interestrateripoff Posted June 14, 2010 Share Posted June 14, 2010 Property Taxes Falling in Los Angeles County; Tax Revenues Will Plunge The Los Angeles Daily News reports Property taxes in county falling. Some 405,000 Los Angeles County homeowners will have up to 1,800 reasons to smile this year following the latest reassessment of property values. The average annual tax bill for affected homeowners will fall between $1,500 and $1,800, LA County Assessor Robert Quon said Wednesday after reviewing 405,000 homes. Similar reviews done last year and in 2008 resulted in lower property taxes for more than 330,000 homeowners. For single-family homes, the average value reduction was $162,000, amounting to an average property tax savings of $1,800, Quon said. For condos, the average reduction was $133,000, or an average savings of $1,500. The lower assessed values will be reflected on the property tax bills sent out in October. The assessed value of properties in the county is expected to drop 2.3 percent this year - compared to just a .05 percent dip last year, Quon said. The drop, the largest in recent history, will further reduce the county's property tax revenues, which have already fallen by $132 million in the last two years. The decline in property tax revenues comes as the number of people seeking $221 a month in checks from General Relief, the county's welfare program, has increased more than 60 percent from 58,000 in 2007 to nearly 94,000 today, Assistant Chief Executive Officer Ryan Alsop said. Tax Revenues Will Plunge by $600-$729 Million This story comes to me from reader Gregory Levine who writes ... Hello Mish According to the Daily News, property taxes in Los Angeles county are falling: "The average annual tax bill for affected homeowners will fall between $1,500 and $1,800. Some quick back-of-the-napkin math tells me that LA county revenues will drop by $600-700 million. Notwithstanding the obvious boost to consumer spending (for those who have jobs), I am wondering how the county survives a tax hit like this. The revenue isn't coming back for years (if ever) and, of course, the money's long spent or promised on pensions. Moreover, the number of people applying for welfare has increased by 60%. Thank God sitting in the sun is cheap! Cheers, Greg By the way, a quick check of LA County Facts from the census department shows that as of 2008, there are 3,385,944 housing units of which 42% were multi-family. The latter number is as of 2000. How many more houses will be revised lower? Eventually almost all of them will be, assuming and honest evaluation of course. Tax revenues down, it would appear that the local govt have been expanding with boom time prices, they have become unsustainable. Still I'm sure it's all contained and they will have prepared for the inevitable fall in prices.... Quote Link to comment Share on other sites More sharing options...
Stars Posted June 14, 2010 Share Posted June 14, 2010 Just a note - California has proposition 13 which all but specifically forbids a land tax Quote Link to comment Share on other sites More sharing options...
LuckyOne Posted June 14, 2010 Share Posted June 14, 2010 Just a note - California has proposition 13 which all but specifically forbids a land tax I would put it slightly differently. Prop 13 limits the total tax on land plus improvements (buildings) to 1% of the value of the land plus improvements per year. The savings mentioned in the article are cold comfort to leveraged owners of homes. By definition, the tax savings are only 1% of the drop in the value of the property. To save $1,800 per year in taxes means a $180,000 drop in the value of the house. Quote Link to comment Share on other sites More sharing options...
Stars Posted June 14, 2010 Share Posted June 14, 2010 I would put it slightly differently. Prop 13 limits the total tax on land plus improvements (buildings) to 1% of the value of the land plus improvements per year. Prop 13 also makes it illegal to make a tax distinction between the land value and the added value. what an odd thing to do. The savings mentioned in the article are cold comfort to leveraged owners of homes. By definition, the tax savings are only 1% of the drop in the value of the property. To save $1,800 per year in taxes means a $180,000 drop in the value of the house. The restrictions (both quantative and qualitative) on the tax that could fall on real estate made California a real estate speculation paradise Quote Link to comment Share on other sites More sharing options...
LuckyOne Posted June 14, 2010 Share Posted June 14, 2010 Prop 13 also makes it illegal to make a tax distinction between the land value and the added value. what an odd thing to do. The restrictions (both quantative and qualitative) on the tax that could fall on real estate made California a real estate speculation paradise The inflation rules within the Prop 13 rules created an incentive for people to hold onto properties when the rate of property price inflation was above 2%. As prices rose rapidly, older owners had a strong incentive to stay put which restricted supply which caused prices to rise further. A lesson to be learned here if we go down some sort of land tax path. Quote Link to comment Share on other sites More sharing options...
Stars Posted June 14, 2010 Share Posted June 14, 2010 The inflation rules within the Prop 13 rules created an incentive for people to hold onto properties when the rate of property price inflation was above 2%. As prices rose rapidly, older owners had a strong incentive to stay put which restricted supply which caused prices to rise further. A lesson to be learned here if we go down some sort of land tax path. Also, being able to collect rising land price is an incentive to hold land Quote Link to comment Share on other sites More sharing options...
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