[ryandrake]

> What's fair about making people pay more tax just because the market value of their house has increased?

If you believe that, then why ratchet them up just because the property is sold? If you're going to detach property taxes from the value of the property, then do it for new homeowners too.

If we are scaling property taxes with the property's value, we might as well do it for everyone and not treat people special just because they were living there longer. Other costs people deal with scale at least by local cost of living. Groceries, electricity, water service, etc. all increase year after year. Do we let people pay 1960s costs for everything else just because they happened to move to the area in 1960?

Prop 13 as it currently stands, is a wealth transfer from young, new homeowners to elderly, established homeowners.

[jjav]

> If you believe that, then why ratchet them up just because the property is sold?

An argument here is that it's about budgeting and predictability.

If I choose to buy a $1M property today, I need to consider and budget for the $10K+/yr in taxes on it because I know full well that's what I'll have to pay. If that doesn't work for me, I don't have to buy it.

But someone who bought a $50K property and responsibly budgeted for the $500 in taxes on it will be severely punished through no fault of their own if that $500 becomes $10K.

[rcpt]

People who made a $50k leveraged bet which is now worth $1M are who we're supposed to ruin our schools, parks, infrastructure and housing market for?

[jjav]

> People who made a $50k leveraged bet

They did not "make a leveraged bet". They bought a home to live in and watch their child grow in it.

Not everyone looks at real estate as a investment vehicle to maximize profits. It's just a home. It's not healthy for society to view homes merely as if they were shares of stock to be traded for maximum value. If you want to make leveraged bets, better to play the options market.

[rcpt]

Oh ok great. So how do I buy one of these "just a homes"?

[jjav]

Find a city and neighborhood you like and are interested in setting roots there for the long haul. Find a house that you love that can be a forever home for your preferences.

Don't think of it as an investment to flip. Think of it as home. After the purchase, no need to ever look at the property value estimates again. Just live it.

[rcpt]

Somehow you left out the whole part about actually buying the house.

Maybe your feel good spiel would make sense if price-to-rent ratios weren't the highest but that's not the case. Most of what you pay for here is a bet that values will go up. If it weren't for stupid laws like Prop 13 that only help land speculation this wouldn't be the case.

[wooger]

It doesn't even need to be someone who moved to the area who's grandfathered in to the cheap taxes: Families can share ownership of a property and retain it forever.

It's an insanely unfair system.

[eweise]

Property values go up over time. I initially paid $8k a year and now its $14K, which is actually about right for the market. I am protected from wild increases so that I don't have to move my kids out of a neighborhood and school they've grown up in.

I agree that scaling property taxes with their values is bad. Not sure why government expenses magically double when housing value do.

[gkop]

Look into land value tax. The goal of property tax is not just to fund collective expenses, but also to encourage the most valuable use of the land for the collective benefit (eg. let's not waste valuable inner Bay Area land on single family homes, but instead with more dense uses like four plexes).

https://en.wikipedia.org/wiki/Land_value_tax

[eweise]

I guess that makes sense if your goal is to use land most efficiently. Not sure that what is most important though.

[gkop]

Agreed, it's a balance. I think replacing prop 13 with taxes deferable until sale would be a good step in the right direction.

[rcpt]

The existing lock in effect of 13 would be orders of magnitude stronger. Nobody would ever sell and prices would skyrocket.

[gkop]

Huh? Eventually the current owners will die