[genericuser9999]

>...Anyway nobody gets thrown out of their house for owing property taxes in California because the local authorities just put liens on the property.

Who are you kidding? You get a lien on the house and then that is used to force a sale to cover the amount due. Hell even home owner associations do it all the time if you don't pay your monthly dues for several months.

[dang]

> Who are you kidding?

Please don't address other users this way on Hacker News. Civility is important here.

The comment is otherwise substantive and would be a fine one if that bit were simply deleted.

[ScottBurson]

So the solution, as 'raldi insightfully suggests, is simply not to consider the lien due and payable until the house is sold.

I'm not enough of a lawyer to know exactly how that should be structured, but it's a great solution.

[smsm42]

This would make underwater mortgage holders (at least lower-income ones) to stop paying taxes completely. After all, they've already lost their money, and have no hope of getting anything out of the sale, and there's no way anybody gets anything more out of them, it's bank's loss now. Moreover, it is in their interest to postpone the sale - since until sold, bank's incentive in eviction is much lower, and incentive in just discharging the part of the mortgage is higher, due to additional buyer costs. So if you shift the tax burden essentially to the buyer of the house, the consequences may be not that good.

[ScottBurson]

The property owner would still be liable for annual tax payments on the assessed value of the property. When that is falling, the Prop. 13 limitation has no effect.

The lien we're talking about would be on the difference between the tax paid under Prop. 13 and the tax that would be due if there were no Prop. 13. If the mortgage is underwater, that difference is zero.