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Dickie B from HB · 08-22-2007, 05:59 PM

Hi Captain Zipper-

Thirty years ago California dealt with the problem that you are concerned about. During the 70's there was rapid appreciation of property values. Property taxes were going up so fast that people (especially the elderly) were forced to sell. We bought our house in 1974 for 51K. By 1979 our property taxes were scheduled to go up to $2,000 per year.

At this time, a man named Howard Jarvis got the population to rise up and vote to pass Proposition 13 that changed the State's constitution. It's effect was to reverse the property taxes to 1975 values and allow them to be raised by only 2% per year as long as you owned the property. If you sold the property, then the tax rate would be !% of the sales price for the new owner. Property owners would thus know what their taxes would be for years in advance.

The results have been dramatic. Homeowners have elected to live in their homes for decades rather than move more frequently. Rules are that you can rebuild your house without affecting the tax rate if you leave part of the original house standing. This has spawned a huge remodeling industry as homeowners elect to remodel rather than move. As a result, neighborhoods that have run down over the years have been rebuilt one house at a time. This has lifted the value of the entire area with pride of ownership on display.

Consider the alternative. If prop 13 hadn't been passed, run-a-way property taxes would have caused properties to fall into decay.

Sure California has a wide variety of other taxes (income, sales, etc), but I don't mind paying those, because if Prop13 hadn't passed I would be paying about $20,000 per year (assuming that I could still afford to own my home), whereas the property tax bill for my house this past year was $987. I can assure you that my income and sales taxes don't come anywhere near $20,000.

So this is the problem across the country with states that fund their government primarily with property tax. The choice is yours. You can leave the status quo, or you can protect your future and do something about it.

Dick B.

08-22-2007, 05:59 PM	#27
Dickie B from HB Senior Member Join Date: Apr 2005 Posts: 62 Thanks: 9 Thanked 18 Times in 11 Posts	The California solution Hi Captain Zipper- Thirty years ago California dealt with the problem that you are concerned about. During the 70's there was rapid appreciation of property values. Property taxes were going up so fast that people (especially the elderly) were forced to sell. We bought our house in 1974 for 51K. By 1979 our property taxes were scheduled to go up to $2,000 per year. At this time, a man named Howard Jarvis got the population to rise up and vote to pass Proposition 13 that changed the State's constitution. It's effect was to reverse the property taxes to 1975 values and allow them to be raised by only 2% per year as long as you owned the property. If you sold the property, then the tax rate would be !% of the sales price for the new owner. Property owners would thus know what their taxes would be for years in advance. The results have been dramatic. Homeowners have elected to live in their homes for decades rather than move more frequently. Rules are that you can rebuild your house without affecting the tax rate if you leave part of the original house standing. This has spawned a huge remodeling industry as homeowners elect to remodel rather than move. As a result, neighborhoods that have run down over the years have been rebuilt one house at a time. This has lifted the value of the entire area with pride of ownership on display. Consider the alternative. If prop 13 hadn't been passed, run-a-way property taxes would have caused properties to fall into decay. Sure California has a wide variety of other taxes (income, sales, etc), but I don't mind paying those, because if Prop13 hadn't passed I would be paying about $20,000 per year (assuming that I could still afford to own my home), whereas the property tax bill for my house this past year was $987. I can assure you that my income and sales taxes don't come anywhere near $20,000. So this is the problem across the country with states that fund their government primarily with property tax. The choice is yours. You can leave the status quo, or you can protect your future and do something about it. Dick B.