[..]Here’s an example (https://www.zillow.com/homes/4511-Sally-Dr-San-Jose,-CA-9512...) of how this could work for a typical San Jose home — footsteps away from one of our customers. The new house on the split lot has a sale value of $1.5M, based on a same-sized new-build home on the block. The total cost for building the new unit, including permitting, local fees, and financing, is $700k. That’s a net profit of $800k, of which the homeowner’s 80% share is $640k.[..]
so...this home when split will have two units..each valued at 1.5 million. the state will get taxes at about $40k/year instead of the current 4-5k they seem to be paying for the past several decades.
if i were the owner and i have lived there for 30 years..it doesnt make sense from the pov of taxes. if i am the child who inherited the home, everything is essentially free. so there's that. and you make 20% profit.
but as the neighbour..as someone who pays tax for the services the city provides, as a renter in the neighbourhood who has to deal with higher water charges, crowded schools for my children, bad roads, inadequately staffed police stations/fire stations/post offices etc.(all public sector jobs that have unions and whose employees receive pensions till they die), it is a lose lose proposition.
any digression into the 'unfairness of prop 13' is something i am not going to engage in..i dont see why a 75 year old resident who has lived in the neighbourhood for 30-40 years have to pay for schools his children went to decades ago. we owe our senior citizens more than envy and jealousy over their hard earned money.
there are plenty of land in california that can be developed sustainably. and can house people comfortably. the problem is with sacramento that makes housing permits and fees and costs so high..and the historical unfunded pension liablities of public sectors that need more and more and more californians to be taxed to death every decade that is the problem.
and not taking into account that we are a desert and we are in a drought and we havent developed infrastructure or affordable utilities or sustainable public education or public transport. all while being taxed to death.
those numbers make NO sense to home owners. especially if they are in san jose. i dont know how familiar you are with bay area. everyone has something to say about property taxes until they become home owners themselves. just like college kids talk about 'fair taxes' until they have jobs themselves and see what a huge chunk goes away without any discernible benefits or accountablity by the state.
In your example, only the new lot would be taxed at the higher level. Our tax team and California precedent (you mention prop 13) advise that the existing parcel's tax burden would not change, just the new APN. So, in your example above: yes, the state and municipality would receive more income from the new unit, and yes the homeowner would earn a profit from splitting their lot, but no, their taxes would not dramatically increase.
It sounds like you think the state of California has mismanaged taxes, pensions, infrastructure, law enforcement, and education, but you are not willing to consider that it has possibly mismanaged anything relating to housing supply or building laws.
so...this home when split will have two units..each valued at 1.5 million. the state will get taxes at about $40k/year instead of the current 4-5k they seem to be paying for the past several decades.
if i were the owner and i have lived there for 30 years..it doesnt make sense from the pov of taxes. if i am the child who inherited the home, everything is essentially free. so there's that. and you make 20% profit.
but as the neighbour..as someone who pays tax for the services the city provides, as a renter in the neighbourhood who has to deal with higher water charges, crowded schools for my children, bad roads, inadequately staffed police stations/fire stations/post offices etc.(all public sector jobs that have unions and whose employees receive pensions till they die), it is a lose lose proposition.
any digression into the 'unfairness of prop 13' is something i am not going to engage in..i dont see why a 75 year old resident who has lived in the neighbourhood for 30-40 years have to pay for schools his children went to decades ago. we owe our senior citizens more than envy and jealousy over their hard earned money.
there are plenty of land in california that can be developed sustainably. and can house people comfortably. the problem is with sacramento that makes housing permits and fees and costs so high..and the historical unfunded pension liablities of public sectors that need more and more and more californians to be taxed to death every decade that is the problem.
and not taking into account that we are a desert and we are in a drought and we havent developed infrastructure or affordable utilities or sustainable public education or public transport. all while being taxed to death.
those numbers make NO sense to home owners. especially if they are in san jose. i dont know how familiar you are with bay area. everyone has something to say about property taxes until they become home owners themselves. just like college kids talk about 'fair taxes' until they have jobs themselves and see what a huge chunk goes away without any discernible benefits or accountablity by the state.