Investing in California - pros and cons

San Francisco, California
General Real Estate Investing
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Investing in California - pros and cons

Becca F.
Rental Property Investor · San Francisco Bay Area · Member since 2022 · 1k+ posts · 1k+ votes

I'm a new investor (2019) with 2 properties (1 SFH solely owned and 1 apartment building, co-owned with family) in the Bay Area. I've also been investing in the Indianapolis area, more for cash flow and tax benefits (may be able to get REPS status by logging my hours but that's another topic). The appreciation on the CA properties far surpasses the Indiana ones. I've talked to several people and am aware that I could 1031 my Bay Area SFH with lots of equity to buy a multi-unit or many SFHs in the Midwest and possibly generate more cash flow. I don't plan to do that. I would rather own fewer solid properties than 50 or 100 cheaper properties.

I hear a lot about California being a terrible place to invest with landlord tenant laws. I haven't heard lots of horror stories, just mostly in Alameda County specifically with the COVID moratorium. One San Leandro landlord is owed $132,000 in back rent and in Oakland you can't discriminate against rental applicants with a criminal back ground (except sex offenders) and several stories of non-paying tenants which took thousands in legal fees to evict in Oakland. 

I'm interested in hearing from other CA investors, especially in the Bay Area. I've talked to a couple people successfully flipping here and doing BRRRRs. For long time investors who bought they're able to charge market rate rent and have relatively low monthly payments, either paid off property or low property taxes from Prop 31. For newer investors, they seem to be very high income earners (tech workers, physicians) or have lots of capital but it's tougher to buy here without a lot of money. 

If your a CA investor and 1031'd your properties to buy out of state, would be interested in hearing your experiences. What are your horror stories or success stories? 

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Nate MeekerBusiness Member
Real Estate CPA | California · Member since 2020 · 543 posts · 251 votes
2y

I am considering doing it the other way around.. I bought a bunch of rentals in FL during the pandemic and am going to 1031 them into CA for the risk of weather and appreciation benefits.

Some of my clients are doing pretty good with small-multi family in the Bay Area, but they are getting 20% discounts upfront by sourcing the deals themselves. 

Others are hitting the 1% rule in CA with ADUs and JDUs. 

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  • AJ ExnerPro Member
    Lender · Springfield, MO · Member since 2023 · 651 posts · 314 votes
    2y

    Hey Becca,

    Have you looked into Additional Dwelling Units out there? A few of my clients, and even colleagues that I met at BPCon this year who focus in CA are leveraging ADUs to optimize cash flow and grow their equity position out there. 

    I will caveat that the ones that I know focus in So Cal, so I'm not sure of the intricacies of the Bay, but I would suspect similar issues. 

    [email protected]417-427-2612
    0Reply
  • Travis Biziorek
    Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes
    2y
    Quote from @AJ Exner:

    Hey Becca,

    Have you looked into Additional Dwelling Units out there? A few of my clients, and even colleagues that I met at BPCon this year who focus in CA are leveraging ADUs to optimize cash flow and grow their equity position out there. 

    I will caveat that the ones that I know focus in So Cal, so I'm not sure of the intricacies of the Bay, but I would suspect similar issues. 


     Yep, this is what we're doing here too (on the Central Coast). Lots of learnings and more to come as we break ground this December!

    1Reply
  • Nate MeekerBusiness Member
    Real Estate CPA | California · Member since 2020 · 543 posts · 251 votes
    2y

    I am considering doing it the other way around.. I bought a bunch of rentals in FL during the pandemic and am going to 1031 them into CA for the risk of weather and appreciation benefits.

    Some of my clients are doing pretty good with small-multi family in the Bay Area, but they are getting 20% discounts upfront by sourcing the deals themselves. 

    Others are hitting the 1% rule in CA with ADUs and JDUs. 

    The CPA Realtor 569 Reviews
    WebsiteView Page
    2Reply
  • Becca F.
    OP
    Rental Property Investor · San Francisco Bay Area · Member since 2022 · 1k+ posts · 1k+ votes
    2y
    Quote from @AJ Exner:

    Hey Becca,

    Have you looked into Additional Dwelling Units out there? A few of my clients, and even colleagues that I met at BPCon this year who focus in CA are leveraging ADUs to optimize cash flow and grow their equity position out there. 

    I will caveat that the ones that I know focus in So Cal, so I'm not sure of the intricacies of the Bay, but I would suspect similar issues. 

    My understanding is that a SFH with an ADU would be considered a 2 unit so would be subject to rent control per S.F. Rent Board rules. My downstairs could be a studio apartment if I put in a kitchen. There's not much room in the yard to build an ADU so I'm unlikely to do that.

    I wouldn't be able to raise the rent more than 3.6% with rent control. If an existing tenant moves out, the new tenant would pay market rate rent (this is what happened with the apartment building on one of the units). If it's a SFH there's no rent control. I talked to 2 property management companies who I should rent the house out to one tenant/one household (e.g a couple or family). If it's a roommate situation everyone is under one lease. Some landlords have a master tenant who collects rent from the other tenants but that's not the best way to set it up - I think it could potentially open up the tenant trying to seek legal action against the investor and say that they're under rent control protection with any rent increase.

    Right now I'm self managing and renting to a family member who is getting a great deal (whole house to themselves) so I eventually need to get it up to market rent to make any decent income. My family member is open to having compatible roommates. I've considered doing MTR to travel nurses with the other rooms (would need to furnish the bedrooms). I've had other investor friends tell me I could rent it out by the room but that means separate leases, which to me would make the SFH now a multi-unit. It's confusing to me.

    I found this about rent control in California. It looks like about a dozen cities and there's a difference between rent stabilization and rent control. 

     https://sparkrental.com/rent-control-in-california/

    0Reply
  • Adrian Chu
    Real Estate Broker · Seattle, WA · Member since 2014 · 1k+ posts · 427 votes
    2y

    What are your goals?

    0Reply
  • Brendan S.
    New to Real Estate · Bay Area · Member since 2021 · 25 posts · 7 votes
    2y
    Quote from @Becca F.:
    Quote from @AJ Exner:

    Hey Becca,

    Have you looked into Additional Dwelling Units out there? A few of my clients, and even colleagues that I met at BPCon this year who focus in CA are leveraging ADUs to optimize cash flow and grow their equity position out there. 

    I will caveat that the ones that I know focus in So Cal, so I'm not sure of the intricacies of the Bay, but I would suspect similar issues. 

    My understanding is that a SFH with an ADU would be considered a 2 unit so would be subject to rent control per S.F. Rent Board rules. My downstairs could be a studio apartment if I put in a kitchen. There's not much room in the yard to build an ADU so I'm unlikely to do that.

    I wouldn't be able to raise the rent more than 3.6% with rent control. If an existing tenant moves out, the new tenant would pay market rate rent (this is what happened with the apartment building on one of the units). If it's a SFH there's no rent control. I talked to 2 property management companies who I should rent the house out to one tenant/one household (e.g a couple or family). If it's a roommate situation everyone is under one lease. Some landlords have a master tenant who collects rent from the other tenants but that's not the best way to set it up - I think it could potentially open up the tenant trying to seek legal action against the investor and say that they're under rent control protection with any rent increase.

    Right now I'm self managing and renting to a family member who is getting a great deal (whole house to themselves) so I eventually need to get it up to market rent to make any decent income. My family member is open to having compatible roommates. I've considered doing MTR to travel nurses with the other rooms (would need to furnish the bedrooms). I've had other investor friends tell me I could rent it out by the room but that means separate leases, which to me would make the SFH now a multi-unit. It's confusing to me.

    I found this about rent control in California. It looks like about a dozen cities and there's a difference between rent stabilization and rent control. 

     https://sparkrental.com/rent-control-in-california/


     Hi Becca,

    I live in the Bay Area and I work in a municipal rent program office. I would check that language clearly in SF's ordinance because many times approved ADUs don't change the designation and most programs go off the parcel or APN designation, as long as the additional ADU was added legally. Maybe SF handles it differently than the East Bay cities. Cheers.

    1Reply
  • Mike PaolucciBusiness Member
    Realtor · Columbus Cleveland Dayton, OH · Member since 2022 · 490 posts · 549 votes
    2y
    Quote from @Becca F.:

    I'm a new investor (2019) with 2 properties (1 SFH solely owned and 1 apartment building, co-owned with family) in the Bay Area. I've also been investing in the Indianapolis area, more for cash flow and tax benefits (may be able to get REPS status by logging my hours but that's another topic). The appreciation on the CA properties far surpasses the Indiana ones. I've talked to several people and am aware that I could 1031 my Bay Area SFH with lots of equity to buy a multi-unit or many SFHs in the Midwest and possibly generate more cash flow. I don't plan to do that. I would rather own fewer solid properties than 50 or 100 cheaper properties.

    I hear a lot about California being a terrible place to invest with landlord tenant laws. I haven't heard lots of horror stories, just mostly in Alameda County specifically with the COVID moratorium. One San Leandro landlord is owed $132,000 in back rent and in Oakland you can't discriminate against rental applicants with a criminal back ground (except sex offenders) and several stories of non-paying tenants which took thousands in legal fees to evict in Oakland. 

    I'm interested in hearing from other CA investors, especially in the Bay Area. I've talked to a couple people successfully flipping here and doing BRRRRs. For long time investors who bought they're able to charge market rate rent and have relatively low monthly payments, either paid off property or low property taxes from Prop 31. For newer investors, they seem to be very high income earners (tech workers, physicians) or have lots of capital but it's tougher to buy here without a lot of money. 

    If your a CA investor and 1031'd your properties to buy out of state, would be interested in hearing your experiences. What are your horror stories or success stories? 

    I was born and raised in San Francisco and did some property management for my cousins in North Beach and have no real desire to be a landlord in SF or CA in general. 

    There is a piece of legislation on the November ballot for San Francisco (not sure if it'll be for the whole state) that says that even if a tenant leaves voluntarily, you will be required to market the rental for the same amount that you were previously renting for and will not be able to ask for market rents. 

    Additionally, if you choose to occupy your rental property, and need to get tenants to move out, you'll likely need to Ellis Act the property which you'll need to pay tenants upwards of $35k+ per person to relocate and will eliminate your ability to use it as a rental for up to 10 years. Not exactly something I would want as a landlord. 

    When it comes to Midwest investment opportunities (Ohio markets), I'm able to still have rights as a landlord that will not hinder my ability to maximize ROI with little govt interference.

    [email protected]614-892-9184
    Reafco - Mike Paolucci 512 Reviews
    WebsiteView Page
    1Reply
  • Becca F.
    OP
    Rental Property Investor · San Francisco Bay Area · Member since 2022 · 1k+ posts · 1k+ votes
    2y
    Quote from @Mike Paolucci:
    Quote from @Becca F.:

    I'm a new investor (2019) with 2 properties (1 SFH solely owned and 1 apartment building, co-owned with family) in the Bay Area. I've also been investing in the Indianapolis area, more for cash flow and tax benefits (may be able to get REPS status by logging my hours but that's another topic). The appreciation on the CA properties far surpasses the Indiana ones. I've talked to several people and am aware that I could 1031 my Bay Area SFH with lots of equity to buy a multi-unit or many SFHs in the Midwest and possibly generate more cash flow. I don't plan to do that. I would rather own fewer solid properties than 50 or 100 cheaper properties.

    I hear a lot about California being a terrible place to invest with landlord tenant laws. I haven't heard lots of horror stories, just mostly in Alameda County specifically with the COVID moratorium. One San Leandro landlord is owed $132,000 in back rent and in Oakland you can't discriminate against rental applicants with a criminal back ground (except sex offenders) and several stories of non-paying tenants which took thousands in legal fees to evict in Oakland. 

    I'm interested in hearing from other CA investors, especially in the Bay Area. I've talked to a couple people successfully flipping here and doing BRRRRs. For long time investors who bought they're able to charge market rate rent and have relatively low monthly payments, either paid off property or low property taxes from Prop 31. For newer investors, they seem to be very high income earners (tech workers, physicians) or have lots of capital but it's tougher to buy here without a lot of money. 

    If your a CA investor and 1031'd your properties to buy out of state, would be interested in hearing your experiences. What are your horror stories or success stories? 

    I was born and raised in San Francisco and did some property management for my cousins in North Beach and have no real desire to be a landlord in SF or CA in general. 

    There is a piece of legislation on the November ballot for San Francisco (not sure if it'll be for the whole state) that says that even if a tenant leaves voluntarily, you will be required to market the rental for the same amount that you were previously renting for and will not be able to ask for market rents. 

    Additionally, if you choose to occupy your rental property, and need to get tenants to move out, you'll likely need to Ellis Act the property which you'll need to pay tenants upwards of $35k+ per person to relocate and will eliminate your ability to use it as a rental for up to 10 years. Not exactly something I would want as a landlord. 

    When it comes to Midwest investment opportunities (Ohio markets), I'm able to still have rights as a landlord that will not hinder my ability to maximize ROI with little govt interference.


     Could you please cite the source of this proposed legislation? I typed in variations of "rent increase, proposed legislation for 2024 for San Francisco" in Google and don't see anything saying a landlord can't increase a property to market rent on a new tenant after the previous tenant moves out.

    I talked to 2 PM companies in S.F. and they both said I could rent out a SFH at market rate rent if my current tenant moves out (family member who is getting a deal). On the apartment building, a tenant moved out and the PM company advertised it for market rate rent. From Feb. 1, 2023 - Feb. 29, 2024 rent could be raised 3.6% on rent controlled units on existing tenants. Starting on March 1, 2024 it's 1.7%. So far I haven't had any issues with these tenants - they're either high income earners or long term tenants who take care of the units. All paid rent during COVID.

    With my Indiana properties even though it's landlord friendly, I've been taken advantage of financially by several people (not the tenants) being 2000 miles away (a long story). I don't plan to buy anymore OOS properties for a very long time especially at these interest rates. 

    I know about the Ellis Act but I highly doubt that I would move back into my rentals. I'll move to Nevada before that happens lol

    1Reply
  • Mike PaolucciBusiness Member
    Realtor · Columbus Cleveland Dayton, OH · Member since 2022 · 490 posts · 549 votes
    2y
    Quote from @Becca F.:
    Quote from @Mike Paolucci:
    Quote from @Becca F.:

    I'm a new investor (2019) with 2 properties (1 SFH solely owned and 1 apartment building, co-owned with family) in the Bay Area. I've also been investing in the Indianapolis area, more for cash flow and tax benefits (may be able to get REPS status by logging my hours but that's another topic). The appreciation on the CA properties far surpasses the Indiana ones. I've talked to several people and am aware that I could 1031 my Bay Area SFH with lots of equity to buy a multi-unit or many SFHs in the Midwest and possibly generate more cash flow. I don't plan to do that. I would rather own fewer solid properties than 50 or 100 cheaper properties.

    I hear a lot about California being a terrible place to invest with landlord tenant laws. I haven't heard lots of horror stories, just mostly in Alameda County specifically with the COVID moratorium. One San Leandro landlord is owed $132,000 in back rent and in Oakland you can't discriminate against rental applicants with a criminal back ground (except sex offenders) and several stories of non-paying tenants which took thousands in legal fees to evict in Oakland. 

    I'm interested in hearing from other CA investors, especially in the Bay Area. I've talked to a couple people successfully flipping here and doing BRRRRs. For long time investors who bought they're able to charge market rate rent and have relatively low monthly payments, either paid off property or low property taxes from Prop 31. For newer investors, they seem to be very high income earners (tech workers, physicians) or have lots of capital but it's tougher to buy here without a lot of money. 

    If your a CA investor and 1031'd your properties to buy out of state, would be interested in hearing your experiences. What are your horror stories or success stories? 

    I was born and raised in San Francisco and did some property management for my cousins in North Beach and have no real desire to be a landlord in SF or CA in general. 

    There is a piece of legislation on the November ballot for San Francisco (not sure if it'll be for the whole state) that says that even if a tenant leaves voluntarily, you will be required to market the rental for the same amount that you were previously renting for and will not be able to ask for market rents. 

    Additionally, if you choose to occupy your rental property, and need to get tenants to move out, you'll likely need to Ellis Act the property which you'll need to pay tenants upwards of $35k+ per person to relocate and will eliminate your ability to use it as a rental for up to 10 years. Not exactly something I would want as a landlord. 

    When it comes to Midwest investment opportunities (Ohio markets), I'm able to still have rights as a landlord that will not hinder my ability to maximize ROI with little govt interference.


     Could you please cite the source of this proposed legislation? I typed in variations of "rent increase, proposed legislation for 2024 for San Francisco" in Google and don't see anything saying a landlord can't increase a property to market rent on a new tenant after the previous tenant moves out.

    I talked to 2 PM companies in S.F. and they both said I could rent out a SFH at market rate rent if my current tenant moves out (family member who is getting a deal). On the apartment building, a tenant moved out and the PM company advertised it for market rate rent. From Feb. 1, 2023 - Feb. 29, 2024 rent could be raised 3.6% on rent controlled units on existing tenants. Starting on March 1, 2024 it's 1.7%. So far I haven't had any issues with these tenants - they're either high income earners or long term tenants who take care of the units. All paid rent during COVID.

    With my Indiana properties even though it's landlord friendly, I've been taken advantage of financially by several people (not the tenants) being 2000 miles away (a long story). I don't plan to buy anymore OOS properties for a very long time especially at these interest rates. 

    I know about the Ellis Act but I highly doubt that I would move back into my rentals. I'll move to Nevada before that happens lol

    @Becca F. see link --> California Prohibit State Limitations on Local Rent Control Initiative (2024)

    It was proposed as Prop 10 back in 2018 but did not pass. As of right now, the property managers are correct, you can still get market rents for new tenants. 

    However, if this legislation passes, it could "abolish the state's existing ban on vacancy control. Vacancy control prohibits rental housing providers from adjusting rents to market rates when a tenant moves out. Such a policy leads to property deterioration and stifled investment in housing."

    When it comes to the OOS investing, I can't speak to Indiana and teams you have in place there. Sorry to hear about that. What I can speak to, however, are the teams I have in place here in Columbus, OH. I've worked with them since I started investing while living in San Francisco back in 2021. I've been pretty happy with my experiences so far. I know at least 3 other bay area investors who I've referred my team to and they haven't given any negative feedback.  

    [email protected]614-892-9184
    Reafco - Mike Paolucci 512 Reviews
    WebsiteView Page
    1Reply
  • Raju BalakrishnanPro Member
    Rental Property Investor · Santa Clara, CA · Member since 2016 · 219 posts · 112 votes
    2y

    As of now Costa-Hawkins prohibits rent controls between tenants (is that restriction ends as tenant leaves) in California. But there is a new act called "Justices for Renters" going for ballot in 2024. If that passes, Costa Hawkins will be repealed and Cities can decide on more stringent rent control. Attempts to repeal Costa-Hawkins have failed in the past, but it is possible. 

    0Reply
  • Becca F.
    OP
    Rental Property Investor · San Francisco Bay Area · Member since 2022 · 1k+ posts · 1k+ votes
    2y
    Quote from @Mike Paolucci:
    Quote from @Becca F.:
    Quote from @Mike Paolucci:
    Quote from @Becca F.:

    I'm a new investor (2019) with 2 properties (1 SFH solely owned and 1 apartment building, co-owned with family) in the Bay Area. I've also been investing in the Indianapolis area, more for cash flow and tax benefits (may be able to get REPS status by logging my hours but that's another topic). The appreciation on the CA properties far surpasses the Indiana ones. I've talked to several people and am aware that I could 1031 my Bay Area SFH with lots of equity to buy a multi-unit or many SFHs in the Midwest and possibly generate more cash flow. I don't plan to do that. I would rather own fewer solid properties than 50 or 100 cheaper properties.

    I hear a lot about California being a terrible place to invest with landlord tenant laws. I haven't heard lots of horror stories, just mostly in Alameda County specifically with the COVID moratorium. One San Leandro landlord is owed $132,000 in back rent and in Oakland you can't discriminate against rental applicants with a criminal back ground (except sex offenders) and several stories of non-paying tenants which took thousands in legal fees to evict in Oakland. 

    I'm interested in hearing from other CA investors, especially in the Bay Area. I've talked to a couple people successfully flipping here and doing BRRRRs. For long time investors who bought they're able to charge market rate rent and have relatively low monthly payments, either paid off property or low property taxes from Prop 31. For newer investors, they seem to be very high income earners (tech workers, physicians) or have lots of capital but it's tougher to buy here without a lot of money. 

    If your a CA investor and 1031'd your properties to buy out of state, would be interested in hearing your experiences. What are your horror stories or success stories? 

    I was born and raised in San Francisco and did some property management for my cousins in North Beach and have no real desire to be a landlord in SF or CA in general. 

    There is a piece of legislation on the November ballot for San Francisco (not sure if it'll be for the whole state) that says that even if a tenant leaves voluntarily, you will be required to market the rental for the same amount that you were previously renting for and will not be able to ask for market rents. 

    Additionally, if you choose to occupy your rental property, and need to get tenants to move out, you'll likely need to Ellis Act the property which you'll need to pay tenants upwards of $35k+ per person to relocate and will eliminate your ability to use it as a rental for up to 10 years. Not exactly something I would want as a landlord. 

    When it comes to Midwest investment opportunities (Ohio markets), I'm able to still have rights as a landlord that will not hinder my ability to maximize ROI with little govt interference.


     Could you please cite the source of this proposed legislation? I typed in variations of "rent increase, proposed legislation for 2024 for San Francisco" in Google and don't see anything saying a landlord can't increase a property to market rent on a new tenant after the previous tenant moves out.

    I talked to 2 PM companies in S.F. and they both said I could rent out a SFH at market rate rent if my current tenant moves out (family member who is getting a deal). On the apartment building, a tenant moved out and the PM company advertised it for market rate rent. From Feb. 1, 2023 - Feb. 29, 2024 rent could be raised 3.6% on rent controlled units on existing tenants. Starting on March 1, 2024 it's 1.7%. So far I haven't had any issues with these tenants - they're either high income earners or long term tenants who take care of the units. All paid rent during COVID.

    With my Indiana properties even though it's landlord friendly, I've been taken advantage of financially by several people (not the tenants) being 2000 miles away (a long story). I don't plan to buy anymore OOS properties for a very long time especially at these interest rates. 

    I know about the Ellis Act but I highly doubt that I would move back into my rentals. I'll move to Nevada before that happens lol

    @Becca F. see link --> California Prohibit State Limitations on Local Rent Control Initiative (2024)

    It was proposed as Prop 10 back in 2018 but did not pass. As of right now, the property managers are correct, you can still get market rents for new tenants. 

    However, if this legislation passes, it could "abolish the state's existing ban on vacancy control. Vacancy control prohibits rental housing providers from adjusting rents to market rates when a tenant moves out. Such a policy leads to property deterioration and stifled investment in housing."

    When it comes to the OOS investing, I can't speak to Indiana and teams you have in place there. Sorry to hear about that. What I can speak to, however, are the teams I have in place here in Columbus, OH. I've worked with them since I started investing while living in San Francisco back in 2021. I've been pretty happy with my experiences so far. I know at least 3 other bay area investors who I've referred my team to and they haven't given any negative feedback.  


    I will make my California friends aware of this ballot initiative and to recommend a No vote. That's crazy.  Insurance has gone up a lot and costs of repairs, etc. People who have owned their properties for a very long time 30 to 50+ years have reasonable property taxes that go up at max of 2% a year but someone who bought in the last 10 years has higher property taxes. So I guess they better not give their tenants a deal when they first rent it out if this initiative passes, otherwise they may be stuck with the low rent for a long time. 

    0Reply
  • Becca F.
    OP
    Rental Property Investor · San Francisco Bay Area · Member since 2022 · 1k+ posts · 1k+ votes
    2y

    Did anyone see this? 

    https://reinstate58.hjta.org/

    To repeal the death tax part of Prop. 19. Right now if my kids inherit my rental property it will be reassessed to market value and their property tax will skyrocket - it takes a while, maybe a year or so after the death of the parent for all that paperwork to go through the county assessor's office. If someone's property tax is $6000 a year (parent's low property tax basis) then it goes way up to $25,000 with a reassessment many people would have to sell. It's only if my kids inherit my primary residence and live in the home that they inherit my low property tax basis. That's my understanding of Prop 19 and that passed under the guise of helping fire victims and senior citizens transfer their low property tax basis to a new property if they moved. 

    This wasn't more widely publicized. I circulated the petition and got a few signatures but someone people didn't want to sign it. Someone actually tried to argue with me lol...This would have removed the death tax part of Prop. 19 but it didn't get enough signatures to get on the Nov. ballot, sadly

    2Reply
  • Brendan S.
    New to Real Estate · Bay Area · Member since 2021 · 25 posts · 7 votes
    2y
    Quote from @Becca F.:

    Did anyone see this? 

    https://reinstate58.hjta.org/

    To repeal the death tax part of Prop. 19. Right now if my kids inherit my rental property it will be reassessed to market value and their property tax will skyrocket - it takes a while, maybe a year or so after the death of the parent for all that paperwork to go through the county assessor's office. If someone's property tax is $6000 a year (parent's low property tax basis) then it goes way up to $25,000 with a reassessment many people would have to sell. It's only if my kids inherit my primary residence and live in the home that they inherit my low property tax basis. That's my understanding of Prop 19 and that passed under the guise of helping fire victims and senior citizens transfer their low property tax basis to a new property if they moved. 

    This wasn't more widely publicized. I circulated the petition and got a few signatures but someone people didn't want to sign it. Someone actually tried to argue with me lol...This would have removed the death tax part of Prop. 19 but it didn't get enough signatures to get on the Nov. ballot, sadly

    I don't actually have a problem with a higher tax rate for heirs of property. Why should my family inherit a low tax rate on my death? They are already inheriting my property; the government isn't required to benefit them even further. Prop 13 is already huge benefit to those of us that own property, insisting on inheritance of a regressive tax benefit doesn't seem to be in the public interest. 
    0Reply
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