“Tactics To Persuade The County Assessor”
Readers suggested a topic about property taxes in a housing bubble. “Topic Suggestion-Tactics to ‘Persuade’ the County Assessor that your House Really isn’t worth $xxx,xxx.”
“Maricopa Co, Arizona, came out with their assessments for 2008 already! I guess they’re trying to lock in the values before they sink into the abyss.”
One said, “That’s a cottage industry in Dallas. The tax appraiser has really been socking people the last two years with absolutely no justification.”
One saw this, “Especially since if your house was ‘worth’ $100,000 ten years ago and then $250,000 five years ago and $500,000 today you in fact not gotten anything more then you had ten years ago since you still live in the same house and you are still getting the same government services yet they want to charge you more when you have not made a dime off this appreciation.”
“I can see people paying more in sales taxes when they sell at a much higher price but if you have not sold you have not made a dime in profit so why are you paying more for some possible profit later that may not even occur if house prices drop.”
One recalled, “I lived in AZ from 2001 - 2004, we purchased a house in McCormick ranch for 235k. It was first purchased for 100k 10 yrs prior. It took 10 to double in value, seems normal right? Subsequently when we sold it to move away 2 yrs later, we got 265k for it. We had an offer of 275k, but was told we could not sell it at that price as it would not appraise for that, so the buyer would have to come up with the cash difference. Now how does that same house, go to 460k 3 yrs later? How is this possible?”
A reply, “Not for nuthin’, but 135k jump in ten years isn’t particularly normal (at least IMHO). 460k? We all know that’s just obcene. Welcome to the wacky world of sub prime mortgages!”
Another added, “Doubling in 10 years is not normal — that means that the home appreciated at a rate of 7.2% every year for 10 years, which is far above the rate of inflation or increase in incomes.”
And another said. “He does raise a good point. How often over these last five years or so did a deal fall thru because the appraisel couldn’t be reconciled with the offer. Probably less that in previous decades I would imagine. A sure sign a dirty appraising and appraisal shopping by realtors.”
The Arizona Republic. “If you’ve seen homes selling for less in your neighborhood lately, you might be thinking there’s a silver lining. Your home could be worth less, so your taxes might be less, too. Right? The answer is an unqualified maybe.”
“Homeowners in Maricopa County got an envelope in the mail last week showing their homes’ new assessed value. And on average, that value is up. Not the 52 percent rise of the boom days, but still up, 13.4 percent overall.”
“Tax bills are due out in October, and those could surprise homeowners more than their recent valuation. Property tax bills lag valuations by almost 18 months because of Arizona’s complicated property-tax system. So the tax bill homeowners get in the mail this October will be based on the assessment of their home’s value a year ago, after Valley housing prices skyrocketed 52 percent.”
“‘The tax bill people get this fall could be the one with the big increase,’ County Assessor Keith Russell said.”
“The valuation most Valley homeowners got in the mail during the past few weeks will show up on property-tax bills in fall 2008. These valuations show an overall 13.4 percent increase on single-family homes. ‘We recognize the housing market slowed last year and tried to incorporate that in the most recent valuation,’ Russell said.”
“Nick Wood, who lives in Ahwatukee Foothills, said his latest valuation jumped 4 percent over last year’s valuation to hit $685,500. Like other homeowners, he has mixed feelings because while the increase could mean higher taxes, it also means his house is appreciating.”
“‘You know, part of me says it is excessive, but another part of me says obviously the value of the house has increased and there should be an increase. There is justification for an increase. So it’s kind of bittersweet,’ Wood said.”
“What could spur more appeals this year is a wave of mortgage fraud in the Valley that has inflated some home values through scams called cash-back deals. The fraud involves obtaining a mortgage for more than a home is worth and pocketing the extra money in cash. The deals are pushing up comparables beyond the true value of a home. Mortgage fraud opponents say the deals could inflate property taxes.”
“‘Mortgage fraud could create a nightmare for the county assessor trying to base fair valuations on comps,’ said County Treasurer David Schweikert.”
“Determining the comparable sales, in a neighborhood is at the crux of the housing market. Homeowners feel poorer or richer depending on what houses are selling for in their neighborhood. Buyers check out comps to see where they can afford a home, and what kind of offers they should make sellers.”
“Appraisers look at comps in neighborhoods to determine the value of a home someone is trying to buy or sell. Lenders rely on those appraisals to fund loans that won’t go south on them.”
“Unfortunately, cash-back deals are making it harder to determine the value of homes in metropolitan Phoenix now. These fraudulent transactions involve getting a mortgage for more than a home is worth and pocketing the extra cash.”
“Many people involved in the deals may think they are harmless ways to make money in the Valley’s slowing housing market.”
“But those deals can mess up the comps in an area, and that can hurt many people, including neighbors of the home sellers, people buying at the inflated comps set by cash-back deals, and lenders who fund the loans and end up losing money on them.”
“Some veteran Valley Realtors are throwing out comps on homes they think are inflated in information they give to prospective buyers and sellers.”
“More lenders are balking on Valley home loans because of unreliable comps in some areas. Some of the big mortgage companies are second-guessing recent home appraisals in metropolitan Phoenix and hiring their own appraisers.”
Here is one guy who won’t be paying taxes:
‘ A Scottsdale-based developer has postponed plans to build 155 new homes in Gilbert until the housing market recovers. Cachet Homes’ Velvendo Village project would sit on 88 acres near the southeast corner of Williams Field and Lindsay roads. But with the market in a slump, the builder decided to let escrow on the property run out.’
‘Many Valley builders have put their land acquisition prospects on hold until the housing outlook improves, said Jim Shelly, Cachet’s vice president of land development. Right now, anyone could go in and buy the property, though Cachet has already spent time and money bringing the Velvendo project through initial city approval processes.’
‘Taking that risk is part of doing business, Shelly said. ‘We typically don’t do that,’ he said. ‘We thought long and hard when we let the escrow expire.’ Builders are cutting back on production, said Tyler Wright, a land use planner. ‘It’s all a matter of absorption,’ Shelly said. ‘You just need less lots in the pipeline.’
You mean tactics to corrupt the county assessor.
Although i spend most of my time outside the US and have no intention of buying a home, have enjoyed this blog over the past few days as a pulse on public sentiment. One thought that occurs to me is that more people should take advantage of the property tax and income tax exclusions obtained by becoming a religious or spiritual entity -a “church”. Why not? It is so easy that even a moron can do it; in fact many have. Successfully and trouble-free.
Does not have to be Christian as even the Wiccans and Santerians have prevailed in court concerning their right to tax-exempt status, for their place of worship and even for the home or parsonage of their religious leader. Establish your own “church” to obtain the property tax and income tax advantages and maybe as a fringe benefit you will get more p*ssy than Prophet David Koresh or more “joystick” than Rev. Ted Haggard or just be like Rev. Jim Jones and avail yourself of plenty of both. Stay below the radar to avoid problems and you could easily save enough on taxes to bail yourself out of any housing bubble difficulties, all while having fun and bucking the system.
I don’t think property taxes on a home could be eliminated this way. Actually, having done a lot of book work for small businesses, I can tell you that the majority are also ‘non-profit,’ even if that isn’t what they intended.
This is frequently tried. When I was a kid my parents and their friends got caught up in a scheme that was dubbed The New Life Church, a name which is now claimed by at least one entirely different organization now. Members became Pastors and signed over their belongings to the church. My family got off really easy with around half of the family income garnished directly for quite a few years. Some of the rest who were involved ended up in what amounts to permanent indentured service to the IRS because the sums involved were so much larger than their potential incomes over time. The agents who showed up and did the investigations and in some cases confiscations kept wondering aloud how people could have been so stupid as to think they would be allowed to get away with this.
My kind of church
http://buckandmabelsbigadventure.blogspot.com/2006/12/first-church-of-john-deere-650.html
L. Ron Hubbard got away with it. Of course, he had the sense to retain some nasty lawyers.
This reminds me of what happened to a buddy of mine who in the 1980s built a house on a lake in Windermere, west of Orlando and “out in the country” at the time. It was before Save Our Homes, the now hotly-contested method of restricting tax increases on homesteaded property.
His property tax started out at less than $2,000 per year and within ten years was over $13,000. His remarks were exactly like the post above — “I come home every day to the same house, walk in the same door and have the same quality of life, but my taxes are up more than tenfold.”
While the flip side is that the increase resulted from the boom in the area at the time, and the resulting increase in value of his house, that was small consolation to the folks who just wanted to be left alone in their castles. Because this situation will result in endless battles over SOH, which could have been a good program without a housing bubble, I think that property tax increases will become, if not the bitterest memory of this bubble, at least one of the most bitter.
After the Texas bust, a homeowner had to appeal to the tax board every year as prices fell. Also, if you read the AR articles, they mention that how the numbers are arrived at is a ‘formula’ having to do with growth and government costs.
TX homeowners pay on average 3% in total property taxes. I think this used to keep a lid on soaring prices. The rampant mortgage fraud and idiot flippers “boosting” values have removed the lid.
Does any one know what the average or median rise in mortgage payments for all those toxic mortgages that reset/recast this year. I think 1.5T are due to reset, but I haven’t seen what that will mean to the average family in actual $ per month extra!!
The real bad loans P&I more than double at the reset. These are the loans where the borrower prepaid interest with a higher initial loan ammount along with interest only or teaser initial rate.
Most borrowers on the IO (select a payment) loans will see their loan payments go up by 50%. The regular adjustables without the initial teaser rates don’t move very much, the most on a 300k loan would be around 3k/yr. That still works out to hundreds/month more, which a lot of borrowers would consider a BIG MOVE. Couple these increases with the fact that most of these folks stated their incomes much higher than reality and were over their heads at the start of the loans.
I have seen really bad loans that start at about $900/mo (for a 300k loan) and when the teaser period ends (2yrs) the payments rise by about $1,750/mo!
These dumbshits agreed to a loan (almost triples) that goes from $900 to $2,650/mo!!!!
And they lied about their incomes and couldn’t really afford the $900/mo plus insurance and taxes!!!
These are the exteme, but I would say the norm would be for these IO teaser period loans to have the payment (P&I) go up by more than 50% at reset.
None of these increases take interest rates into account. It the gov ever gets serious about saving the dollar by pushing rates these increases could double these increases over a few years. It wouldn’t be unprecedented for the gov to raise rates by 8% over several years. This would double the above increases depending on where the interest caps on the loans are set.
It’s been taking about 1 1/2 yrs. here in Riverside Coutny, CA for a new home to get assessed for tax purposes because of the volume. I wonder if all those homeowners who bought near the peak will have to wait as long for reassessment on the way down? We all know how responsive government can be…
prop 13? If someone paid $500k for stucco then receiving a $5k annual tax bill on that property should not be surprising.
Tax reassessments for San Diego County… Nope. No screams or yelling will do any good as S.D. is “near” bankrupt as the only choice left after years of corrupt Enron accounting tricks that will soon have to be revealed for eyes to see. Deceitful, unscrupulous , city council members now have their backs to the wall after promises of open books and a “change” from the past. After years of living in San Diego nothing change and moving away in 2005 am now out of shouting distance from the soon to be “high pitch” voices of home owners when they receive their new property tax bills.
In my humble opinion the underlying causes for the bubble are:
1) Human Greed
2) The FED…bubble architects extraordinaire
3) Explosion of subprime loans that increase volume/commissions
4) Infestor Trainers and Froth Beaters (Trump, Kyosoki, TV shows, etc.)
5) Corrupt appraisers/RE agents etc. (let’s keep it going)
6) Lemming/herd psychology (you may be priced out forever if…)
7) A population that appears so dumbed down they do not understand when they are over their heads financially (or they do….but think they can “time it”)
Given the above one can easily see the impetus for infestors, equity locusts, etc.
Neil…please pass the popcorn.
Many of these factors were in place historically. What is different this time are the radical low rates, the banking rules that allow cash printing, the bad loans, and the way they are traded around. Everything else including the appraiser fraud is old school bubble material.
How often over these last five years or so did a deal fall thru because the appraisel couldn’t be reconciled with the offer. Probably less that in previous decades I would imagine. A sure sign a dirty appraising and appraisal shopping by realtors.”
The corruption in the appraisal industry was aided and abetted by state licensing board requirements which allowed any dickhead with a high school degree and a couple of two-bit appraisal courses to qualify for a license.
And the states licensed hordes, being only too happen to grab big $$$ in fees.
I remember a bud of mine in a continuing ed course listening to the commentary of a couple guys sitting behind him, who were having great difficulty absorbing the subject data.
So he turns to them and asks WTF are you doing here?
One of the dudes replies-”Oh, we’re a couple of dump truck drivers previously working for the state DOT. We got hurt lifting a snowplow, and the disability counselor said we should go get an appraisal license to supplement our disability checks because, these guys are makin’ a killing…”
Your fodder for realtor rubber stamp value shopping.
Well, here’s one way to get your mortgage paid. LOL. Have a good one, ya’ll
Salon Owner: Pay Up Foxy
A Florida beauty shop owner, who was allegedly attacked by Foxy Brown, is already expecting big bucks from a lawsuit he plans to file against the rapper. “I hired a lawyer. I hope to pay off my mortgage with whatever I get,” Hayssam Ghoneim tells the New York Post. “She definitely has to pay for what she did — one way or another.” Brown was arrested after allegedly attacking him with hair glue and dropping F-bombs left and right after he told her the store was closing.
why should property taxes go up more than general inflation rates + a formula for population growth- the rest is pork and socialism creeping into our lives
Why should taxes go up with population growth? Tax revenue would go up as a result of increased volume collected, no?
How about property taxes capped at the general rate of inflation tied to colas for social security, so blind widows don’t get taxed out of homes they’ve lived in for twenty years?
Acually, one of the reasons for property tax going up faster than inflation is that what property taxes pay for can’t be outsourced. This has been different in the past few years, as salaries have gone up slower than inflation. In the past, however, things like teacher salaries, construction, etc that your property tax pays for, have gone up faster than inflation.
If you’re someone who thinks that property shouldn’t be taxed, then there’s nothing I can add.
But if you accept property taxes as a fact of like, I personally like the idea of having the tax proportional to the value of the property. That seems the most fair way to do it. I understand that people are shocked to see their assessed value doubling over the last three years when it comes time to paying property taxes, but these same people are delighted when they look at their market value and think about their massive increase in wealth.
Look, if your wealth goes up tremendously, shouldn’t your taxes go up? (we’re obviously NOT talking about CA here, with all the troubles associated with Prop 13).
It’s the _least_ fair way to do it. It’s an arbitrary “value” that it not connected to your ability to pay. As we’ve seen over the last 5 years, that “value” can be jacked up to ridiculous levels through the nonsensical actions of the buying herd. Why should I be subjected to a huge tax increase because banks started giving 100% financing to financial idiots? There is no reason that local governments should get a windfall because some area was invaded by flippers. Someone who owns a house as a place to live, long term, should not have to start forking over huge yearly tax increases that are way above the inflation rate. It is really the _most_ unfair kind of tax.
If you’re willing to donate the capital gains that the flippers bestowed upon you, then sure, keep property taxes low.
But if you’re willing to accept the rise in the value of your asset, then you should be willing to accept the taxes on them.
Americans and Europeans are in love with the welfare state; which is why the rest of this century belongs to Asia, where they are smart and moral enough not to want a welfare state and the taxes that go along with it.
Gov’t employees are now grossly overpaid; years ago they weren’t, but got job security. Now they get high pay AND security.
“Gov’t employees are grossly overpaid”
ha, ha, ha, ha….Maybe state and local, but definitely not federal. I got a 25% pay increase for leaving the gov’t. Paid 95% of median (read: below median wage). Health insurance sucks. High premiums, low coverage. No dental, no vision. TSP (read: 401K) matching is good (5%), but is vested only after 3 years…..if you think 401K is better than the old Pension plans…..
Job security is there, but then I know a ton of engineers who have left it.
Land Value Tax uses rent value of land without improvements as a basis for setting rates. This theoretically dampens down booms. In practice LVT taxation raises so many issues at once that it becomes difficult to demonstrate specific changes. The Wikipedia pages on Land Value Tax and the landvaluetax.org site have more on both the theory and practice of Land Value Taxation.
I agree. I own property in northern Arizona and want to build my retirement home this year. I’ve worked hard and paid off the property and want to build but I feel I will get TAXED to death because property values have risen far faster than I could save for a beautiful home at lower costs than Calif.
Which is why Proposition 13 in California is rational.
It’s odd to see somebody on this blog suggest that the inflated real estate values of the past few years represent real wealth. For most people, the theoretical value of their home is no more “wealth” than the “stock options” of the dot-com boom were. Until a house is sold, the appraisal value is a theoretical number that is worthless to the owner. I suppose that a case could be made that the tax base should be ajdusted upward if the house is refinanced, but, imo, the only appropriate way to tax accrued but unrealized wealth is inheritance taxes.
if your wealth goes up tremendously, shouldn’t your taxes go up?
Having your house’s value go up does not equate to your wealth going up. This should really go without saying around here, but your house can appreciate eleventy billion percent and it’s all just funny money until you sell.
Same home, same govt services, same taxes. It’s only fair.
Same home, same govt services, same taxes. It’s only fair.
I couldn’t agree more. If you and your neighbor both own identical houses, get the same government services, then you should both pay the same property taxes. Timing your birth should have nothing to do with it. Prop. 13 and SOH have created huge new inequities in tax burden (despite being sold to the public as “tax fairness”) and completely suck.
Owners should have a put to the County at the assessed value, which would keep appraisals honest and at around auction value.
There’s your tipping point. Imagine an ARM reset and tax bill within 6 months of eachother.
By the way, did anybody see the Capital One ad with the medieval mortgage analogy? The peasants were standing in front of an old sign that said “30 Years”. Those with a fixed mortgage were shackled and suffering. The guy with an adjustable was on the rack being stretched by what appeared to be a neanderthalian mortgage broker. Perfect analogy.
Yeah, I’m thinking they didn’t mean that to be funny in the way I found it…
Nick Wood, who lives in Ahwatukee Foothills, said his latest valuation jumped 4 percent over last year’s valuation to hit $685,500. Like other homeowners, he has mixed feelings because while the increase could mean higher taxes, it also means his house is appreciating.
Er, no, it does not mean that his house is appreciating. It means the county wants more taxes from him.
Has this reporter not read the news lately about how houses are selling for below assessed value?
Many homes in northern Arizona have the ‘under appraisal’ line in the ad, especially in Flagstaff. Here is the latest from greater Sedona:
SFH sold by mid-Feb 2006, median $636,950.
SFH sold by mid-Feb 2007, median $575,000
The price per square foot went from $290 to $267 for the same period.
Conspiracy Theory - The government didn’t crack down on appraisal fraud because they are profiting from it too.
Bingo.
Paladin already disproved this, remember? Unless they had someone reporting a specific amount stolen from them they were too confounded to even properly take a report, let alone investigate. Perhaps if the appraisal fraud were being committed in Iraq it might have been worth taking a look at.
Especially since if your house was ‘worth’ $100,000 ten years ago and then $250,000 five years ago and $500,000 today you in fact not gotten anything more then you had ten years ago since you still live in the same house and you are still getting the same government services yet they want to charge you more when you have not made a dime off this appreciation.”
Um, except that those “same government services” have increased in cost for the government to provide. The costs for maintaining roads, sewer systems, electric grids, schools, etc. have all increased. Thus the need for higher taxes. Your house isn’t some little island that’s isolated from all of these things.
tying services to land valuations is bogus though. Break ‘em out and bill them as utility costs.
It doesn’t matter how you bill them. The fact is that they go up. If you break them out as bill as utilities, people will just bitch about utility prices going up.
Ah, the schools. Have you seen the Taj Mahal schools they are building? These get the first pick of the finest granite.
“Um, except that those “same government services” have increased in cost for the government to provide.”
Are you telling me that those “same government services” have gone up five times in ten years? Has crime increased five times, has there been five times more fires, have they repaved the roads that much?
As a matter of fact, no, I’m telling you nothing of the sort. My only point was that they go up, and complaining that they shouldn’t just because you’ve lived in your house for ten years and don’t perceive any increased service is missing the point.
Do governments hike taxes more than they should? Of course.
But in any case, your comment is simplistic. There may not be 10 times more fires or ten times more crime and they may not pave the roads every week, but police and fire salaries and health insurance has increased dramatically, gasoline for those trucks and police cars and road crews has more than doubled, the cost of materials and environmental mitigation for sewer projects has skyrocketed, etc.
It’s more than just what you can see on the surface.
No, YOUR comment is simplistic. You basically claim that taxes should be tied to valuation, yet your only argument is that “costs go up”. Yes, they go up, but you fail to prove any reason for the two to be linked.
Excuse me, READ MY COMMENT.
I only said that the argument that taxes should not change simply because you’re “living in the same house and nothing has changed” is misguided.
NOWHERE DID I SAY THAT TAXES SHOULD BE TIED TO VALUATION. LEARN TO READ.
“Mortgage fraud opponents say…”
Wait, to be fair, I want to hear what the mortgage fraud supporters have to say.
“I want to hear what the mortgage fraud supporters have to say.”
ROFLMAO! Love it!
LOL.
In Washington state a change in assessed value doesn’t change the amount of tax paid, but rather reapportions the rate among the tax payers. The total amount of tax collected is set by tax levies in the cities, counties, and state. For example, an increase in assessment of 25% does not mean an increase in taxes of 25%; if another property is valued at only 10% higher, the tax burden shifts more to the greater valued property. At least this is the theory. The tax assessment system is supposed to be value neutral, with assessments changing the proportion of taxes paid by each property owner. This is not to say that taxes don’t increase, they certainly do, with the passage of tax levies. But al least the levies get voted on, and sometimes actually rejected.
The property tax system in Illinois also works in this manner. Your assessed valuation determines your share of the county budget, not the tax you owe. I had assumed that this was the way it worked everywhere, but it looks like it is not.
Then again, it might be the case everywhere, or at least in more places than people realize. You see, here in Illinois most people seem to think that if their assessed valuation increases, their tax increases. The county is more than happy to let people make this mistake - it has lots of exemptions that lower you assessed valuations and even a nice streamlined process for challenging your assessed valuation (with well over 50% of challenges being successful - why do they care if you win or lose!?!). All this distracts the citizens from noticing the real reason the property taxes are going up - the county set a larger budget for the next year. And if the majority of citizens think the larger budget is simply a result of higher property taxes, nobody is going to contest the amount of the budget. It’s brilliant misdirection by government (yes I know that as a renter I am indirectly being screwed).
So anyway, does anyone know for sure how the actual amount owed in Arizona is calculated? Is it a set percentage of assessed valuation, or the Washington state and Illinois, et al method? Or perhaps something entirely different?
Property taxes in Maricopa County (Arizona) work this way too. In fact, for the past 2 years, all property owners in Maricopa County received a full-color insert with their assessments explaining this fact. It basically states: if your assessed value goes up 50%, it doesn’t mean your taxes go up 50%. It just means that if your neighbor’s assessed value only went up 40% that you have a higher share of the tax burden. If your neighbor’s went up 60%, you have a lower share. Changes in assessed values do not drive the tax burden itself. Politicians do that. (BTW, If you want less taxes, vote Libertarian.)
–Chet
Isn’t the real question how municipalities collect taxes? If based on valuation we do have anomalies regardless of appreciation or deprecation of property values. Likewise the desire to lower appraised values for taxation isn’t particularly relevant … the municipality still has a ‘base’ of funding they need. Lowering the values overall will necessitate an increase of mil rates… a wash for the community though some will gain and the rest lose. Municipalities HAVE been very loose in budgeting expecting a continuing cornucopia of money…. that isn’t germane to what is a ‘fair’ system — shouldn’t there be a better way to calculate taxes than ‘value’? Arguments for only increasing taxes by population growth and inflation doesn’t cover all costs — there are increased exponential infrastructural costs directly due to the growth — community sewage system rather than septic tanks is one trite example; public transportation and more roads is another.
one way to fix property tax issue is floating rate…halve the rates for buyers who bought after say after 2004…post bubble bursts, set the rates uniformly across.
Some of the big mortgage companies are second-guessing recent home appraisals in metropolitan Phoenix and hiring their own appraisers.
Cue the fat lady. The Titanic’s about to go vertical.
See? This is why a recurring tax on real property is akin to confiscation. You never, ever really own your property while there is a recurring tax on it. Bonus: the government can tax you at whatever rate it wants and can assess whatever value it wants. If you wish to oppose that, you can spend a small fortune on legal costs and fees and maybe you might get a reduction. Maybe.
Our founders are thrashing furiously in their graves, appalled at the current state of affairs.
Our founders would be leading an army to overthrow the crooks in D.C.
This crash is going to hit californias counties really hardthey are already strapped for cash,and the gerrymandering of the state government has essentially stymied any possiblity of change.Marin is famously snotty and overpriced,but the county has a total of two deputies who cover ALL of western marin county.taxes right now usually run about 1.25% of assessed value,and properties are reassessed upon sale.prop 13 covers ALL real estate,even though it was sold to the populace as a way to keep older people from being taxed out of their homes.it has been a really sweet deal for the wealthy corporations and individuals who own the majority of property in california.It will be real interesting to see what happens if (unlikey) some politician tries to amend it to cover the primary residence only,not biz property or second homes…i don’t think california’s bonds are much better than subprime RMBS…well maybe Alt-A.
Are builders committing fraud by artificially keeping prices high, with their generous incentives? The same model house next door, without the incentives, should be reappraised, minus the incentive value of the recent sale. Will the taxing authority appraise like this? It seems only fair.