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Richard Rider

Average San Diego homeowner saves over $680 a MONTH, thanks to Prop 13

NOTE:  This is an updated article — using June, 2017 numbers.

It’s an educational (and scary) exercise to consider what our property taxes would be if Prop 13 had NOT passed in 1978 — and no subsequent reforms in property taxes occurred (a fair assumption, given Democrat dominance of the state legislature since 1970).

Most people have forgotten the following aspect:  “In 1977, the average property tax rate in California was 2.67 percent. Proposition 13 fixed the rate at 1 percent of the purchase price [plus a 2% annual increase, or the COL, if less].  On top of the 1% is whatever additional rate is approved to cover voter-approved indebtedness, such as bonds. Although the additional rate varies around the state, it generally runs at about one-tenth of 1 percent, setting the overall Proposition 13 rate at 1.1 percent.”

http://www.caltax.org/WhatProposition13Did.pdf — page 1

Actually most people today will find that this article’s outdated “1.1%” property tax rate understates what is actually paid.  Looking at my own property tax bill, my annual “1%” tax on our 1993 purchase is $4,526.13 in 2014.  The other taxes for bonds, special districts, etc, bring my total property tax bill to $5,560.52.  Hence my extra taxes compared to my 1% bill raise my property tax 22.9% — making the total rate 1.229%.

But let’s go back to that 2.67% property tax rate in the “good old days” of 1977 — when CA government supposedly worked great — and apply it to today’s housing.  The median home price in the city of San Diego in June, 2017 was $578,400.

http://www.zillow.com/san-diego-ca/home-values/

2.67% of 578,400 (less the paltry $7,000 “homeowner exemption”) translates into an annual property tax of $15,256 — basically $1,271 a month.  And if CA home prices shot up 20% in one year (as some Californians faced just prior to the passage of Prop 13), then your property taxes ALSO would shoot up 20%.

Under the current Prop 13 rules (applying my typical 1.229% total tax rate), a family purchasing a median priced house in San Diego today for $578,400 pays an initial property tax of $7,023 — about $585 a month.  Thus with Prop 13, the average California homeowner is saving at LEAST $686 a month over what they would pay using the tax formula in place before Prop 13 passed.

That’s almost SEVEN HUNDRED DOLLARS saved by Prop 13.  EVERY month.

$15,256 is the property tax that the progressives so fervently wish we still paid on the average home in San Diego.  THIS is the “good old days” — using the same tax rules that applied prior to the passage of Prop 13.

One other consideration:  Even though we save thousands of our property taxes each year (thanks to Prop 13), the median California homeowner STILL pays the 10th highest amount of property taxes in the nation.  Indeed, the median California homeowner’s property tax BILL is 93% higher than than the average homeowner property tax bill paid in the other 49 states.

http://taxfoundation.org/article/property-taxes-owner-occupied-housing-state-2004-2009
and
http://riderrants.blogspot.com/2015/12/ca-homeowner-median-property-tax-10th.html

BTW, anyone who believes our OTHER California taxes would be lower if the old property taxes rules still applied is living in some parallel universe.  No matter how high the CA taxes are, you could ask any state liberal “How much taxes should we pay?” and you’d always get the same answer:

MORE!!!