How do they calculate it? I heard it was very fair and logical unlike
where i live(Texas). Anyone care to explain? Thank you.

wrote in message
...
How do they calculate it? I heard it was very fair and logical unlike
where i live(Texas). Anyone care to explain? Thank you.

The California property tax is unfair and illogical. It only takes a 38 page
document to start to explain it.
http://www.boe.ca.gov/proptaxes/pdf/pub29.pdf

wrote:

How do they calculate it? I heard it was very fair and logical unlike
where i live(Texas). Anyone care to explain? Thank you.

Horrors! What could they possibly be like in Texas, if they're worse
than here?

On Feb 27, 10:40 pm, Jack Hamilton wrote:
wrote:
How do they calculate it? I heard it was very fair and logical unlike
where i live(Texas). Anyone care to explain? Thank you.

Horrors! What could they possibly be like in Texas, if they're worse
than here?

In Texas it is apparently almost completely dependent on the locale
you live with some exceptions for seniors. In CA it looks like is
limited to 1% of full value statewide with all kinds of exceptions
including seniors. Of course the same house in different locations
can have huge differences in value (sometimes by many multiples) so
comparisons of property taxes are difficult, even within the same
state.

wrote:
How do they calculate it? I heard it was very fair and logical unlike
where i live(Texas). Anyone care to explain? Thank you.

I lived in California both pre- and post-Proposition 13, and have lived
and owned property in Texas for 18 years now, so perhaps I could give
you a bit of an overview of the differences.

- In California, property values began to rapidly increase in some
places. Property taxes were figured as a percentage of the home's
appraised value. When homes in a particular neighborhood sold at
the new market value, all homes in that neighborhood/area got an
increased value in the next year's appraisal, because even though
home B wasn't sold, since home A was sold for $100/sq foot, there
was an implication that home B could also have been sold for $100/
sq foot, and therefore, $100/sq foot was its fair appraised value
(no matter that the homeowner might have paid $50/sq foot five
years ago). So your appraised value could double in a few years in
desirable areas, and your tax bill would tend to at least double
as well (my recollection is that taxing authorities seldom reduced
the tax rate, even though the rate could have been significantly
dropped and still bring in the same revenue)

In some areas, people who'd owned their homes for many years
now had a property tax bill larger than their mortgage. This gave
rise to a number of horror stories about people having to sell
their homes because they couldn't afford to pay the new, higher
taxes on the home.

So a couple of gents got together a campaign to put a state
proposition on the ballot (which can be done in California
by the initiative process, bypassing the legislature). That
became Proposition 13, and it passed by a significant margin.
It specified that a) homes would be appraised at market value
when ownership changed, b) that except after change of ownership,
the appraised value of a home could increase no more than 2% a
year, and c) the ad valorum (property) taxes would be no more
than 1% of a home's appraised value. (Significant remodeling
or additions could also cause a reassessment.)

The year after Proposition 13 passed, property tax collection
$$ fell by 57% -- an indication that average tax rates had
been at least 2% before its passage.

The funny thing that happens under this system is that when
you own a house for ten years, you might pay a quarter the
property taxes that your neighbors, who just bought their
house do. Same house, same value, but yours is appraised
for tax purposes at $250,000, theirs is appraised at its
sales value of $500,000 or $1,000,000.

There was some concern that commercial properties tended
to be held for longer than residential properties, thus
skewing those appraisal differences even more, but I don't
know if that has played out or not.

- In Texas, they can appraise your home at full value and
increase that value by a maximum of 10% per annum, so that
your property tax bill could double in about seven years,
even if the tax rate remained the same.

However, with some restrictions, taxing authorities are
also able to increase the tax rate each year. Your
school district can sell more bonds and add to the tax
rate to pay for those; your MUD can charge more, your
county (and possibly city) can also increase their tax
rate... so in the real world, many folks have seen their
tax bills more than double in less than seven years as
values have increased.

- Property taxes in this part of Texas at least (Houston
area) tend to be in aggregate somewhere between 2% and
3%. The difference between here and there is that you
can still get a wonderful home in Texas close to where
you work for $80 a square foot. Homes in California
are... well, a bit more than that. So your property tax
bill in Texas will still be less than what it would have
been for the equivalent home in California, but if
values keep going up, that will change.

There's a great deal of unhappiness in California among
many of those who have bought homes recently, as they
see that Proposition 13 means that they are paying
twice the taxes their neighbors (who have lived there
longer) have. What few of the complainers I've heard
seem to realize is that they (the newer residents),
too, are paying significantly less in taxes than they
would have had Proposition 13 never passed, due to
the 1% rate cap.

----

Back to your original question -- I can't say that
it's exactly fair that two neighbors will pay
significantly different taxes on what is, in effect,
the same home. But I know that I like the current
system in California much better than what went
before.

I am seeing resistance to rapidly increasing
property taxes in Texas that reminds me of what I
saw in California before Proposition 13 passed.
One big difference is that we don't have I&R
(initiative and referendum) here in Texas, so we
as chattel taxpayers can't directly sponsor an
equivalent proposition; there have to be enough
of us acting in concert to get our legislators
to propose, and then enact, a bill limiting either
assessment increases, or tax rates, or both.

If you've followed Texas state politics at all over
the last few years, you know that there have been
attempts to enact 3% or 5% appraisal increase caps
recently, but they've had about no chance of
actually passing, and in fact they did not pass.


Hope this helps. I've done a quick review of
"proposition 13" in wikipedia to check some of
my numbers... more info available there.

On Feb 28, 10:55 am, AT " wrote:
wrote:

How do they calculate it? I heard it was very fair and logical unlike
where i live(Texas). Anyone care to explain? Thank you.

I lived in California both pre- and post-Proposition 13, and have lived
and owned property in Texas for 18 years now, so perhaps I could give
you a bit of an overview of the differences.

- In California, property values began to rapidly increase in some
places. Property taxes were figured as a percentage of the home's
appraised value. When homes in a particular neighborhood sold at
the new market value, all homes in that neighborhood/area got an
increased value in the next year's appraisal, because even though
home B wasn't sold, since home A was sold for $100/sq foot, there
was an implication that home B could also have been sold for $100/
sq foot, and therefore, $100/sq foot was its fair appraised value
(no matter that the homeowner might have paid $50/sq foot five
years ago). So your appraised value could double in a few years in
desirable areas, and your tax bill would tend to at least double
as well (my recollection is that taxing authorities seldom reduced
the tax rate, even though the rate could have been significantly
dropped and still bring in the same revenue)

In some areas, people who'd owned their homes for many years
now had a property tax bill larger than their mortgage. This gave
rise to a number of horror stories about people having to sell
their homes because they couldn't afford to pay the new, higher
taxes on the home.

So a couple of gents got together a campaign to put a state
proposition on the ballot (which can be done in California
by the initiative process, bypassing the legislature). That
became Proposition 13, and it passed by a significant margin.
It specified that a) homes would be appraised at market value
when ownership changed, b) that except after change of ownership,
the appraised value of a home could increase no more than 2% a
year, and c) the ad valorum (property) taxes would be no more
than 1% of a home's appraised value. (Significant remodeling
or additions could also cause a reassessment.)

The year after Proposition 13 passed, property tax collection
$$ fell by 57% -- an indication that average tax rates had
been at least 2% before its passage.

The funny thing that happens under this system is that when
you own a house for ten years, you might pay a quarter the
property taxes that your neighbors, who just bought their
house do. Same house, same value, but yours is appraised
for tax purposes at $250,000, theirs is appraised at its
sales value of $500,000 or $1,000,000.

There was some concern that commercial properties tended
to be held for longer than residential properties, thus
skewing those appraisal differences even more, but I don't
know if that has played out or not.

- In Texas, they can appraise your home at full value and
increase that value by a maximum of 10% per annum, so that
your property tax bill could double in about seven years,
even if the tax rate remained the same.

However, with some restrictions, taxing authorities are
also able to increase the tax rate each year. Your
school district can sell more bonds and add to the tax
rate to pay for those; your MUD can charge more, your
county (and possibly city) can also increase their tax
rate... so in the real world, many folks have seen their
tax bills more than double in less than seven years as
values have increased.

- Property taxes in this part of Texas at least (Houston
area) tend to be in aggregate somewhere between 2% and
3%. The difference between here and there is that you
can still get a wonderful home in Texas close to where
you work for $80 a square foot. Homes in California
are... well, a bit more than that. So your property tax
bill in Texas will still be less than what it would have
been for the equivalent home in California, but if
values keep going up, that will change.

There's a great deal of unhappiness in California among
many of those who have bought homes recently, as they
see that Proposition 13 means that they are paying
twice the taxes their neighbors (who have lived there
longer) have. What few of the complainers I've heard
seem to realize is that they (the newer residents),
too, are paying significantly less in taxes than they
would have had Proposition 13 never passed, due to
the 1% rate cap.

----

Back to your original question -- I can't say that
it's exactly fair that two neighbors will pay
significantly different taxes on what is, in effect,
the same home. But I know that I like the current
system in California much better than what went
before.

I am seeing resistance to rapidly increasing
property taxes in Texas that reminds me of what I
saw in California before Proposition 13 passed.
One big difference is that we don't have I&R
(initiative and referendum) here in Texas, so we
as chattel taxpayers can't directly sponsor an
equivalent proposition; there have to be enough
of us acting in concert to get our legislators
to propose, and then enact, a bill limiting either
assessment increases, or tax rates, or both.

If you've followed Texas state politics at all over
the last few years, you know that there have been
attempts to enact 3% or 5% appraisal increase caps
recently, but they've had about no chance of
actually passing, and in fact they did not pass.

Hope this helps. I've done a quick review of
"proposition 13" in wikipedia to check some of
my numbers... more info available there.

Thanks for the info. Yes,in Texas they are trying to cap appraisals,
but that might lead to prop tax rate increases. Seems like Harris
county really wants more money each year, at least in the past 4-5
yrs. I am paying 3.2% after homestead Anyway, thanks for the
California explanation. I recently visited a friend of mine in San
Diego and only told me that his neighbor is paying much more tax than
he was, but couldn't explain the details.

On Feb 28, 9:55 am, AT " wrote:

There's a great deal of unhappiness in California among
many of those who have bought homes recently, as they
see that Proposition 13 means that they are paying
twice the taxes their neighbors (who have lived there
longer) have. What few of the complainers I've heard
seem to realize is that they (the newer residents),
too, are paying significantly less in taxes than they
would have had Proposition 13 never passed, due to
the 1% rate cap.

Whether things are high or low, most people put fairness pretty high
up the list.
And having two identical homes, even next door to each other, get a
different tax bill is inherently unfair.

Since older folks tend to move less frequently, and are in their homes
longer, this tends to present them with a tax benefit which would be
in addition to any expressly stated old-folks tax break. Furthermore,
the situation can become a major factor in household mobility, because
if you move and buy the same value house (assuming you are still in
CA) your taxes could go up significantly.

While I am mindful of the pitfalls of retiring, and then having
troubles because your tax payments went way up, I am also aware that
these retired people are also voters, and they can continue to vote
for added government programs and payments, including those that
benefit themselves. If they are isolated from the tax increases,
there is a reduced incentive to hold the line on benefits and
government costs.

All in all, I believe Prop 13 was a good idea done incorrectly.

On Thu, 28 Feb 2008 09:46:06 -0800, LDC
wrote:

On Thu, 28 Feb 2008 07:56:50 -0800 (PST), WDS
wrote:

On Feb 27, 10:40 pm, Jack Hamilton wrote:
wrote:
How do they calculate it? I heard it was very fair and logical unlike
where i live(Texas). Anyone care to explain? Thank you.

Horrors! What could they possibly be like in Texas, if they're worse
than here?

In Texas it is apparently almost completely dependent on the locale
you live with some exceptions for seniors. In CA it looks like is
limited to 1% of full value statewide with all kinds of exceptions
including seniors. Of course the same house in different locations
can have huge differences in value (sometimes by many multiples) so
comparisons of property taxes are difficult, even within the same
state.

You sorta left out an important detail. Property tax in CA is 1% of
the SELLING PRICE of the house, with an annual inflation adjustment,
limited to 2% of the tax. Taxation based on selling price is vastly
different than one based on "value." Selling pricing is typically
easy to identify whereas value is a purely subjective determination.

There are some exemptions, but they do not apply to the vast
majority of home owners. There are also some local add-ons to the
1% that have been approved by local elections, but usually they have
a minimal impact of the overall tax bill.

I don't know what part of CA you live in but around these here parts
of Southern California those little "add-ons" increase my property tax
bill almost fifty per cent and cities and "improvement zones" are
adding them on as fast as they can sneak them by voters.