If it's not, then I would also like to live in a nice neighborhood for $100k and zero property tax, please.
On the other hand, if it is, then this person has a substantial economic asset that she could reverse mortgage, rent out, or sell.
Especially not when you're getting older, have limited ability to manage a move for yourself, built a life and raised your kids in the building, and would have to consider unloading a lifetime's worth of objects and/or moving infeasibly far away from your friends and community to get into a living situation that's more financially tenable.
> Especially not when you're getting older
Houses are wealth. And the wealth in them can be accessed while retaining use of the house. Especially when you are getting older.
Why are we replaying the dishonest “think of the retirees” now? It was bullshit in California in 1978 to sell Prop 13, and its even bigger (and more transparent) bullshit now when, especially when it is used to sell the same basic idea.
And where would she move to? All decent areas probably also increased in price, her property went up 10x in value but so did all other properties she would contemplate to buy. That’s the fallacy of thinking property is wealth when talking about your only residence.
What a morally bankrupt viewpoint.
Claiming that the retiree has a right to both the home value and the ability to live there is the friction point. It reads as hollow in the face of rising homelessness and the inability for young people and families to access housing.
I think if we had a totally different culture, with multigenerational families living in the same house, then this might work better. But this model where we build new family friendly neighborhoods with parks and schools, and then nearly everyone ages in place and all the family amenities become empty over time, and the families all end up in the next new neighborhood and then it repeats, this doesn't seem ideal to me.
It's OK that they don't last forever; they're schools, not irreplaceable shrines.
And speaking of things that also don't last forever: Homeowners. Grandma Sally isn't going to live forever. The house winds up on the open market in order to seek satisfaction of Grandma's debts, and then some new family buys it at market price and is free to breed a whole new fleet of kids to raise there.
There's still eventually churn in the marketplace, and in the neighborhood. The churn didn't disappear just because Grandma Sally was able to choose to keep living in the same place until she died quietly of an agonizingly painful heart attack as she stood in the kitchen making tomato sauce after church on a Sunday morning before the family dinner that afternoon.
People die all the time. It's often tragic, but it's natural and ultimately unavoidable.
People also get forced out their forever-homes all the time, too. That's also often tragic, but it happens for artificial reasons that could be avoided if we bothered with trying to do so.
That seems a bit ironic?
> Grandma Sally isn't going to live forever. The house winds up on the open market in order to seek satisfaction of Grandma's debts
Not always, grandma can pass the home down to whoever. IIRC there are ways to do it without triggering a reevaluation on the original purchase price.
Anyway, Grandma is as dead as that Sunday dinner. She won't care that the new occupants are being complete heathens about smoking dope and makin' babies on the sofa.
> Houses are wealth. And the wealth in them can be accessed while retaining use of the house. Especially when you are getting older.
Simple example. I bought the house at $100k. It's now worth $500k. That means I owe $20k/yr in taxes, but it also means I have $400k of additional wealth. A bank will lend me money with that wealth as collateral. If you imagine that the interest on the loan is roughly equivalent to the rate of appreciation of the property going forward, that's 20 years of taxes paid for by the increase in home value. Seems like a pretty good deal for everyone!
"And where would she move to?" -- Either the graveyard or the incinerator? She's dead... the bill doesn't come due until after her death and is settled from the value of the house.
I don’t want my country to force old people to either move from their home, or take out risky debt.
There are absolutely problems and prop 13 has been awful for California but it’s a red herring to worry about the primary residence exceptions.
Perhaps the retired person is living on a fixed income of $40k/year. Over time their proterty taxes on the home that they have lived in for decades can now be more than half of their total income? How is this fair at any level?
> How is this fair at any level?
How is it fair that working people have to pay 10x for housing than she did when she was young? How is it fair that the money goes to her inheritance while she made her working neighbors pay her share of taxes?
Where I live, we are looking at locking property taxes once you hit a specified age (65) and have under a specified income ($40k+/-). The current debates revolve around exactly what those numbers are and at what level the taxes get locked. The goal is to protect the elderly who have already contributed to the economy and society for 40+ years and not force them into a financial situation forcing them to sell their home just to pay even more property taxes that they have paid for the entire ownership.
Oregon has a deferral where the delayed property tax comes from the value of the house when it is sold or I guess when you die. https://grantsforseniors.org/property-tax-relief-for-seniors....
Washington has a similar thing.
"All Washington counties offer senior citizens and disabled households property tax exemptions. Eligibility is based on your age or disability status, home ownership, residency in Washington, and income level. Seniors who are at least age 61, or retired from regular gainful employment by reason of a disability, with an income of $64,000 or less are eligible."
The idea is to help people stay in their houses. This is really really important. And if you can afford it, you should be paying property taxes. I'm lucky I can afford mine, but I highly support this strategy.
In my state I occasionally see people in online discussions saying they can't afford their property taxes - I think a lot of people aren't aware of these programs, people are amazed when I post a few pointers and tell them about it.
Quite the opposite.
Telling people that the solution is to sell their home to an insurance company as a solution is most certainly a corporate land grab.
You seem to be arguing about people/corporations that own multiple homes or even entire portfolios of property. These are not the same argument.
If their asset is gaining in price so much that the tax burden is getting high, then tax deferement until a liquidity event both keeps them in their home, but also keeps them honest about how much they are taking away from the rest of society by taking that piece of land.
The premise does not warrant this conclusion.
People’s primary residences are more than just an economic asset. If you don’t understand that, it’s difficult to have a conversation as we have very different starting points about morality.