[refurb]

Right. Seems reasonable no?

Not sure where this bizarre idea came about that people whose houses dramatically increase in value should:1) be able to avoid paying taxes on that value and 2) pass the house down, in whole, to their heirs without paying increased taxes.

[0xFACEFEED]

The idea doesn't sound that bizarre to me. I'm not an expert or anything but as people grow older their earning potential slows down too. What if the neighborhood grows in value even though the retired homeowner hasn't made any changes to their home?

It sounds reasonable to me that a retiree with a conservative investment portfolio that is barely over/under inflation should be able to live out their remaining life in that home.

[librish]

Yes that's the idea? They get to live out the rest of their years, and then their heirs pay the deferred taxes, selling the house if needed.

[eropple]

This is a bad situation if you want long-term neighborhood and cultural cohesion, though, because it encourages turnover (particularly among less affluent groups).

[refurb]

I mean if people can defer taxes until they die you’re not increasing turnover at all.

[eropple]

There's value to generational continuity, though--again, particularly for marginalized communities. One of the ways gentrification makes its way in is during these kinds of estate liquidations. I think it's reasonable to assert that there's value in not fracturing those communities any more than is necessary.

[refurb]

Marginalized communities that have seen home values skyrocket?

Honestly I have trouble summoning up much pity for people whose face a property tax burden because their homes have doubled or tripled in value.

[jonas21]

Yes, that's the point of postponing the taxes. The retiree can live out their remaining life in the home, and the taxes are due when their heirs inherit it.

[0xFACEFEED]

Yea I guess that makes sense. Although inheritance is a change of ownership and the new owner would see the home re-assessed, no?

The other issue I see is that the deferment program is limited to very low income seniors (< $35k year or something like that). That's pretty low for a lot of places in the Bay Area which means not being able to go on road trips and do whatever it is seniors do in their twilight years.

[jdeibele]

https://en.wikipedia.org/wiki/1978_California_Proposition_13

"1986 Proposition 58

Proposition 58 allowed homeowners to transfer their principal residence to children without a property tax re-assessment, as well as the first $1 million (not indexed to inflation) in assessed value of other real property."

Of course if the homeowner has more than one child it could get messy

[foogazi]

If someone buys my neighbor’s house for 2X what I paid for mine, why should I pay more in taxes ?

[leetcrew]

because property tax is based on the value of the property, and your property is worth more too?

a different way of phrasing the question: is it fair that your new neighbor pays twice as much as you to support city services, just because they bought their place more recently?

[foogazi]

> is it fair that your new neighbor pays twice as much as you to support city services, just because they bought their place more recently?

My neighbor paying 2x what I paid has no effect on the cost of city services

[refurb]

Because your house is now more valuable and as a general rule progressive taxes are best where those with more money pay more tax.

[foogazi]

My house going up or down in value doesn’t make me richer or poorer

I could see the point of your argument if I sell and make a profit - but before I do that my QOL within my house is not affected

[refurb]

Of course it means you’re richer.

Wealth = assets minus liabilities

[tzs]

Your house becoming more valuable doesn’t mean you have more money.

[epistasis]

That's like saying "just because people buying TSLA shares at 2x what I paid for them doesn't mean I have more money."

Of course not, stock shares or real estate are not money. But they are wealth.

[tzs]

But note that when your wealth goes up because others have driven up the price of TSLA shares you are not taxed on that wealth gain. You are only taxed on the money you get when you sell the shares. If the price of TSLA shares goes to 2x and then later back to 1x before you sell the shares, and then you sell them, you have no gain and no tax.

It is generally considered to not be a good idea in tax theory to tax things that don't involve either money or things that are very easily converted to money, unless perhaps the tax is relatively small. For purposes of this discussion "money" means whatever the government will accept as a tax payment.

That's partly because you ideally want taxes that are meant just to raise revenue (as opposed to for example so-called "sin" taxes) to not cause much change in the activity or thing being taxed.

[rcpt]

Unlike land within our borders, TSLA isn't finite in supply and something we need to directly compete with each other for.