The problem with Prop. 19

In his example similar houses in his neighborhood pay between $2,000 and $40,000 in property taxes.

This means that a house paying $2,000 was purchased around 1985 or before.

The house paying $40,000 was purchased last year or so.

The family that bought the house in 1985 has grown, had children, and now their 30-year-old lives in the house, which is worth $3M, yet paying only $2,000/year.  

If he would inherit this house now, he would have to pay ~ $40,000 in property taxes annually.

If he cannot afford this — he has to sell the house.

If he sells the house for $3M, he will be lucky to net $2.7M (after seller’s closing costs).

If he wants to live in the same neighborhood where he grew up, he will have to buy a house for $2.5M, because of buyer’s closing costs.

In other words — Proposition 19 forces children to either downsize or leave the area altogether.

In plain language this is called family destruction.  

Yet families are the fundamental blocks of our society. Any society.

A house is an investment.

Investments are fundamental forces driving our prosperity and wellbeing.

Failure to recognize this simple axiom destroys societies.

Proposition 19 was pushed through by deception to benefit the real estate lobby, which does not care about our society — just profits.

P.S.: Do you pay taxes on your Google stock you bought in 2004 for $3 (equivalent) which is now worth $336?

Zinovy Fichtenholz