California: State starts withholding taxes on sale of vacation property

The San Jose Mercury News ^ | Sat, Jan. 18, 2003 | Sue McAllister Mercury News

[vikingcelt]

We moved from California in October. I knew nothing about this law until my house in the Bay Area was ready to close escrow. Fortunately it did not apply to me (if the home was your primary residence for at least 2 out of the last 5 years you weren't liable for the tax!) but it absolutely shocked me nonetheless. This to me is theft. Absolute theft. I already had to pay half (it's traditional that the buyer and seller split the tax) of a 1.5% "transfer tax" to the City of Oakland. That's right...you have to pay a tax for the right to "transfer" your property in Oakland, California....and for what? A total lack of respect and services in my opinion. I will never pay another penny of taxes in the state of California for as long as I live. My blood, sweat and tears went into the two houses that I owned in Oakland over the years...also lots of money in property taxes...and my granddaughter can't even go to a decent public school there...she's almost 9 and she's been going to private school all her life so far...I'm just glad I'm gone from there...I wish that my daughter and granddaughter could leave too.

[NormsRevenge]

Thanks for the Ping. The Davi$ Depression just keeps on growing!

[ErnBatavia]

Along this line, I read in yesterday's paper that the state now, due to "budgetary problems" probably won't be able to provide that half-cent sales tax rider money that we voted in for roads....Hosed again - we voted a half cent for a specific purpose, and it's just being sucked into wherever Davis feels like applying it.

[Happy2BMe]

"..wherever Davis feels like applying it."

I feel fer 'ya, but I can't quite reach 'ya.

(Five states away from koo-koo land and soooo happy.)

[Grampa Dave]

Vikingcelt's post here explains why there is a tax on some homes. Sounds like people who sold their home before two years of residence would get taxed.

We moved from California in October. I knew nothing about this law until my house in the Bay Area was ready to close escrow. Fortunately it did not apply to me (if the home was your primary residence for at least 2 out of the last 5 years you weren't liable for the tax!) but it absolutely shocked me nonetheless. This to me is theft. Absolute theft. I already had to pay half (it's traditional that the buyer and seller split the tax) of a 1.5% "transfer tax" to the City of Oakland. That's right...you have to pay a tax for the right to "transfer" your property in Oakland, California....and for what? A total lack of respect and services in my opinion. I will never pay another penny of taxes in the state of California for as long as I live. My blood, sweat and tears went into the two houses that I owned in Oakland over the years...also lots of money in property taxes...and my granddaughter can't even go to a decent public school there...she's almost 9 and she's been going to private school all her life so far...I'm just glad I'm gone from there...I wish that my daughter and granddaughter could leave too.

Knowing these rats if you sold your home and didn't live in it 5 years, you probably were taxed.

[Ernest_at_the_Beach]

I like the headline on this one:

California: Governor gives case to increase gaming cut - Tribes asked to be community-minded

You just need to be community-minded!

[Mr. Mojo]

They reelected Davis so they got what they deserve!

Cali residents elected Davis because he had them utterly convinced that if they didn't, the GOP would eliminate a woman's "right to choose." No joke, whenever I asked a Cali Dem or Ind why he/she was voting for Davis, the response always included abortion. ....As if a lone Governor could do anything about a Federal law.

[Happy2BMe]

"..the response always included abortion."

Call this stone-age victorian ignorance if you may, but California IMHO is the most (morally) corrupt place on earth.

[Dog Gone]

If you're broke, California is a great place to move to. Heck, even the homeless get monthly checks in San Francisco.

There's all kinds of goodies for you provided by Sacramento if you have few assets.

However, if you have assets, California isn't such a great place to move to, because California is intent on separating you from them.

The old adage is true. You get more of what you subsidize and less of what you tax. That applies to people, as well.

[KAUAIBOUND]

This is nothing new for CA. I am a registered civil engineer in CA, and done work there while being located in AZ. In 1990 or 91, I received a letter demanding a portion of my income from any projects in CA or with CA clients. I wrote back a nasty response telling them where to go and never heard from them again. I heard years ago about the taxing of CA source pension income to out-of-state residents, which was challenged in court. Does anyone know what the legal outcome was?

[hunter112]

Well, CA gets its ideas from the Feds, the US is one of the few countries that tries to tax the world-wide incomes of its citizens. It's one of the reasons we'll never have an income tax here even in the People's Republic of Washington State!

I wonder if there is a way around this by using installment sales? That prevents immediate taxability of a profit, and might have been a loophole in the withholding law. I can see a lot of people moving at least one family member into the "vacation" home before it sells, to avoid the withholding. Even if the "move" is flimsy, you'd still have a leg to stand on in telling the escrow agent that it was not a vacation home, and by the time the CA tax board would get around to auditing that, maybe there will be a repeal or at least an injunction.

[Poohbah]

Actually, I'd propose limiting the amount of time the legislature may meet to enact NEW laws.

Laws whose sole content is "California State Code Section Diddly-Squat is hereby repealed" may be passed at any time.

[sasquatch]

I'm assuming they won't be able to nab us.

Davis will try to make it retroactive to Sept. 9, 1850.

[Riverman94610]

Putah Creek!!You DO know the Calif Dept of Transportation changed the name years ago,right?As a kid on family vacations to Tahoe,I had no idea of what the word translated into!Surprised someone knowledgeable in Spanish didn't catch it earlier.

[I got the rope]

The problem with this is that Texas will be watered down by RINO types.

[RAT Patrol]

Outrageous!

[tubebender]

One was that there would be taxes on the sale of vacation properties, and the other was old men like you and I read here on FR, that all properties would be taxed.

That's next year I'm sure...:-(

[monkeyshine]

What a mess.

[PISANO]

Move to NEVADA. Nevada passed a law DENYING California from collecting state taxes on military pensions some years back.

[SierraWasp]

"Putah Creek!!You DO know the Calif Dept of Transportation changed the name years ago,right?"

No cottonpickin way!!! It still runs through the People's Repellic of Davis, right next to UCDavis and is still named Putah!!! These are "waters of the United States" and CalTrans ain't got no jurisdiction, nohow!!!

That bloated bureaucrazy had best stick to pot and holes, rather than deny the whores their revenue stream named after them!!! Judging by your zipper, (ahem) you're way down in the deep south end of CA, right? (grin)

Are you a commercial whitewater rafter?