“California’s Jerry Brown calls the tax law “evil in the extreme.” That’s demagoguery. Most taxpayers will end up with more money in their wallets.”
Well, in this case, as regards home purchases here in the SF Bay Area, there is some truth to what Jerry the Fairy is saying. Thanks to Proposition 13, people who have lived in their home for any length of time will be fine. But when homes change hands here under Prop 13, they are reassessed to 1% per annum of their current market value. The homes on our road were all built in the early 1980’s when Jimmah Cahtah had mortgage interest rate hovering around 20%. We built ours with 18.5% construction money, but we got a big home at a very low cost because there was little building going on and both labor and material costs were, as a consequence way down. Now, 30 years later, these homes are selling at a premium because there’s no more space to build and construction costs are very high. A relatively young couple bought the home across the road from us last year. Based on what they paid for the place, their property taxes are 4X ours, and the new tax law will not give them the ability to deduct all of it.