Contrary to the addition to the title, the article isn’t about property taxes.
California, you see, charges a sales tax on home sales.
The author of the brief article is under the misimpression that lower government *appraisals* of homes winds up lowering the sales tax on said homes, however, so the confusion is understandable.
Anyway, the net result is that California government entities like towns and counties should expect less sales tax income in 2008 because fewer homes will be sold, and those that do sell will go for lower prices.
I disagree. Prop 13 established that property taxes are tied directly to the sales price at time of acquisition. Past that time, there are severe limits on any increases in property taxes as long as the ownership of the property doesn't change.
But another law permits homeowners to ask for a re-appraisal if the market value of their property significantly declines.
I know a person who purchased a condo mid last year for $375k. The market value appears to have declined with similar condos now selling for $300k.
The annual property tax on such a condo will be $3750 initially. A re-appraisal at $300k would immediately lower the rate to $3000. The new rate would only be permitted to rise at about 2% or so per year, I believe, not even matching inflation.
Unlike in my relatively stable rural locale, most homes get new owners about every five years, I think. That would mean a considerable loss of property tax revenue which might already include nearly half of all homes in the state and increasing to include an even greater number in the next two or three years.
This is not going to be a good time to be a liberal in Kalifornia. Lots of chickens are coming home to roost. If you can't live on the eggs, it will be time to add chicken to the menu.