California Prop 13 on the table...what dose that mean for CA housing??

I have already heard major concerns from investors I work with about this. The risk of change could be priced in very quickly. Any predictions?
  • January 05 2011 - Bakersfield
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Answers (3)

I depends on what they do to change it.

Something very beneficial would be "Portability".  This is where you can take your tax base with you, even if you are not over 55.

Yes, it would cause a temporary reduction in the amount the government gets but it would intice more people to move.  The more turnover in the  market, the more spending there is for fixing the homes and furnishing them.  In the end, reducing taxes gets the government more money.

Dennis Smith, ABR, SRES, e-PRO, CDPE, Realtor® Lic #00476662
Certified Distressed Property Agent
RE/MAX By-the-Sea,  Carlsbad CA
  • January 05 2011
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Profile picture for the_country_hick
All I know is if I have $1,000 a month to spend on housing and taxes take $200 of it from me I run out of money a lot quicker than if taxes cost me $50.

Plus, many people if taxes were evened out would have to sell their house being unable to pay the tax bill. These "tax forced sales" could drop prices quickly. On the other hand if prop 13 was repealed it could drop tax bills for the majority of home owners. Maybe that could increase prices IF taxes were lower. (nah, bad budget = higher taxes no matter what happens)

I am not sure legally if a citizens proposition can be overturned by the legislature there. I am sure that your state is stupid and in extremely deep debt. If they would cut spending it would make sense. But instead your state tends to tax more, spend lots more. Saying that, I expect the state to do anything, and everything they can to tax, fine, and otherwise find ways to separate people and their money. Many rich people have already left the state as higher taxes arrived. With higher taxes imposed the state gets less cash, It was obvious it would happen.
  • January 05 2011
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Profile picture for Blue Nile
The only change that has been discussed so far for proposition 13 is a change to commercial properties.

The voters will not accept a change to proposition 13 for ownership residential properties.

It is not clear which way rental housing would go.  My "guess is it will still benefit from proposition-13 protections since any tax increases the owner would try to pass on to the tenants.

Commercial properties that have kept an artificially low property tax rate have been a drain on the state and county budgets.  The original "competition" to proposition 13 did not provide the same protections for commercial nor rental residential properties.  But Howard Jarvis owned substantial rental residential properties, so you can be sure that he made it clear if his measure didn't pass, it would be a big burden on the retired home owner.  Really, few even knew what was in the alternative measure.


  • January 05 2011
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