Prop 13 Change?
Hat tip to W.C.Varones for sending in this article. I read it, and all of the supporting documentation, but didn’t find any surveys or data to back up the president’s claim below that well over 1 million additional properties will change hands – he just made that up.
If you can afford the cost and hassle of moving up, the increase in property taxes isn’t going to be what stops you. If we’re going to change Prop 13, let’s do it based on surveys and valid research, not some cheerleader popping off:
Local Realtors President Bob Kevane, who unveiled the Proposition 13 change, said he has been touting the idea for a decade and believes it is needed more than ever because of low inventories.
“I think the majority of California property owners who have owned their homes for five or six years are not moving because of Proposition 13,” he said. “It’s basically locking them into their current residence and not providing the normal move-up markets we’ve had in the past.”
In the first two or three years after changing Proposition 13, he said, “You would see well over 1 million additional properties change hands.”
Under Kevane’s proposal, buyers would carry over their own tax basis plus what’s owed on the difference between the sales prices on the old and new properties. (If the new value is less than the old value, the old tax bill would apply.)
Kevane offered this example for a move-up buyer:
Home 1: Purchased for $300,000 in 2000. The original tax bill of $3,000 has now risen to $4,000 because of the annual assessment adjustments plus any permanent improvements. It sells for $500,000.
Home 2: Purchased for $600,000. Current law would set the tax price at $6,000. But Kevane’s proposal would reduce it to $5,000 — $4,000 carried over from the Home 1 bill plus $1,000 covering the tax difference between the two home prices.
The break is similar to a senior discount enacted in two Proposition 13 amendments. But under those provisions, owners aged 55 or older can keep their old tax base only if their replacement home price is no more than their sold property’s price. That senior discount can be invoked only once for a couple or individual.
In effect, Kevane’s proposal would make the senior discount available to all sellers every two years without age, income or price restriction. Older owners would also benefit because they no longer would be limited to invoking the tax discount once and children who inherit their parents’ homes could continue enjoying the lower tax base if they choose to move.
“How it’s going to benefit lower-income people is it’s going to free up all the houses that have not been on the market for years,” Kevane said.
Kevane said the state association is expected to announce the ballot campaign by Aug. 22, the deadline set to launch statewide citizen initiatives. But he also said he will speak with state Sen. Toni Atkins, D-San Diego, and other legislative leaders to see if they will put on the measure on the ballot directly.