not every place has a sufficiently high influx of newcomers to bear the brunt. Proposition 13 limits the tax increase to no more than 2%, which often trails inflation rate. Over a long time, that builds up to a high deficit. People's incomes, even SS, generally track inflation rate.

soupcxan 07-11-2015 04:05 PM

Quote:

Originally Posted by Another Reader (Post 1613152)
My instructions to my front line staff in this situation would be to respond as follows.

That's certainly possible, but our tax assessor has been aggressively jacking up everyone's valuation lately, so I assume they would be interested in the extra revenue.

Shanky 07-11-2015 04:23 PM

I saw someone going 77 in a 70 speed zone. I know they were breaking the law. Should I get in front of them and go 70 in the fast lane? The highway patrol won't listen to me anymore😖


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daylatedollarshort 07-11-2015 04:48 PM

Quote:

Originally Posted by NW-Bound (Post 1613176)
PPS. A while back, I read about schoolteachers in some districts lamenting about not having enough funding due to Prop. 13. Apparently, not every place has a sufficiently high influx of newcomers to bear the brunt. Proposition 13 limits the tax increase to no more than 2%, which often trails inflation rate. Over a long time, that builds up to a high deficit. People's incomes, even SS, generally track inflation rate.

Taxes for education do not only have to come out of only property taxes. Prop 30 added funds for education through sales taxes and taxes on incomes over $250K.

NW-Bound 07-11-2015 05:08 PM

Not being a resident of CA, I did not know about Prop. 30, so just looked it up. Passed recently in 2012, it raised sales tax by 0.25%, but only for 4 years. It also raised taxes on incomes over $250K.

The schoolteachers' lament about short funding I read about was in an article in a National Geographic issue, who knows how long ago. So, it predates this Prop. 30, which tried to remedy the problem.

It is always a good idea to limit tax increases, else politicians will find all kinds of pet projects to spend money on. But it's a big problem to cap the limit to below inflation rate, something that even SS recipients get.

Warren Buffet thought that Prop. 13 should be modified. I do not know the details, but it was a no brainer that it went nowhere. Once people get this "benefit", you can only pry it out of their dead ballot clutching hands. We see that in Greece recent ballot result about the Euro bailout.

karen1972 07-11-2015 05:10 PM

Quote:

Originally Posted by Another Reader (Post 1613152)
As someone that spent some years managing a local government agency department that was a target for tattletales and self-righteous busybodies, this law was written to make sure the Assessors won't have to chase down every report of abuse. My instructions to my front line staff in this situation would be to respond as follows.


"Sir, we appreciate your concern. However, we have no proof that your neighbor has established another permanent residence and that s/he has no intent of returning. Without proof that your neighbor has established another permanent residence and proof of his/her intent not to return, there is no legal basis for further action. Thank you for your concern and have a nice day."

curious so your saying you wouldn't even do a quick look to see if this person doesnt' have a drivers license elsewhere or has another home they are also claiming on? If that were the case, then I guess the government is saying we never catch fraud so who cares everyone do it?

btw, I've often wondered this because I have suspicion friends who owns many rental properties claimed every home as a primary residence and I for some reason assumed the government would track that..but maybe not... maybe I'm the only stupid honest person in the country that paid full rate on my secondary home.

daylatedollarshort 07-11-2015 05:15 PM

Quote:

Originally Posted by NW-Bound (Post 1613200)
Not being a resident of CA, I did not know about Prop. 30, so just looked it up. Passed recently in 2012, it raised sales tax by 0.25%, but only for 4 years. It also raised taxes on incomes over $250K.

The schoolteachers' lament about short funding I read about was in an article by National Geographic issue, who knows how long ago. So, it predates this Prop. 30, which tried to remedy the problem.

It is always a good idea to limit tax increases, else politicians will find all kinds of pet projects to spend money on. But it's a big error to cap the limit to below inflation rate, something that even SS recipients get.

Warren Buffet thought that Prop. 13 should be modified. I do not know the details, but it was a no brainer that it went nowhere. Once people get this "benefit", you can only pry it out of their dead ballot clutching hands. We see that in Greece recent ballot result about the Euro bailout.

Warren Buffet is part of the .01% and not exactly a neutral third party in how to raise funding for education. I would be surprised if he suggested raising taxes on the wealthy or on corporations as a solution.

NW-Bound 07-11-2015 05:18 PM

No, I do not think so. Buffet often talked about increasing taxes on people like himself. The most famous example was when he said it was not fair for him to have a lower tax rate than his secretary.

Texas Proud 07-11-2015 05:19 PM

Quote:

Originally Posted by Another Reader (Post 1613152)
As someone that spent some years managing a local government agency department that was a target for tattletales and self-righteous busybodies, this law was written to make sure the Assessors won't have to chase down every report of abuse. My instructions to my front line staff in this situation would be to respond as follows.


"Sir, we appreciate your concern. However, we have no proof that your neighbor has established another permanent residence and that s/he has no intent of returning. Without proof that your neighbor has established another permanent residence and proof of his/her intent not to return, there is no legal basis for further action. Thank you for your concern and have a nice day."


That is kinda what I thought and posted.... they will do nothing...

Texas Proud 07-11-2015 05:22 PM

Quote:

Originally Posted by NW-Bound (Post 1613176)
If I were a long-time home owner in CA, I'd love this Prop.13 too, particularly when I see my new neighbors paying 5X what I do. The tax responsibility weighs more on their shoulders than on mine. How can that be not fair? :)

True, if newcomers do not like it, then they do not buy. I myself would never be one of the suckers. But as you noted, there are plenty of those.

PS. CA also has this Mello Roos additional tax on new subdivisions. This, I can see the basis for, as it pays for development of new facilities that the new homes require.

PPS. A while back, I read about schoolteachers in some districts lamenting about not having enough funding due to Prop. 13. Apparently, not every place has a sufficiently high influx of newcomers to bear the brunt. Proposition 13 limits the tax increase to no more than 2%, which often trails inflation rate. Over a long time, that builds up to a high deficit. People's incomes, even SS, generally track inflation rate.


Thanks for putting down the increase %.... here in Texas it is 10% increase in value.... if they raise the tax rate you can pay more than 10%... I think that is a bit too high, but 2% is way too low...

Walt34 07-11-2015 05:29 PM

Quote:

Originally Posted by NW-Bound (Post 1613200)
It is always a good idea to limit tax increases, else politicians will find all kinds of pet projects to spend money on. But it's a big error to cap the limit to below inflation rate, something that even SS recipients get.

I'm not sure you know the history of why Prop. 13 was enacted. People were being forced to sell their lifelong homes because they couldn't afford the rapid rise in property taxes in the 1970's. During that time growth of the size of the state government was also an issue, and Prop. 13 was seen as a way to slow that down. People had just "had their fill" of the perceived greedy state government. But the rapid rise in property taxes was a real problem for huge numbers of people and Prop. 13 did accomplish that goal - Grandma could afford to keep her house.

I still remember the rancor over that and I lived in MD at the time so it wasn't a pressing issue for me. But many other people in other states were having similar issues and for a while it was a popular movement in those states as well although it didn't always pass.

NW-Bound 07-11-2015 05:31 PM

Quote:

Originally Posted by Walt34 (Post 1613215)
I'm not sure you know the history of why Prop. 13 was enacted...

I do.

The problem as I said is that the annual increase is limited to 2%, which is below the usual inflation rate. Proposition 13 was passed nearly 40 years ago. Over time, the below-inflation cap causes huge shortfalls. If they were able to also cap expenses and civil servants' salaries to 2%, then there would be no problem.

Now, try to raise that cap and see if the voters will not lynch you.

Whisper66 07-11-2015 05:41 PM

Quote:

Originally Posted by Texas Proud (Post 1613209)
That is kinda what I thought and posted.... they will do nothing...

I wondered if fraud from this type of exemption was really a significant issue or not. If there's not much chance it's significant, I can understand the tax assessor office not wanting to persue, especially if it was difficult to confirm. Found this article at the link below on an investigation into an area in Austin Texas. Apparently in Austin it was not very hard to do some limited investigation and that investigation turned up some reasonable possibility of capturing uncollected tax dollars.

Homestead Exemptions Rife With Abuse

In this investigation they founnd ".....more than 200 homeowners identified in this investigation who appear to have been under-billed for their full share of property taxes because they were granted more than the single residence homestead exemption authorized by state Property Tax Code Section 11.13(h) for their primary residence...........The total estimated 2013 taxes under-billed on these homes for which exemptions are questionable is more than $125,000"

MRG 07-11-2015 06:28 PM

Quote:

Originally Posted by stephenson (Post 1612986)
Very interesting breakout of those of us willing to "let it slide" and those somewhat incensed by paying for someone else's infringement of the law, or even illegal activity.

Wonder how the two sides would feel if it was their banking or investment company explaining to them why they needed to average returns on investments because some people chose a lower yielding investment over a higher yielding investment?

This is the reason the law and hence enforcement has to be a bit cold ...it is, in the end, about right and wrong.


Sent from my iPad using Early Retirement Forum

Not that I disagree with right and wrong.

With that institution I can probably cancel my relationship with a lot easier than move. They probably won't retaliate against me by doing any of the following:
Key your car
Egg your home
Throw rate poison out for your dog
Break out your headlights and taillights

All this was in a good neighborhood, with one coke dealer. Of course you call LE. What can they do without proof of who did it? I tried, ain't worth it for me.

There are some really messed up people out there and some get away with stuff, for a very long time.

Read about Ken McElroy, he's an example of some of the nut jobs out there. Sure he's dead, still since 1981 his is an open murder case. Fourty people saw nothing, no one's come forward with a deathbed confession of who shot Ken in broad daylight.

https://en.m.wikipedia.org/wiki/Ken_McElroy


There's more Ken's out there. I don't want to meet their kind again.

Another Reader 07-11-2015 06:32 PM

I guess I was not as clear as I should have been. Changes in ownership and new construction trigger revaluations. Buy a new house? It's reassessed at market value. Build a new master suite? That gets added to your assessed value at the incremental market value. Property tax revenue goes up far more than does the revenue received from the two percent increase in those properties with an established base year value. There is also business personal property, which is taxable but not subject to Prop 13 limitations.


In addition, the voters can, with a two-thirds majority, increase property taxes if they so desire. Hasn't happened yet. What has happened, however, is a big increase in the number and amount of special assessments and parcel taxes, which only require 50 percent majorities to pass. My taxes, which should have gone down as a percentage of assessed value as bonds were paid off, have in fact, increased substantially because of the parcel taxes.


People complain all the time that PG&E has never changed ownership and therefore is not paying its fair share of taxes. Not true. Utilities are valued annually by the State and the total assessed value is allocated by county. It's called the utility (tax) roll.


Finally, the whining teachers are pointing to Prop 13 with no real understanding of how school financing works in California. The courts ruled a long time ago that handing out money based on how much property tax a district could raise is unfair to poorer districts. Think Palo Alto and East Palo Alto as an example. The school tax money now is funneled to Sacramento, which, after deducting a lot of "administrative costs," sends it back to the school districts using a formula that is judged to be "fair." A lot of money is used up in required programs or district and school administrative costs and never gets to the classroom. Eliminating Prop 13 would just mean more frictional waste of money.

NW-Bound 07-11-2015 06:58 PM

As an outsider, when I see that two adjacent homes can have a 5x discrepancy between their RE taxes, I just thought that could not be right.

Not being a CA resident, I do not know about all other nuances and special assessments as described above. What you tell me is that the local government still needs and is able to raise money one way or another. Prop. 30 described by DLDS is obviously a patch to raise additional money for schools. And we still read about civil servants getting cushy pensions, with spiking galore.

Quote:

Originally Posted by Another Reader (Post 1613227)
... Eliminating Prop 13 would just mean more frictional waste of money.

To prevent waste of money, it's better to get to the root cause of the waste: make them account for the expenses. What is the point of limiting the tax here, just to allow them to shift the burden elsewhere?

I think the gummint, both at the local and federal levels, is playing citizens against each other. We think we've got this special deduction or benefit, but hah, how do we know our neighbor doesn't get an even sweeter one?

ERD50 07-11-2015 07:07 PM

Something that some people may be missing here -

just because your home doubles in 'value', that doesn't mean your property taxes necessarily double. In our county (and many others I think), the total tax bill is divided up across the property values. What this means is, if the total tax bill goes up 5%, and everyone's home doubled, each tax bill would go up by 5% (not 2x + 5%). There's an equalization formula that covers this.

I know first hand that many people that live here do not understand this. They think their taxes are directly related to their assessed value. No, it really is your assessed value in relationship to total assessed values.

I suspect many posters here talking about how someone who experiences a real estate boom can't keep up with their taxes is thinking this way. But it may not be the case. Was it this way in CA prior to Prop 13 (or whatever #)? I don't know.

I can't say how many municipalities use the equalization formula versus an absolute % of value formula, but I will guess (based on my experience of how few people here understand it), that it is way more common than most people think. I'll also guess that most municipalities would prefer an equalization formula, or their year-to-year budgets would vary wildly with real estate markets. If the real estate market tanks, you still need to pay fire, police etc.

Quote:

Originally Posted by daylatedollarshort (Post 1613162)
There are many retirees in our neighborhood who bought houses for under $100K but if their property tax bill went to current rates the tax bill alone alone would consume close to 100% of an average retiree monthly SS benefits. We can't ship everyone over 65 here to Arkansas or some other lower cost of living place. Many have lived here their whole lives and their children and grandchildren live locally.

First, if everyone was paying the full share, the current rates for new owners would be less. So maybe less sticker shock than you think?

Second, if someone can no longer afford to live in an area, is it really the rest of the communities responsibility to chip in and help? I don't think so, I think the retiree needs to plan and adapt. That includes me. I'm not going to 'ship' anyone anywhere, but if they can't afford the area, they ought to move to a lower COL place voluntarily. Or their children can chip in if they want them near.

BTW, this conversation got me looking into the local tax exemption for seniors, since I'm getting close. It's pretty modest, a $5,000 reduction in assessed value (which is oddly ~ 1/3 of market value for tax purposes - I guess commercial is at full rate?). So a $300K home, assessed at $100K, would get a $5,000 reduction in assessed value, so a 5% discount on their tax bill, no caps otherwise. I know there is a means for seniors to defer taxes and have it charged to their equity plus interest. IIRC, not very attractive rates, but something for an elderly person who wants to live their last remaining years at home.

-ERD50

Another Reader 07-11-2015 07:11 PM

California operates on an "acquisition value" system. Everyone is treated the same - your property is valued at the time you buy or build it. It's fairness of a different kind. You know what your taxes are going in and the increases are relatively predictable.


You are playing into the hands of the people you are unhappy with by bringing up pension spiking. Schools don't need more money. They need to be given the taxes that were collected without skimming and the money needs to spend on education, not on administrators and meeting mandates from Washington and Sacramento.

Another Reader 07-11-2015 07:19 PM

California was never like states back east with assessment ratios and equalization based on what your neighbor pays. Market value was the standard. Assessed value was the market value, even if market value was estimated rather crudely before computers and CAMA modeling.


If you raise my taxes now to 1.6 percent of fair market value, I'll be in the garage shining up the pitchfork and fueling up the torch. Along with everyone else that accepted the system in place when they made the decision to buy.

NW-Bound 07-11-2015 07:24 PM

Quote:

Originally Posted by ERD50 (Post 1613232)
Something that some people may be missing here -

just because your home doubles in 'value', that doesn't mean your property taxes necessarily double. In our county (and many others I think), the total tax bill is divided up across the property values. What this means is, if the total tax bill goes up 5%, and everyone's home doubled, each tax bill would go up by 5% (not 2x + 5%). There's an equalization formula that covers this.

I know first hand that many people that live here do not understand this. They think their taxes are directly related to their assessed value. No, it really is your assessed value in relationship to total assessed values.

I suspect many posters here talking about how someone who experiences a real estate boom can't keep up with their taxes is thinking this way. But it may not be the case. Was it this way in CA prior to Prop 13 (or whatever #)? I don't know.

I can't say how many municipalities use the equalization formula versus an absolute % of value formula, but I will guess (based on my experience of how few people here understand it), that it is way more common than most people think. I'll also guess that most municipalities would prefer an equalization formula, or their year-to-year budgets would vary wildly with real estate markets. If the real estate market tanks, you still need to pay fire, police etc.

This is also how RE taxes in my state work. My home is indeed assessed at only 1/2 of its market value, and as long as equivalent homes in the neighborhood are assessed similarly, the tax burden is equitable. And in a housing bubble or bust, our tax stays steady. The county budget is controlled by other means, and the home assessed values are used as weighting factors to divide the tax burden. In other words, the assessed values are relative to one another.

Apparently, CA taxes used to be based on a straight percentage of true market values, and in a housing bubble, the local government would enjoy a "windfall profit". Of course in a housing bust, they would be hurting. This tax system "sucks".

What Prop 13 does is to start the tax at 1% of market value when the home is bought, then increases it to allow for inflation, but caps it at 2%. That 2% is the problem.


PS. My RE taxes work out to about 2/3 of 1% of current market values. My 2 homes are in different counties, one urban and the other rural, yet the taxes are about the same.

48Fire 07-11-2015 07:25 PM

I wouldn't do anything. Seems like the evidence is sketchy, and likely the tax collectors won't pursue it.

Ironically, I just received a tax assessment that looks like half of what I expected. Maybe I should turn myself in before my neighbor does :laugh:

NW-Bound 07-11-2015 08:22 PM

Talk of the bad idea of basing RE taxes on market values and having it fluctuate with housing bubbles and busts reminds me of the following story.

In 2008, during the gasoline crunch that sent the price to $5/gal in the US, the Europeans suffered much higher prices due to higher taxes. To add insult to injury, some of the taxes are based on price, not on the volume or per liter, making fuel even more expensive.

Thus, when the price went up because of a world-wide shortage, some governments enjoyed a "windfall" profit. That drove fuel consumers nuts, and I read about frequent riots by European truckers, fishermen, etc... Here in the US the gasoline excise taxes are based on volume, I believe. This is "fairer", as it does not increase the tax burden when the price goes up because of external factors which affect world-wide prices.

wolf 07-11-2015 08:31 PM

Quote:

Originally Posted by samclem (Post 1612510)
You suspect someone is evading local property taxes, but you don't really know for sure (she could be in a nursing home, she could even be in the house.)
You also don't know the whole story about what is going on with the people there. There could be a very good, decent reason why the owner of the house is inviting these members of her family to live there. She could be caring for her dying sister for a year, her mail still comes to the house, and has let these people live in her house for now--maybe that isn't allowed for in the rules, but the city would have virtually no way to enforce their rules in that case.

It doesn't sound like the family is causing any trouble for you personally. Maybe it's not as quiet as it used to be when the spinster was there alone, and maybe that's bothersome. If Mrs Smith is forced to sell the house to pay the taxes, you don't really know who will move in there. And if she wants to keep the place, she may have to rent it out to pay those taxes (rather than let her kin live there for free or reduced rent). Either way, you could end up with a worse situation next door.

Yes, it would bother me that somebody might be cheating on their property taxes, and I'd resent paying more than they do. I'd have to really examine my motives and decide if I'm upset about the property taxes or if the increased "buzz" at that house is really what's got me peeved, and reporting her for tax issues is a way to get things back the way I liked it before. Maybe you are entirely different, but I suspect that's how I'd perceive things. But given the totality of the factors, I don't think I'd feel comfortable reporting it, and wouldn't feel any obligation to do so.

+ 1. Agree. MYOB. There are bigger issues to worry about.:)

Running_Man 07-11-2015 08:43 PM

From Powell property tax specialists in Houston:
Qualifications for the Over-65 exemption and tax ceiling include:
You are age 65+
Own the home on January 1 of the tax year
Claim it as your primary residence
Claim no other property as a homestead

So as long as SHE considers it her primary residence she does not and does not have another homestead she cannot be proved to be in violation of the law, now do you have anything that shows she is claiming another property as her primary residence? Or do you expect her tax returns to be a matter of public record? This entire thread is a canard, who she lets live in her house is not a matter of discussion as it is irrelevant in determining primary residence.

Running_Man 07-11-2015 08:54 PM

And there is a paucity of legal definition of "primary residence" from one legal website:
There have been very few court cases in which principal residence has been defined, but in those cases, the courts provide the same answer: "we will investigate the facts of each case, and make our decision based on those specific facts, on a case-by-case basis." The IRS has a less complex response: it is "usually the home you live in most of the time".
however the IRS also will allow a home to be defined as a primary residence so long as you have lived in the house for 2 of the past 5 years, even if you rented it out for the other 3!!!!!
So the chance of this woman getting this exemption ruled invalid is near zero since she is over 65 and all she really needs to be doing is not claiming this on another house.

pb4uski 07-11-2015 09:25 PM

Quote:

Originally Posted by Another Reader (Post 1613152)
As someone that spent some years managing a local government agency department that was a target for tattletales and self-righteous busybodies, this law was written to make sure the Assessors won't have to chase down every report of abuse. My instructions to my front line staff in this situation would be to respond as follows.


"Sir, we appreciate your concern. However, we have no proof that your neighbor has established another permanent residence and that s/he has no intent of returning. Without proof that your neighbor has established another permanent residence and proof of his/her intent not to return, there is no legal basis for further action. Thank you for your concern and have a nice day."

Well then I'm glad you are not in municipal management here. Do you really think that the burden of proof belongs to the whistleblower? WADR, that's one of the stupidest things I've ever heard of. Like reporting a crime to the police and the police saying thanks for letting us know but unless you have proof we won't do anything. If the suspicion has merit it is your job to investigate, not the whistleblowers. If your attitude was adopted then essentially there is zero enforcement.

pb4uski 07-11-2015 09:37 PM

Quote:

Originally Posted by NW-Bound (Post 1613252)
Talk of the bad idea of basing RE taxes on market values and having it fluctuate with housing bubbles and busts ....

But you have it wrong, if the municipal budget is stable then property taxes will be stable even if market values rise (or fall) dramatically. The tax rate is the budget divided by the grand list, which is the fair value of all properties in the municipality.

So if the budget is $10 million and the grand list is $500 million then the tax rate will be $2 per hundred... if your home is valued at $250k then your property tax will be $5,000.

If the budget is $10 million and property valued increase 40% then the grand list is now $700 million and the tax rate drops to $1.4285 per hundred and the tax on your now $350k home is still $5,000.

PhrugalPhan 07-11-2015 09:47 PM

Let me come at this from a different view point. I too work for local government, in my case writing software that in one case was for the county's group that tracked cases of overpayment of benefits (i.e. usually fraud) to county residents and their negotiated repayments. The amount per year was in the 10's of millions (8 years ago - it may have hit 100 million by now). We take any type of fraud seriously and investigate it. Any manager saying don't bother us without directing them to the appropriate investigative group wouldn't be a manager here very long.

That money does of course go into the general pool of funds, but there are so many useful programs that need money, and without these funds who knows which ones would end up getting cut (or kicking the funding can down the road). Personally I would not like to have our government finances end up like Greece, but that's just my opinion.

As for the family in the OP, if they are as needy as some hypothesize, there are most likely legal benefits they can apply for that will give them just as much money as they may be saving in other ways. All they need to do is apply for it. The OP doesn't have to feel bad at all for letting the local government know about the current situation. That's exactly what should be done.

Quote:

Originally Posted by Another Reader (Post 1613152)
As someone that spent some years managing a local government agency department that was a target for tattletales and self-righteous busybodies, this law was written to make sure the Assessors won't have to chase down every report of abuse. My instructions to my front line staff in this situation would be to respond as follows.


"Sir, we appreciate your concern. However, we have no proof that your neighbor has established another permanent residence and that s/he has no intent of returning. Without proof that your neighbor has established another permanent residence and proof of his/her intent not to return, there is no legal basis for further action. Thank you for your concern and have a nice day."


Another Reader 07-11-2015 10:00 PM

It's not my job if there is no point to it. In a County agency, I would not have the staff or time to chase after someone that only has to state it is her intent to return to the property to win the argument. Intent is a VERY slippery slope.


Now if you mailed me a copy of her senior citizen exemption in another jurisdiction, that would merit a phone call to the other jurisdiction to verify the duplication and then a matter of fact letter to the individual stating she had two exemptions, and asking her to verify which property was her primary residence. I'm sure the two agencies involved would make the necessary corrections to insure only one exemption was granted.


This happens with the homeowner's exemption in California. Often someone moves to another County, rents out their house, forgets to notify the Assessor they moved, and applies for the exemption in the new County. IIRC, there is a matching state database now that turns up duplicates. A letter is sent to verify primary residence, and the other exemption is canceled.


It's not fraud, it's a lack of knowledge or inattention. Heck, half the homeowners out there don't know if they are getting an exemption for their primary residence. My guess is there is no intent to defraud in this case either.

pb4uski 07-11-2015 10:13 PM

But she has to do more than just state it is her intent to return to the property to win the argument.

You wouldn't check to see where her home address is on her driver's license, where she is registered to vote, the address shown on her latest tax return, the home address on vehicle registrations, so on and so forth? Even if she states that she intends to return to the property, that is not sufficient if the preponderance of evidence indicates otherwise.

Another Reader 07-11-2015 10:19 PM

Welfare fraud is a completely different matter. Intent is not the standard applied.


When all the person has to do is state that it is her intent to return to the property as her primary residence to meet the test, doing anything other than making sure two exemptions are not granted is a waste of the Assessor's resources.


I'll bet that the remedy where PhrugalPhan works is repayment, not prosecution, unless the fraud is egregious. You would be laughed out of the DA's office if you wanted to prosecute every welfare recipient that got an extra check by mistake and failed to report it.

Another Reader 07-11-2015 10:26 PM

If the law says statement of intent is sufficient and she has not claimed the exemption in another jurisdiction, that's the end of the discussion. I likely do not have the legal authority to ask for any of the things you suggest.

Running_Man 07-11-2015 10:32 PM

Quote:

Originally Posted by pb4uski (Post 1613278)
But she has to do more than just state it is her intent to return to the property to win the argument.

You wouldn't check to see where her home address is on her driver's license, where she is registered to vote, the address shown on her latest tax return, the home address on vehicle registrations, so on and so forth? Even if she states that she intends to return to the property, that is not sufficient if the preponderance of evidence indicates otherwise.

When Hillary Clinton ran for senator of New York and listed New York as her primary residence, where was she registered to vote and what was the home address on her vehicle registration? What address was on her last income tax return?

All she had to state was it was her INTENT to make New York her primary residence and she was eligible to run as senator, you think there is a higher standard for primary residence for property taxes than US senator of a state? She purchased a home AFTER she declared her candidacy.

Calico 07-11-2015 10:37 PM

I smell bacon.

pb4uski 07-11-2015 10:44 PM

See post 111 where the exemption requires that the home be the taxpayer's principal residence and post 112 wher principal residence is defined. Also see below.

Quote:

Treasury regulations section 1.121-1(b)(2) requires an examination of all facts and circumstances to determine a taxpayer’s principal residence. The regulation says the property a taxpayer used the majority of time during a year will ordinarily be considered his or her principal residence. In addition to usage, other factors include the (1) taxpayer’s place of employment, (2) location of family members, (3) address listed on tax returns, voter registration, driver’s license and vehicle registration, (4) taxpayer’s mailing address, (5) location of the taxpayer’s banks and (6) location of religious organizations and recreation groups.
From the IRS reg:

(2) Principal residence. In the case of a
taxpayer using more than one property
as a residence, whether property is
used by the taxpayer as the taxpayer’s
principal residence depends upon all
the facts and circumstances. If a taxpayer
alternates between 2 properties,
using each as a residence for successive
periods of time, the property that the
taxpayer uses a majority of the time
during the year ordinarily will be considered
the taxpayer’s principal residence.
In addition to the taxpayer’s use
of the property, relevant factors in determining
a taxpayer’s principal residence,
include, but are not limited to—
(i) The taxpayer’s place of employment;
(ii) The principal place of abode of
the taxpayer’s family members;
(iii) The address listed on the taxpayer’s
federal and state tax returns,
driver’s license, automobile registration,
and voter registration card;
(iv) The taxpayer’s mailing address
for bills and correspondence;
(v) The location of the taxpayer’s
banks; and
(vi) The location of religious organizations
and recreational clubs with
which the taxpayer is affiliated.

Texas Proud 07-11-2015 10:51 PM

Quote:

Originally Posted by Walt34 (Post 1613215)
I'm not sure you know the history of why Prop. 13 was enacted. People were being forced to sell their lifelong homes because they couldn't afford the rapid rise in property taxes in the 1970's. During that time growth of the size of the state government was also an issue, and Prop. 13 was seen as a way to slow that down. People had just "had their fill" of the perceived greedy state government. But the rapid rise in property taxes was a real problem for huge numbers of people and Prop. 13 did accomplish that goal - Grandma could afford to keep her house.

I still remember the rancor over that and I lived in MD at the time so it wasn't a pressing issue for me. But many other people in other states were having similar issues and for a while it was a popular movement in those states as well although it didn't always pass.


The fix for that problem is to lower the tax rate.... IOW, limit the increase in spending to some % or have the issue come to a vote....

Limiting the increase in taxes paid does mean there are people who are not paying 'their fair share'.... I am for limiting gvmt, but I do not think that how long you have owned your house should come into the calculation of how much tax you should pay....


As an example... gvmt has to come up with a budget... then at some point in time they get the value base of the real estate... divide and get the rate... it should not just be the rate from the prior year on the higher value... so if property values doubled, the rate should be cut in half as a starting point...

pb4uski 07-11-2015 10:54 PM

Exactly.

Another Reader 07-11-2015 11:19 PM

Quote:

Originally Posted by pb4uski (Post 1613288)
See posts 111 and 112. Also see below.



From the IRS reg:

(2) Principal residence. In the case of a
taxpayer using more than one property
as a residence, whether property is
used by the taxpayer as the taxpayer’s
principal residence depends upon all
the facts and circumstances. If a taxpayer
alternates between 2 properties,
using each as a residence for successive
periods of time, the property that the
taxpayer uses a majority of the time
during the year ordinarily will be considered
the taxpayer’s principal residence.
In addition to the taxpayer’s use
of the property, relevant factors in determining
a taxpayer’s principal residence,
include, but are not limited to—
(i) The taxpayer’s place of employment;
(ii) The principal place of abode of
the taxpayer’s family members;
(iii) The address listed on the taxpayer’s
federal and state tax returns,
driver’s license, automobile registration,
and voter registration card;
(iv) The taxpayer’s mailing address
for bills and correspondence;
(v) The location of the taxpayer’s
banks; and
(vi) The location of religious organizations
and recreational clubs with
which the taxpayer is affiliated.

Treasury regulations apply to the IRS, not the local tax assessor. Most states have a legislative framework, modified by case law, that the local assessors must follow.

In California, the entity that issues property tax rules, writes the manuals for the Assessors and issues interpretive letters is the State Board of Equalization. There is also an Assessors Association. Those folks and their high level managers meet regularly to discuss the changes in the laws and the rules issued by the SBE. The third parties to the discussion are the County Counsels that advise the Assessors. Not everyone does everything the same way, but the basic rules are followed by everyone.

There are rules for exemptions and the process by which eligibility is confirmed. I'm sure other states have rules and processes for their exemptions as well.

In general, the wording of the law or rule will govern the rules and processes. If the law or rule sets a standard, then you must follow that standard. You cannot require that a higher standard be met.

If the rule or law says the standard for granting an exemption is a statement of intent by the titled owner or surviving spouse to occupy the property, then that's all you can ask for. If they give you the statement, you have to accept it at face value. However, if stated or implicit in the law or rule is the uniqueness of the exemption, then you can require the owner to have only one exemption.

daylatedollarshort 07-12-2015 12:15 AM

Quote:

Originally Posted by ERD50 (Post 1613232)
First, if everyone was paying the full share, the current rates for new owners would be less. So maybe less sticker shock than you think?

Second, if someone can no longer afford to live in an area, is it really the rest of the communities responsibility to chip in and help? I don't think so, I think the retiree needs to plan and adapt. That includes me. I'm not going to 'ship' anyone anywhere, but if they can't afford the area, they ought to move to a lower COL place voluntarily. Or their children can chip in if they want them near.

BTW, this conversation got me looking into the local tax exemption for seniors, since I'm getting close. It's pretty modest, a $5,000 reduction in assessed value (which is oddly ~ 1/3 of market value for tax purposes - I guess commercial is at full rate?). So a $300K home, assessed at $100K, would get a $5,000 reduction in assessed value, so a 5% discount on their tax bill, no caps otherwise. I know there is a means for seniors to defer taxes and have it charged to their equity plus interest. IIRC, not very attractive rates, but something for an elderly person who wants to live their last remaining years at home.

-ERD50

Prop 13 passed with nearly 2/3 of the vote. Many older residents can afford the area if they have a mortgage free home. Property taxes alone were driving people out of their life long homes. From Wikipedia:

"A large contributor to Proposition 13 was the sentiment that older Californians should not be priced out of their homes through high taxes.[4] The proposition has been called the "third rail" (meaning "untouchable subject") of California politics, and it is not popular politically for lawmakers to attempt to change it."

Voters here do seem to think it is fair that a homeowner should not have to relocate to a new city without friends or family for support at age 80 solely because of high property taxes. Prop 13 certainly hasn't stopped people from moving here anyway. An influx of new residents is causing a housing shortage, and pushing up housing prices further, at least here in here in Nor Cal:

Plenty of Work but Nowhere to Live - The Atlantic.com

NW-Bound 07-12-2015 03:10 AM

Quote:

Talk of the bad idea of basing RE taxes on market values and having it fluctuate with housing bubbles and busts ....
Quote:

Originally Posted by pb4uski (Post 1613268)
But you have it wrong, if the municipal budget is stable then property taxes will be stable even if market values rise (or fall) dramatically. The tax rate is the budget divided by the grand list, which is the fair value of all properties in the municipality.

So if the budget is $10 million and the grand list is $500 million then the tax rate will be $2 per hundred... if your home is valued at $250k then your property tax will be $5,000.

If the budget is $10 million and property valued increase 40% then the grand list is now $700 million and the tax rate drops to $1.4285 per hundred and the tax on your now $350k home is still $5,000.

No, I do not have it wrong. What you just described is how the tax in your state, where ERD50 lives, and in my state works, as I described in my several posts above. The key is to control the public budget, then divide it out using the assessed home values as weighing factors. I described the same thing you just did.

What I said was wrong was the way RE tax worked in CA, prior to their Prop 13. Their old system resulted in the gummint raking in 2x the amount, if a housing bubble caused your home price to be doubly inflated. Again, this would not have happened in your state, where ERD50 lives, or in my state. Of course, CA residents were mad when their gummint got a windfall profit, and I do not blame them.

But then, CA residents tried to fix it the wrong way (as some of us think), and now with two identical tract homes, one can have 1/5 the tax levied on the other. Of course, people who are paying 1/5 the tax of new home owners are not going to have it changed. Note that the new home owners are not always from out-of-state. It could be your children.

But I guess it is the same elsewhere in our system. Young people will have to work longer and pay more SS than geezers, and get less when they retire. Tough luck!

NW-Bound 07-12-2015 03:21 AM

Quote:

Originally Posted by daylatedollarshort (Post 1613302)
Prop 13 passed with nearly 2/3 of the vote. Many older residents can afford the area if they have a mortgage free home. Property taxes alone were driving people out of their life long homes. From Wikipedia:

"A large contributor to Proposition 13 was the sentiment that older Californians should not be priced out of their homes through high taxes.[4] The proposition has been called the "third rail" (meaning "untouchable subject") of California politics, and it is not popular politically for lawmakers to attempt to change it." ...

The same Wikipedia article also has a long list of negative effects of Prop. 13. See:https://en.wikipedia.org/wiki/Califo...ition_13_(1978). Following is the index.
4.3 Negative effects
4.3.1 On the housing market
4.3.1.1 Sales disincentives, less individual mobility, higher housing costs
4.3.1.2 Effects on commercial property owners
4.3.2 On the state tax structure
4.3.2.1 Unequal assessments based on purchase date result in regressive taxation
4.3.3 On sales and other taxes
4.3.3.1 Other taxes created or increased
4.3.4 On cities and localities
4.3.4.1 Greater effect on coastal metropolitan areas than on rest of California
4.3.4.2 Loss of local government power to state government
4.3.4.3 Resultant planning changes, loss or degradation of services, new fees
4.3.5 On education and public services
4.3.5.1 Effect on public schools
4.3.5.2 Loss of funding for libraries, city services
About the 3rd rail, it is no different than trying to change SS, even when it is projected that the funding is running out. Once people get some benefits, it's impossible to take it away. We have just seen Greece's problem.

NW-Bound 07-12-2015 03:41 AM

By the way, here's another interesting thing. Prop. 13 turns out to be so lucrative for long-time home owners (new home owners pay more even if they have been life-long residents), that they want to preserve this special tax privilege when they sell and move.

There are several subsequent propositions that allow home owners to transfer this low-tax privilege if they move to another part of the state. So, what is this argument about being allowed to live in the same home as you age?

See how that works? It's all about some people being more equal than others. :)

Another Reader 07-12-2015 06:03 AM

Quote:

Originally Posted by NW-Bound (Post 1613309)
The same Wikipedia article also has a long list of negative effects of Prop. 13. See:https://en.wikipedia.org/wiki/Califo...ition_13_(1978). Following is the index.
4.3 Negative effects
4.3.1 On the housing market
4.3.1.1 Sales disincentives, less individual mobility, higher housing costs
4.3.1.2 Effects on commercial property owners
4.3.2 On the state tax structure
4.3.2.1 Unequal assessments based on purchase date result in regressive taxation
4.3.3 On sales and other taxes
4.3.3.1 Other taxes created or increased
4.3.4 On cities and localities
4.3.4.1 Greater effect on coastal metropolitan areas than on rest of California
4.3.4.2 Loss of local government power to state government
4.3.4.3 Resultant planning changes, loss or degradation of services, new fees
4.3.5 On education and public services
4.3.5.1 Effect on public schools
4.3.5.2 Loss of funding for libraries, city services
About the 3rd rail, it is no different than trying to change SS, even when it is projected that the funding is running out. Once people get some benefits, it's impossible to take it away. We have just seen Greece's problem.

Did you even read that list? Most of the supposed effects are not very significant and many of the items state there is correlation, but the cause is unsure.

Do you live in California? Were you around in the 1970's to witness what was happening? Did you read all the articles in the newspaper about local governments turning a deaf ear to all the complaints and protests of these confiscatory taxes? Were you one of the 62.9 percent of those that voted that voted in favor of the initiative?

I was here, I voted in favor of Prop 13, and I didn't even own any property at the time. The message was sent, and for awhile the tax and spend crowd sobered up.

The problems in California today have nothing to do with revenue. They have to do with where the money is going. The public drunkenness is back, and the people that wrote and campaigned for Prop 13 are long dead.

pb4uski 07-12-2015 07:22 AM

Quote:

Originally Posted by NW-Bound (Post 1613306)
No, I do not have it wrong. What you just described is how the tax in your state, where ERD50 lives, and in my state works, as I described in my several posts above. The key is to control the public budget, then divide it out using the assessed home values as weighing factors. I described the same thing you just did.

What I said was wrong was the way RE tax worked in CA, prior to their Prop 13. Their old system resulted in the gummint raking in 2x the amount, if a housing bubble caused your home price to be doubly inflated. Again, this would not have happened in your state, where ERD50 lives, or in my state. .....

My bad. I misinterpreted your post
Quote:

Talk of the bad idea of basing RE taxes on market values and having it fluctuate with housing bubbles and busts ....
as saying that one's real estate taxes would go up or down as property values go up or down. That would be crazy.

pb4uski 07-12-2015 07:36 AM

Quote:

Originally Posted by Another Reader (Post 1613296)
Treasury regulations apply to the IRS, not the local tax assessor. Most states have a legislative framework, modified by case law, that the local assessors must follow.

In California, the entity that issues property tax rules, writes the manuals for the Assessors and issues interpretive letters is the State Board of Equalization. There is also an Assessors Association. Those folks and their high level managers meet regularly to discuss the changes in the laws and the rules issued by the SBE. The third parties to the discussion are the County Counsels that advise the Assessors. Not everyone does everything the same way, but the basic rules are followed by everyone.

There are rules for exemptions and the process by which eligibility is confirmed. I'm sure other states have rules and processes for their exemptions as well.

In general, the wording of the law or rule will govern the rules and processes. If the law or rule sets a standard, then you must follow that standard. You cannot require that a higher standard be met.

If the rule or law says the standard for granting an exemption is a statement of intent by the titled owner or surviving spouse to occupy the property, then that's all you can ask for. If they give you the statement, you have to accept it at face value. However, if stated or implicit in the law or rule is the uniqueness of the exemption, then you can require the owner to have only one exemption.

I concede that if the law or regulation indicates that the a statement of intent is sufficient then that would prevail, however I find it hard to believe that a law would be written that way as it would effectively make it unenforceable so there isn't much purpose to having a principal residency requirement to begin with if you can just say that you intend to return to the property you own that has the highest property tax and all other factors are ignored. But then again, you are in California and they do do some strange things out on the left coast.

The OP is in Texas and he provided the definition in post #112, as follows:

Quote:

Originally Posted by soupcxan (Post 1613101)
Then you get into what does it mean to "occupy" a house.

definitions for terms used in Tax Code Section 11.13 are: "principal residence" is the owner's primary or chief residence that the owner actually occupies on a regular basis; "temporary" refers to a limited or short absence of the owner from the residence homestead. What constitutes a 'temporary' period of absence from the residence homestead necessarily depends on the particular circumstances: the length of the home owner's absence and whether the home owner has established another principal residence and whether the owner intends to return and occupy the residence as his or her principal residence. The length of the period probably is less important than the establishment of a different principal residence and the owner's intent to return and occupy the residence as a principal residence. Op. Tex. Att'y Gen. No. JC-415

If the owner is registered to vote at a different address, driver's license, vehicle registrations, insurance, etc are at a different address and other factors that the IRS and states use in assessing residence, that those factors would likely be used in assessing "whether the home owner has established another principal residence" as stated above.

Another Reader 07-12-2015 08:02 AM

Establishing another primary residence is often determined by whether an exemption is filed for that residence. My guess is that in the absence of another exemption, nobody will question the exemption because of the intent standard.


Lots of laws are written that have easy outs. Pressuring widows and orphans is not something most legislative bodies want to do. So they stand up for "justice," but make the law unenforceable.


If you really want to know how things are done in the appraisal districts there, why don't you call a couple and ask some questions about what they do when a neighbor complains and how and when they verify principal residence.


My guess is you have never worked for a local government agency. If you know some people that do well enough to have candid conversations, ask them about how things are really done in their agencies.

NW-Bound 07-12-2015 08:15 AM

Quote:

Originally Posted by Another Reader (Post 1613324)
Do you live in California? Were you around in the 1970's to witness what was happening? Did you read all the articles in the newspaper about local governments turning a deaf ear to all the complaints and protests of these confiscatory taxes? Were you one of the 62.9 percent of those that voted that voted in favor of the initiative?
...
The problems in California today have nothing to do with revenue. They have to do with where the money is going. The public drunkenness is back, and the people that wrote and campaigned for Prop 13 are long dead.

No, I have never lived in California, though I have friends and family in the state and visited it often.

In the 70s, I was still in college and did not have much time to follow politics. As mentioned earlier, I understood how CA residents were outraged. But, but, but now that their low taxes are locked in, they vote for it to be transferable to wherever they move.

The way to fix gummint overspending is to control the problem at the source. It should not be about protecting yourself, while allowing them to gouge the "other" people. As you said it yourself, they keep finding other ways. Vote the bums out.

ERD50 07-12-2015 10:03 AM

bold mine....
Quote:

Originally Posted by daylatedollarshort (Post 1613302)
Prop 13 passed with nearly 2/3 of the vote. Many older residents can afford the area if they have a mortgage free home. Property taxes alone were driving people out of their life long homes. From Wikipedia:

"A large contributor to Proposition 13 was the sentiment that older Californians should not be priced out of their homes through high taxes. ....

Voters here do seem to think it is fair that a homeowner should not have to relocate to a new city without friends or family for support at age 80 solely because of high property taxes. ...

I like to look at root causes, that's how you fix things. The clear issue and common element here is high taxes. As a retiree, I shouldn't have any issue with my property tax increasing at the same rate as inflation, I should be prepared for that just like my other expenses. So it shouldn't drive me out of my home.

Prop 13 sounds like it does nothing to control taxes, it just changes who pays them. Not a solid solution IMO, and it seems the chickens are coming home to roost.

It also creates a group of voters (and don't seniors vote more than most other groups?) who have little incentive to push their representatives to control spending, since they can push the expense on the proverbial 'guy behind the tree'. In fact, it motivates those protected by Prop 13 to ask for more, more, more, and more.

edit/add: I see I'm pretty much echoing NW-B's response in the post before mine

-ERD50

samclem 07-12-2015 10:27 AM

Quote:

Originally Posted by NW-Bound (Post 1613374)
The way to fix gummint overspending is to control the problem at the source. It should not be about protecting yourself, while allowing them to gouge the "other" people. As you said it yourself, they keep finding other ways. Vote the bums out.

As a practical matter, it is very hard to galvanize political support to oppose government spending. The actual spending benefits somebody (who is likely to vote for it), and doesn't directly hurt anyone (usually). It's the increased taxes needed to support the spending that can galvanize political opposition--unless the taxes are directed against a minority of the voters. At that point, things spin off into a new realm as few people oppose the actual spending and there aren't enough affected voters to vote down the taxes. A broader tax base with fewer deductions and less special treatment helps prevent this.
Yes, to the degree that special policies reduce the tax burden on the over 65 set, they'll probably not oppose government spending. Hey, who wouldn't vote for the school bond or road levy if they don't have to pay for it and it might increase their property value.

Alan 07-12-2015 05:42 PM

Thanks folks, this thread has run its course.


https://m.youtube.com/watch?v=gBzJGckMYO4


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