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You're only talking $45k in taxes to go 100% liquid and if the income requirements don't change it could be zero tax. Why tie all that money up in deferred taxes? You could make up the $45k difference in tax free bonds in less than two years.Quote:
Originally Posted by liv2ski
In markets that are so retarded that homes shoot up quickly from 150k-700k, a la California, those people freaking deserve to pay some capital gains taxes. Don't get me wrong, I'm not a fan of capital gains taxes in most cases, BUT in the real estate world, it seems almost necessary to keep Californians and other volatile markets at least somewhat in check. Geez that market is always so wacky. I prefer a healthy, slower appreciation for an areas longevity, but maybe that's just me. My local market's recovering from a hard crash, which was 100% fully deserved as it was way out of touch with reality and seemed way too speculative, but hopefully now that it's bottomed out, it will come back gradually. I for one, am not in the mood to have my property taxes hiked up every year, not mention how hard a boom-bust cycle is on a local economy.Quote:
Originally Posted by cramer
Ca. property taxes are capped based on your purchase price. It's good and bad. Bad because is stifles mobility and good because it keeps taxes relatively fixed.Quote:
Originally Posted by AustinFromSA
Not sure how you are getting those numbers, as we paid a butt load in taxes when we sold a rental property in 2000. Assume basis is $200k+$100k in improvements = $300k + $500k exemption for wife an I is $800k. That leaves at least $200k subject to Fed and CA taxes. Combined earnings are 6 figures, so I am sure the taxes are double what you said on the excess $200k. But if I am wrong, that would be great and then your point would be well taken.Quote:
Originally Posted by 4matic
Long term capital gain is 15% for your bracket. On $200k that would be $30k.Quote:
Originally Posted by liv2ski
That's good. And probably necessary with a market shooting up like it's prone to do. Otherwise people would be taxed out of their own homes, which kind of scares me. I bought a foreclosed home in a depressed market. Would've been quite difficult to afford the taxes if appraised at its peak. Better keep it looking like a dump in case the appraisers come around! Haha.Quote:
Originally Posted by 4matic
I disagree somewhat. If property taxes were smoothed across a broader range in Cal. (senior exemption would be good) it would create trade up mobility, a more normal supply market, and a more equitable tax system. It's been all down hill in Cal. since Prop 13.Quote:
Originally Posted by AustinFromSA
It's part of why California is so boom and bust real estate wise. You know, what a couple posts ago you were slamming. Why should a beachfront home worth millions, now, have a tax basis of $30-40k because they bought it for that back in the 70s? Are they somehow using <4% of the services that their neighbor who bought last year, and has a tax basis of $1 million+?Quote:
Originally Posted by AustinFromSA
Interesting. So no matter what, there are serious consequences. Bummer.
I would move if I didn't have a favorable tax base locked in.
What are the serious consequences of a progressive tax base?Quote:
Originally Posted by AustinFromSA
People don't get a free ride?Quote:
Originally Posted by 4matic
I think Prop 13 did do a bit to "preserve" the character of some towns/cities, but it's influence and utility has waned through multiple real estate booms and a substantially changing industrial base for California. Now it encourages zombie corps and homeowners and slumlords, exactly what the state doesn't need.
Much like the unintended consequences of rent control elsewhere.Quote:
Originally Posted by 4matic
Well, if we're talking property taxes, it's tough for people who (1) bought a house they could afford, (2) real estate market around them boomed, (3) property taxes shot up as a result, (4) lose the home because they can no longer afford the taxes for the home they could once afford. This could especially be true for grandma and grandpa on fixed incomes.Quote:
Originally Posted by 4matic
My home was once worth more than double what I paid for it. I'm being taxed on its current value. If my taxes double, and the rest of the area's, then how can the local residents afford that? Especially when the usual income around here isn't that good to begin with?
THAT'S the consequence of a progressive tax base. Again, I mean in regard to property taxes. As you've pointed out, though, by NOT doing messing with property taxes, there too bely consequences of other sorts. Damned if you do, damned if you don't.
Oh poor ma & pa kettle who were doomed to live in a prosperous community.
Millions of Boomers with no income or savings know this very well right now. In my neighborhood, property taxes are approaching and sometimes beyond social security checks.Quote:
Originally Posted by AustinFromSA
"those people" deserve to pay? hehe..sheesh, thats kind of harsh.Quote:
Originally Posted by AustinFromSA
Well most who bought in 2008-2012 paid a hefty amount of property taxes the first year on their house. You pay taxes on the last sold house price. Which for me was 560K house i bought less than half that. I was cut a 1500 dollar check end of year and my payment went down more than 100 bones. Considering my house would have to more than double in value to be paying that original payment again, i think people will be fine in regards to their tax bills going up. I'm 5 years in on this place come December, yes the prices are rising rapidly, but they arent going to double in the next 5 years. Well, at least i hope not, lol. Even if they did, thats 100 bucks a month to put away for me. That is not going to be the case for 90% of the country. And thats not going to break the bank for 90% of those who bought homes. Sorry you only get ribeye's once a month or you can only go out to dinner once or twice a month. You'll live. Otherwise you should have never bought in the first place.Quote:
Originally Posted by AustinFromSA
That's an administrative item. You only pay taxes on your assessed value from the time you own it. The $1500 was a rebate.Quote:
Originally Posted by cramer
What do you mean administrave item? I had to pay taxes on my house for a year at that last sold value. Yes, understood, it was a rebate. My point was that if you bought when i had or bought an REO, you are looking at your largest house payment that first year. Thus, if you afforded it then, you are probably ok.Quote:
Originally Posted by 4matic
4.85% on 30 year fixed and Jumbos hit 5%+ today. Bonds weaker after the close so it's not over yet. 5% 30 year conventional easily next week.
It's a great time to buy!
I paid that but got a rebate the next year based on new purchase price.Quote:
Originally Posted by cramer
Mark my words, prices will be lower in 12 months. Prices are all ready rolling over in many previously hot areas if you look at the 6 month, 3 month and 1 month averages. Brokers are telling me lots of previous home shoppers are out of the market with rates scary high at 4.5%:rolleyes2Quote:
Originally Posted by 4matic
I lost one and maybe two deals with the rate volatility. I am closing (sale) on my personal home on Wednesday; I know for a fact that I could not get the same price if I were selling right now. It would probably be $10k less. We are still on track to close on the HUD home, but I was able to pick that up at substantial savings due to winning the bid during the "owner occupant" only window.Quote:
Originally Posted by liv2ski
We were even a month or two late for the prime selling window, but we still will have one of the top sales in our neighborhood.
I have been loosely keeping an eye on real estate for about 2 years, so you people in the business will know a lot more than I do, but hasn't the monthly payment always been one of the biggest factors in the pricing of most single family homes?Quote:
Originally Posted by liv2ski
Most people live paycheck to paycheck regardless of their income level. They happen to be able to afford $X/month. What will happen if rates continue to go up? Wont RE prices have to come down to match?