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State ruling to cut most property taxes
December 1st, 2009, 12:01 am · 52 Comments · posted by Jeff Collins
State officials say that property taxes will probably fall for most California property owners next year due to deflation, the first such property tax cut since Prop. 13 took effect three decades ago.
While the average tax cuts would be small – just $7 for a home assessed at $250,000 – the reductions likely will cut revenue for cities, counties and schools by hundreds of millions of dollars. The cuts would affect tax payments due in December 2010 and April 2011.
“There will be a slight decrease,” said Anita Gore, spokeswoman for the state Bureau of Equalization. “But it’s not an increase, and it’s the first time that’s happened.”
Under Prop. 13, property tax hikes for existing owners are based on the overall inflation rate, but capped at 2% a year. It’s been a rarity when the tax rise isn’t at 2%. State officials set that inflation rate at less than 2% just five times in the past 31 years.
“But it’s never been negative,” Gore said. Highlights of the state announcement include:
- State Bureau of Equalization officials issued preliminary estimates Monday that California will have a negative inflation factor, or deflation, of 0.237%.
- Bureau staff determined that tax assessments must be lowered in deflationary times – even for longtime owners with tax assessments well below their property’s market value.
- With deflation at roughly a quarter of a percent, the cuts amount to around $2.60 per $100,000 of assessed valuation.
- State officials calculated that a home assessed at $250,000 would see only about $7 shaved off next year’s tax bill. Under a 2% inflation rate, however, that tax bill likely would go up $55.
- The tax savings is a reversal of inflationary times, when property taxes for longtime owners can rise even as property values fall. That’s because the 2% cap keeps their “assessed value” well below actual values.
- However, taxes still can rise for property owners who recently purchased homes or buildings, then got their taxes reduced due to falling values, officials said.
- If, for example, property values for recent buyers increased from January 2009 to January 2010, their property tax assessment will go up if the value is still below their purchase prices.
The state ruling is preliminary since it was derived from the federal government’s Consumer Price Index. The state will calculate its own inflation rate, called the California Consumer Price Index, then notify county assessors later this month.
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“property taxes will probably fall for most California property owners next year due to . . . DEFLATION”
Trillions of dollars pumped into the US macro econ landscape and 1.2 trillion worth of govt subsidies (distortion) pumped into housing = DEFLATION, Lol
Oil is the main factor. A drop from $4 gas last year to $3 this year is the main culprit. Keep dreaming Bogey.
I purchased in 89, and i’m paying an increase of 2% this year. my question is Why??
And those whom purchased at the high peak had been reduced.
The county is cruxifying the decents one just to save the delinquents.
Jc,
Com’on now. Sacrificing the “decents” to save the delinquent?
Since you bought in 89 your property taxes have changed at the minimum, just like everyone else who owns a home, based on value initially determined by the sale price.
Well I bought in 2000 and again in 2008. My taxes soared in comparison to you because you are still building equity compared to the more recent buyers who have lost a lot of value and some lost equity as well.
I have appealed my taxed value on the new home and that reduced the value by $140K and I still am paying more than my last house, by far. I am not a delinquent and no one is who still pays taxes. Perhaps you should appeal your 2% tax increase. But the hassle may now be worth the time and effort. In my case it will be a decade before I get the value back up to where I started, perhaps much longer.
If your home was taxed on $500K at 1% tax = $500 X 2% increase = $100.
If the comperable value of your homeis still above the initial sale price, you are winning.
really? lets see how you feel in another 2 years when more people walk away from their homes not because they can’t afford it, but because it will take years to be worth what they paid. Then you’ll really feel crucified.
Hey guys
Most of you purchased high to speculate thinking it will go higher, or got A-Loans attach it. (that were your take, NOT my)
As I type today many are still “Living in their houses” not paying Mortgages, and of coarse neither property taxes.
Mid-while i’m up date with all of the above. and suffering an increase Because the County want to Balance the revenues.
If that is not wrong…
Shut up and pay your taxes.
Maybe I missed some sarcasm, or maybe the comment is excusable because it was made to Jc, but that was uncharacteristically pigman-esque of you.
I guess it depends on how you read it. California has some of the most favorable property tax laws anywhere. He’s owned since 1989 (bought during the previous bubble I might add) so he’s paying far less than if he were to purchase the same house today. I’m fine with that, but he shouldn’t whine about his favorable tax situation.
Also, he’s an avowed socialist, so he should be more than happy to pay much higher taxes. It’s typical of what’s wrong with California voters. They want as many “freebies” as possible, but don’t want to pony up when it comes time to pay the bills.
Well I responded but my comment is stuck in purgatory. They must have tightened things up around here. Lets see if it ever gets posted.
liar are you again having a diarrehea from the hole in your face?
besides…who give you candles in this funeral??
brain
liar is a child left behind, who is trying hard…with empty-shallow arguments.
Here’s some education for you — The property taxes will get paid either by the bank or the investors that buy the properties. The state gets theirs no matter what.
I purchased because I speculated that it will go higher? I WISH! In 1989, when you purchased your home, I was in elementary school so that wasn’t an option. In 2005, when I was finally in a position to purchase (degree, job, 20% down) I did. Now my 20% down has disappeared & if I want to “walk away” I can’t do so without forking over even more money. It will take years to be worth what I paid unfortunately - but what other choice do I have?
Don’t assume everyone who purchased recently was trying to make a buck. Many of us are young families just starting out.
Mr. HB,
Sorry things didn’t work out. I am in the same boat, 20% down and bought a couple years ago. I am losing out big time. GUESS WHAT, I am sucking it up. I had a choice, I bought when I thought it was going to turn around. I was wrong! But that is my mistake, not anyone elses. Therefore, I pay my taxes and work my tail off to make ends meet. MY PROBLEM, NOT ANYONE ELSES! Poeple in this country need to quit balming others and take RESPONSIBILITY FOR THEIR OWN ACTIONS!
Jc,
You need a lesson on how Prop 13 works. You bought in 89…so your property is currently worth many times more than what you bought it for. Howerver, due to Prop 13…your property taxes can only increase a maximum of 2% per year.
Now follow closely here. Even when real estate prices go down like the last few years, your property taxes can still increase if your property tax basis (what you bought it for + yearly prop 13 increases) is below current market value (what the house is valued at today). Don’t complain, you are still getting a great deal due to Prop 13. Like was said, pony up the money and pay your taxes.
It’s funny how many people don’t understand how good they have it. His taxes are probably 1/2 of what they would be if he purchased now. Diarrhea indeed.
yeah as you already know many here are constant complainers. They have something negative to say about everything.
Well ,well it looks like all delinquents are here. whats the matter guys did I put my finger in your Protates??
You “delinquents” destroyed the system And now. Here you are giving “Lectures”
You created this Artificial prices by acting like rapacious vendors.
(Lier) do something for your self, non of you 30’sh can handle the truth.
good night insignificants. you need to learn the lessons, and soon you all will.
May the fleas of a thousand camels infest your armpits.
Now that was funny.
There’s extra credit if you can name who I lifted it from.
So because of the mechanism of Prop 13 and the fact of the state’s economy deflating, we can expect the Democrats to somehow, someway take credit for reducing the tax load on the public. Afterall they already practically take credit for the state’s good weather.
The Republicans are as corrupt as the Democrats and continue to increase taxes.
That means that they will cut taxes all together? Nah!
Arnold will be sure to make up for those losses with more taxes elsewhere.
You clearly know little about the way CA government works.
clearly CA government doesn’t work very well at all.
You sure got that right. I just read on Fox news that they have just released a report about the cut to green house gases that is required by the bill they passed back in 2006.
They are talking cap and trade and not just to the big emitters.
Who cares if that worsens the economy or if some of the recent revelations from the hacked data and related info indicate that the “science” on this is rather biased.
The one good thing might be that they have messed things up badly enough that people will wake up and vote them out of office before they make things even worse. That is checking voting records and voting out those who voted for things that got us into the current mess.
OC4truth, I’m afraid you are wrong. There are way to many stupid people in Cali to vote any other way than in the past. They don’t vote for a better state or put any thought into it. They vote for the immediate satisfaction of what can I get now.
Honestly, with the state we’re in right now we should be increasing property taxes and not lowering them.
I think they should stay the same…..$7 is nothing for anyone,but millions to the state…they will take it from somewhere else now.
I would hope property taxes would go down!! My property dropped by 60 % over the last year and a half.
JC - you obviously have no idea what you are talking about. In the future, please take the time to undertsand what you are reading before you post.
The fact is, many people who are delinquent overpaid for their homes also have bloated tax bills and unnecessarily pumped hundreds of millions of dollars into our local government that they would have otherwise never received.
Blame our local government for collecting this windfall, squandering the cash and showing no improvements in our infrastructure whatsoever.
I’m starting a pool on how soon the California Teachers Union chimes in with there Whine. Who wants in?
Mr. No Spin,
Maybe we shouldn’t give teachers their bonuses this year? Oh yeah, thats right, they don’t get one. They chose a job where they stay in school longer and pay more money to universities and teach our children (the future). Yes the government was not wise on spending tax dollars and people got loans for houses they could not afford, but teachers aren’t making the money that they would be in a private sector job. You must be in the private sector and sorry if you took the risk because your greedy and wanted more money! You probably dont have kids in public school with 30 kids in a class. DONE
Repeal Prop 13,
This is a good thing. It will really put the gobblement between a rock and a hard place. Now they might have to consider cutting all social service aid to illegal foreigners and reduce those obese gobblement salaries and pensions. How special would that be??? Maybe some gobblement workers will finally lose their jobs and start to understand how the other half lives, eh???
CUT CUT CUT. STARVE THE BEAST!
“Maybe some gobblement workers will finally lose their jobs and start to understand how the other half lives, eh???”
That’s the way to a stronger community, more unemployed workers, more strain on society.
Yay, ocobserver’s America! We’re #1! We’re #1!
ocobserver,
‘
I work for a high school and have watched the budget closely. I have been personally affected by the cuts as I was reduced by a month. That cut has hurt my family.
‘
I took the “gobblement” job because it was normally safer than the private sector. I wasn’t like some of my friends and family who made big dollars working in real estate and car sales during the boom. Some of them made 2 3 times my salary during the peak times.
‘
I make a good salary for what I do but it was far less then some of the plum jobs out there specially during the boom. I took the less money for the more stable road and I still got a cut in pay.
‘
Please think twice before you harp so badly on people who earn there lively hoods from the “gobblement”
The questions that should be asked about funding (particularly school funding that is based on property tax) is this: “A few years ago more homes than ever before were being sold for more money than ever before causing more than ever to be collected in property tax. Where did that windfall go? Was is wasted? Invested? Saved for a rainy day? Used on one time improvements?”
So, lets rephrase this whole thing. You took a cake job in the Gov because you have no ambition and wanted to hide out and collect a check. I know plenty of people sitting in those government jobs that don’t do jack all day and collect a decent check. Now your world is turned upside down because that illusion of sitting in a chair not doing anything all day for 30 yrs is disappearing. Welcome to the world! Now you know what its like in the private sector sucker.
Planet Reality,
I’m not a government worker, but I doubt that you could handle working at a high school just based on your attitude. It is a job that adds value to society and many times involves dealing with ungrateful students. Maybe you should focus on somebody who’s actually leeching off the system.
I wouldn’t want to handle it, so I picked a profession so I wouldn’t have to deal with children all day (well sort of). I’ve always scratched my head at all the collective whining coming from teachers about everything - pay, the kids, lack of respect. You picked this job fools!
I’d disagree, I think most of those tenured teachers that you can’t get out of the system are in fact leeching.
While they reduce the percent value the counties, cities, whoever tack on all kinds of fees. Stuff like fire ant control, $20 bucks a month for trash, etc. For me, it adds up to about five hundred bucks. I’m sure we’ll see more of this in the future.
Cap and trade is enslavement of all people to anything that involves energy. Taxes will skyrocket and so will your electric and fuel bills.
Your elected officials hard at work representing your best interests.
California is a welfare state…filled with to many free loaders expecting someone else to foot the bill. They are to stupid to understand that money really isnt something that is just made on a machine. The rest of us are supposed to take care of them out of charity and humanity and a civic duty??/
BS!! Where is their sense of community and civic duty? Where is their contribution to the betterment of the “village”? No…somehow society started catering to the lowest denominator..as if they are the ones most capable to run things. Sadly, this is also the case with public schools..we dumb up the materials and cater to the lowest achievers while the most capable ones are left to rot on the vine.
The state govt. is filled with to many lackeys who are less qualified to flip burgers than most people who are in fact unemployed…yet they run the show?
The ONLY way this changes is if EVERY single incumbent is voted out no matter what party they represent. Yes this does mean that some decent politicians will go down with the majority of the bad…but a clean slate is a must. Then every single elected office gets a term limit = no more life long “public servants”
Why is it that only part of the population understands SINGLE Family home? Thats what i dont understand, if I let every Tom Dick and Harry move in, the city would come and cite me, but others do it and theres no problem. It is a shame, ONE residence accounting for 6 students, depleting the resources of the school.
The best thing Sacramento politicians could do is cut spending, cut taxes, and allow people to keep more of their money. Will that ever happen? I’m not holding my breath, that’s for sure.
Seriously, I am going to save $7! Take my $7 and save jobs…or better yet, dont raise DMV fees. Taking billions fromthe state to save my family and other $7 is pointless! KEEP MY $7!
I smell a rat…….. They better not try to do away with Prop 13.