[kelnos]

The problem is that in California, the owner is still paying taxes on an assessed value only a little bit higher than what they paid for it initially.

If they sell that house, and then buy something new at a similar market rate, their property taxes will balloon overnight, because the assessments "reset" to the purchase price when the property changes hands.

The only way this works out great is if, after selling this house, they move to a new area (possibly new state) with lower cost-of-living, and possibly a more sane property tax regime.

(Not sure the person way upthread is in California, but someone lower down mentioned Prop 13, so I thought I'd bring this up.)

[Guvante]

1% property taxes are ~15% of my mortgage payment in CA.

I would pay 50% more if I upgraded with the same debt amount due to interest.