Your property tax goes up by 2% of your , guessing (relatively recent?) purchase price, and theirs goes up 2% of a much smaller base due to prop 13.
They have no incentive to move, downgrade. And they often use trusts to pass this tax base down to their kids. It’s feels like icky European feudalism.
Again i’m emphasizing that this goes for both residential and commercial buildings.
Pairs nicely with the permitting processes that basically boil down to "thou shalt pay the guild"
Yes and yes.
And I pay 10K less a year than my neighbor for the same value house. And I pay 10K more a year than my other neighbor.
I get a huge advantage from Prop 13, but I still think it needs to get replaced with a much fairer system.
You can argue against property taxes entirely, but Prop 13 definitely means that families, businesses, and all property owners work very hard to never sell, never reassess, and never change their tax rate.
This would eliminate the tax break for commercial property, prevent it from being abused for second homes, and avoid the property trust shenanigans that have allowed some properties to change hands without a reset in the taxes paid.
The main selling point of prop13 was a real problem: rapidly increasing values were driving up taxes so fast that long time residents (of modest means) were being forced out.
I don’t think it’s entirely unreasonable to have some policy that attempts to protect people living in their primary residence from rapid tax increases they can’t afford.
The point of Prop 13 is to let people have their cake and eat it too: you get to keep the equity you gain from increased housing prices, but not pay the property tax that comes with them.
The approach in Washington works well. There is a senior property tax exemption based on age and disposable income. To qualify in King County (where Seattle is) in 2027 you need to be 61+ and have a household disposable income under $101k.
That gets you (1) a freeze on the assessed value for taxes equal to the current assessed value, and (2) an exemption from the statewide school tax and from "excess levies" (basically city and county levies that are voted on).
If income is under between $76k and $89k they also exclude from tax 45% of your assessed value or $70k, whichever is larger, but not more than $200k.
If income is below $76k they exclude 80% of your assessed value or $80k, which is larger.
The income levels are based on median county household income so vary from county to county.
Disposable income is basically everything that goes into AGI plus a list of other things (like any Social Security that is not already in AGI). There are also a bunch of deductions, mostly medical including Medicare premiums, with a $7500 deduction you can elect to take instead of taking any of those specific deduction. Income includes all adults living in the house.
In my county the levies that are not "excess levies" are county roads, sheriff, conservation, mental health, veterans relief, fire district stuff, public utility district stuff, and regional library. The "excess levies" are a couple of school district levies. Overall the excess levies are about 28% of the property taxes in my county. The statewide school levy that is exempt is another 10%, so the bottom line is that the property tax rate for seniors under the income limit is about 60% of the non-senior rate.
And the state did slash spending in the years following. In particular funding for the university system was hit very hard.
Let people defer increases until their house is sold. This what many states do.
It’s seems insane that we “protect” people whose property taxes are going up because their home is getting so valuable