California proposes additional 25% tax for flippers

Dan H.Pro Member

Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes

There is a bill proposed by Chris Ward district 78 called the California Housing Speculation Act that proposes charging a 25% additional tax (an income surtax) on the profit (above the regular tax collected on the profit) if a home is sold within 3 years of purchase. The bill's author believes that the flippers are driving up the price of homes by purchasing them instead of the end buyer and selling them at a profit.

I am not a flipper, but I believe that flippers revitalize the properties while end buyers mostly do not. Without flippers, neighborhoods would get old. flippers and BRRRR investors play a large role in gentifying an area. It is my experience that neighborhoods like flippers and BRRRR investors. They typically know the property is run down and appreciate the improvement to the area that is accomplished by the rehab.

In addition, the rehab/revitalization of a property involves work and has risk. People deserve to be compensated for their work and any risk that they take.

If the politicians go after flippers what is to say they will not go after BRRRR investors next or even turnkey rental property providers? BRRRR investors rehab properties to extract money but it also leads to higher rents than if we rented the unit in its old, run-down state. In addition, the property is owned by an investor instead of owner-occupied buyer.

To me it is an attack on property investors. If they attack any form of property investor, recognize your form could be the next to be attacked.

It is my view the bill is short-sighted (similar to rent control rules) and proposed to provide the optics of trying to address the problem of rising property values and lack of affordability. I suspect Chris Ward has minimal understanding of Real Estate and is proposing this primarily to obtain votes. I doubt he really would desire the consequences of reduced flippers.

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Joe SplitrockPro Member

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Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes

I am not really convinced that this tax will even hurt flippers. One of two things will likely happen:

1. Flippers will demand lower acquisition price on distressed properties.

2. Flippers will demand higher sales price on rehabbed properties.

So if this doesn't hurt flippers, it hurts sellers or buyers. Just like increasing taxes on corporations doesn't hurt corporations. It hurts share holders or raises prices for customers. I think people who propose these taxes have good intent, but don't fundamentally understand how business or the economy works. They believe taxing a flipper will drive flippers out of business or make more houses available to owner occupied.

@Seth Young people can make a lot of money on fix and flip's in California, because of the high selling prices. You may rehab in middle America and pay $80K, then sell for $250K. In California you may pay $800K and sell for $1.5M. Even if the margin is lower in California, it is lower margin on a higher basis, so total profit dollars are much higher. Even with all the problems CA has, their housing market is exceptional.

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Account Closed
Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
4y
Quote from @Dan H.:

There is a bill proposed by Chris Ward district 78 called the California Housing Speculation Act that proposes charging a 25% additional tax (an income surtax) on the profit (above the regular tax collected on the profit) if a home is sold within 3 years of purchase. The bill's author believes that the flippers are driving up the price of homes by purchasing them instead of the end buyer and selling them at a profit.

I am not a flipper, but I believe that flippers revitalize the properties while end buyers mostly do not. Without flippers, neighborhoods would get old. flippers and BRRRR investors play a large role in gentifying an area. It is my experience that neighborhoods like flippers and BRRRR investors. They typically know the property is run down and appreciate the improvement to the area that is accomplished by the rehab.

In addition, the rehab/revitalization of a property involves work and has risk. People deserve to be compensated for their work and any risk that they take.

If the politicians go after flippers what is to say they will not go after BRRRR investors next or even turnkey rental property providers? BRRRR investors rehab properties to extract money but it also leads to higher rents than if we rented the unit in its old, run-down state. In addition, the property is owned by an investor instead of owner-occupied buyer.

To me it is an attack on property investors. If they attack any form of property investor, recognize your form could be the next to be attacked.

It is my view the bill is short-sighted (similar to rent control rules) and proposed to provide the optics of trying to address the problem of rising property values and lack of affordability. I suspect Chris Ward has minimal understanding of Real Estate and is proposing this primarily to obtain votes. I doubt he really would desire the consequences of reduced flippers.
Nasty! I'd have to sell my exclusive membership to the club in Laguna Beach and move (except I don't belong to an exclusive club, but your get the sentiment.) I'd still move out of state. Yikes!
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Seth Young
Specialist · Southlake, TX · Member since 2021 · 213 posts · 157 votes
4y
That is horrible! It will make it very hard for people to make money with fix and flips in California.
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Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
4y
I am not really convinced that this tax will even hurt flippers. One of two things will likely happen:

1. Flippers will demand lower acquisition price on distressed properties.

2. Flippers will demand higher sales price on rehabbed properties.

So if this doesn't hurt flippers, it hurts sellers or buyers. Just like increasing taxes on corporations doesn't hurt corporations. It hurts share holders or raises prices for customers. I think people who propose these taxes have good intent, but don't fundamentally understand how business or the economy works. They believe taxing a flipper will drive flippers out of business or make more houses available to owner occupied.

@Seth Young people can make a lot of money on fix and flip's in California, because of the high selling prices. You may rehab in middle America and pay $80K, then sell for $250K. In California you may pay $800K and sell for $1.5M. Even if the margin is lower in California, it is lower margin on a higher basis, so total profit dollars are much higher. Even with all the problems CA has, their housing market is exceptional.
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Dan H.Pro Member
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Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
4y
I suspect you are correct on what flippers will want to do, but just because they desire to do it does not mean they will be able to do it.
There are various levels of distressed sellers. The most desperate will take what the market can provide. Typical home buyers cannot meet the needs of the most desperate (quick close, all cash, properties that often do not qualify for traditional financing). At the other extreme are slightly distressed owners that would sell at a price that could allow a flipper to make a small profit without the additional tax but would not be willing to sell for substantially less. For substantially less they will do what is necessary to be able to market it on the MLS.
On the sell side flippers always want to get as much for the property as they can. Flipped homes are a small percentage of the properties in most markets. The flippers do not determine market price; the market price determines what the flippers can sell a property for.
I think some flippers will continue to find properties that they can make a decent profit on even with the tax penalty. However, I do expect this law if enacted will reduce the number of flips.
This bill does not recognize the value that flippers bring to a market. They can revitalize areas. In general, flippers are welcomed into areas as the neighborhood wants the typical flip home to be revitalized to improve the area. To propose to penalize flippers is not recognizing the value that flippers provide.
I am not a flipper, but I do not desire propositions that penalize RE investors. They attack one small group of REI investors at a time to minimize opposition. This is a common tactic to attack a subset of the group, then attack the next subset of the group. At the end, they obtain a goal that if they had tried to achieve in one large attempt would have a lot of opposition and would have little chance of success.
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Jeff S.
Lender · Los Angeles, CA · Member since 2009 · 1k+ posts · 2k+ votes
4y
Here's some background.

CAR recently reported that 51% of all home purchased in CA were purchased by investors. The national average is 19%. As a result, the state legislature is concerned that average homeowners are getting priced out of the market. In turn, they proposed AB 1771, the ‘California Housing Speculation Act,” which is intended to increase affordable housing.

This is not just an anti-flipping measure. It’s much broader. AB 1771 applies to anyone or any entity who owns residential property in California with exception of active-duty military personnel and anyone deceased whose property is subsequently sold.

The bill applies to anyone who sells a property within 7 years, not 3. The maximum capital gains tax is 25% in the first 3 years and then it gradually drops to 0% after year 7. Funny how most people move within 7 years.

With very little exception (first-time homebuyers and affordable housing), if you own any residential property in California, and that means SFR thru Multifamily, even your primary residence, this new tax will apply to you.

The claim is that the money from AB 1771 will mitigate the housing shortage in CA and that the money will go into a proposed “Speculation Recapture Reinvestment Fund.” Of course, only 30% of the fund will be allocated for affordable housing, and the bill is not specific what that even means. 10% will go to administration, and the remainder will go to public transportation and school districts. These have nothing to do with affordable housing.

In sum, this is yet another money grab by the CA legislature who can’t stand that anyone makes a profit from the sale of their property.
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Joe SplitrockPro Member
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Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
4y
Quote from @Dan H.:

I suspect you are correct on what flippers will want to do, but just because they desire to do it does not mean they will be able to do it.
There are various levels of distressed sellers. The most desperate will take what the market can provide. Typical home buyers cannot meet the needs of the most desperate (quick close, all cash, properties that often do not qualify for traditional financing). At the other extreme are slightly distressed owners that would sell at a price that could allow a flipper to make a small profit without the additional tax but would not be willing to sell for substantially less. For substantially less they will do what is necessary to be able to market it on the MLS.
On the sell side flippers always want to get as much for the property as they can. Flipped homes are a small percentage of the properties in most markets. The flippers do not determine market price; the market price determines what the flippers can sell a property for.
I think some flippers will continue to find properties that they can make a decent profit on even with the tax penalty. However, I do expect this law if enacted will reduce the number of flips.
This bill does not recognize the value that flippers bring to a market. They can revitalize areas. In general, flippers are welcomed into areas as the neighborhood wants the typical flip home to be revitalized to improve the area. To propose to penalize flippers is not recognizing the value that flippers provide.
I am not a flipper, but I do not desire propositions that penalize RE investors. They attack one small group of REI investors at a time to minimize opposition. This is a common tactic to attack a subset of the group, then attack the next subset of the group. At the end, they obtain a goal that if they had tried to achieve in one large attempt would have a lot of opposition and would have little chance of success.

It is tough because on the flip side (no pun intended), flippers also drain the market of affordable housing. The areas they revitalize are made more expensive, which prices people out of the previously affordable neighborhoods. The same thing happens with BRRRR and tenants getting displaced. The dirty little secret of "affordable housing" is that the housing is affordable because it is old, run down and out dated.
I am all for the free market and I don't support this tax. I was just trying to point out that taxes often just increase costs for buyers. I don't like any attack on business and California does nothing but attack business. Yet they turn a blind eye to property tax freezes, which penalize new buyers. There is far too much moral superiority by people sitting in houses worth $2M and saying that flippers are the problem. They are happy to cash out on the higher values when they sell.
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Dan H.Pro Member
OP
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
4y
Quote from @Joe Splitrock:

Quote from @Dan H.:

I suspect you are correct on what flippers will want to do, but just because they desire to do it does not mean they will be able to do it.
There are various levels of distressed sellers. The most desperate will take what the market can provide. Typical home buyers cannot meet the needs of the most desperate (quick close, all cash, properties that often do not qualify for traditional financing). At the other extreme are slightly distressed owners that would sell at a price that could allow a flipper to make a small profit without the additional tax but would not be willing to sell for substantially less. For substantially less they will do what is necessary to be able to market it on the MLS.
On the sell side flippers always want to get as much for the property as they can. Flipped homes are a small percentage of the properties in most markets. The flippers do not determine market price; the market price determines what the flippers can sell a property for.
I think some flippers will continue to find properties that they can make a decent profit on even with the tax penalty. However, I do expect this law if enacted will reduce the number of flips.
This bill does not recognize the value that flippers bring to a market. They can revitalize areas. In general, flippers are welcomed into areas as the neighborhood wants the typical flip home to be revitalized to improve the area. To propose to penalize flippers is not recognizing the value that flippers provide.
I am not a flipper, but I do not desire propositions that penalize RE investors. They attack one small group of REI investors at a time to minimize opposition. This is a common tactic to attack a subset of the group, then attack the next subset of the group. At the end, they obtain a goal that if they had tried to achieve in one large attempt would have a lot of opposition and would have little chance of success.

It is tough because on the flip side (no pun intended), flippers also drain the market of affordable housing. The areas they revitalize are made more expensive, which prices people out of the previously affordable neighborhoods. The same thing happens with BRRRR and tenants getting displaced. The dirty little secret of "affordable housing" is that the housing is affordable because it is old, run down and out dated.
I am all for the free market and I don't support this tax. I was just trying to point out that taxes often just increase costs for buyers. I don't like any attack on business and California does nothing but attack business. Yet they turn a blind eye to property tax freezes, which penalize new buyers. There is far too much moral superiority by people sitting in houses worth $2M and saying that flippers are the problem. They are happy to cash out on the higher values when they sell.

The property tax is a near freeze at 2% when homes have appreciated at a far faster rate. I have benefitted significantly from this freeze. I have mixed feelings. Prior to prop 13 that set max property tax at 2% there were people taxed out of their home. Last year market went up over 20% in most San Diego zip codes. Raising property taxes at market rates would cause many people hardships.
So what if they prop 13 did not apply to investment properties or commercial properties? The increased costs would simply be passed to the consumer as typically happens eventually when a cost or risk increases.
I therefore am fine with the prop 13 rules and it is not primarily because I have benefitted from it. the new buyers will soon be established home owners. People who choose to move up end up with no prop tax discount. Most people move in less than 7 years. They may be giving up some prop tax discount by moving. Those who stay forever get the big discounts, but those are a minority of owners.

>The same thing happens with BRRRR and tenants getting displaced

I am proud to say I have done quite a few BRRRR and have never displace a good tenant. We have 3 units currently in need of rehab with one being so below market it is near charity. It would be financially smart to do no-fault eviction, but we have not. We have worked out transferring tenant into improved unit at below market price.
>The dirty little secret of "affordable housing" is that the housing is affordable because it is old, run down and out dated.
I will add that they are often in the worse areas because the areas being regentified are going up in price in the progress of regentifying. typically cheap housing is in cheap, run down areas that could benefit from some flippers starting the process of improving the area.

If this bill becomes law, I expect the worse areas to get worse. These are the areas most in need of flippers.

Flippers benefit an area and deserve to be compensated for their effort/risk. The competition in most of CA is extreme. It is not easy to make good money on these flips with the existing competition. Flippers deserve their profit and anyone can try to be a flipper. If it was such easy money everyone would be succeeding at flipping and that is not the case.

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Will BarnardPro Member
Moderator
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
4y
I agree with all above, this is yet another moron politician bringing stupid ideas to solve a problem that cannot be solved by this proposed bill. Jeff S above posted almost verbatim from this article which I think alo should read (and by the way, if somehow this passes, those in other states should also be concerned that they could be next (OR, WA, NV, AZ, NY, FL, etc to name a few)

https://eastcountytoday.net/as...

As others mentioned above, flippers buy old dated homes in typically run down condition and even add on to said properties via additions. These improvements make the home more valuable and once sold to the end user, generate huge additional property tax dollars for CA. This moron apparently is not aware of this fact. Making an old ugly home into a nice beautiful one brings property values for all in the area up. Increased property values (contrary to politicians views in CA) are a good thing, not a bad thing and I agree that if this bill is passed, the poor and lower middle class areas will be hurt even more by this bill, completely in reverse of what the bill claims to help. Affordable housing = education to all to get decent jobs to afford the house! Feed a man a fish, feed him for a day, hand him a fishing pole and teach him to fish, feed him for life. The handouts are getting to be too much and hurt more than help those they are intended to help. This is the biggest problem with politicians, they bring their grandioso ideas to solve a problem and end up making it worse because they do not get info, data and feedback from those in the trenches. Case in point, the LA rule to mitigate the water shortage by making us developers add rain barrels to all new construction homes and those where roofs are added or torn down and redone. This only adds to the cost of the house and does nothing to save water, in fact, it wastes more. Had the politician who made this law asked anyone in the know, they would have realized it was a foolish idea. This AB 1771 is no different and if passed, will hurt millions in CA including owner occupants who will now be stuck in their homes with no way to upgrade inside of 7 years without paying this ridiculous tax in a state that already taxes its citizens more than any other state in the union! Great job morons!! (I'll tell you how I really feel later, LOL)
Podcast Guest on Show #130
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Bruce D. Kowal
Metro NY + New Bedford · Member since 2022 · 294 posts · 216 votes
4y
How does this increase the supply of "affordable" housing? It's just another tax.
1 Reply
Jeff S.
Lender · Los Angeles, CA · Member since 2009 · 1k+ posts · 2k+ votes
4y
If you live out of state and don’t think this bill could apply to you, you’re wrong. California is often the proving ground other states use to justify unpopular laws. If this measure passes, every state will chomp at the bit for the extra revenue. You are not immune.

The American Association of Private Lenders has a great website dedicated to opposing AB 1771 HERE. There are several explanatory videos, sample letter templates you can fill out and mail, as well as an online petition which takes almost no time. They’ve made it as easy as possible to educate yourself and to express your opposition.

If nothing else, you can go HERE and voice your opposition directly to the sponsor, San Diego Assembly Member Ward.

You do not have to be a constituent of Assembly Member Ward, nor even a CA resident to oppose this measure and I encourage you to do so.
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Janelle K. Eagle
Real Estate Agent · Central Coast, CA · Member since 2022 · 110 posts · 58 votes
4y
As a CA flipper who just had 25% and 10% state tax taken out of a $250K profit- an additional tax at this scale will only force us to switch our strategy from flipping to buying and holding. It won't keep investors like me out of the market.
There is an extreme lack of inventory in California. If I'm forced to keep my properties as rentals for far longer than I would otherwise, that will not help wanna-be-homeowners get into the market as buyers any sooner. It will only force there to be less and less inventory, making it even less affordable to buy.
And for homebuyers that don't have the appetite (or aptitude!) to do renovations on a property that is run down or in need of repair, there will simply be no turn-key clean options. The best they can hope for is a landlord who renovated a property 7 years ago and kept it "nice" while it was a rental.
That's a shame.
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Account Closed
Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
4y
Quote from @Jeff S.:

If you live out of state and don’t think this bill could apply to you, you’re wrong. California is often the proving ground other states use to justify unpopular laws. If this measure passes, every state will chomp at the bit for the extra revenue. You are not immune.

The American Association of Private Lenders has a great website dedicated to opposing AB 1771 HERE. There are several explanatory videos, sample letter templates you can fill out and mail, as well as an online petition which takes almost no time. They’ve made it as easy as possible to educate yourself and to express your opposition.

If nothing else, you can go HERE and voice your opposition directly to the sponsor, San Diego Assembly Member Ward.

You do not have to be a constituent of Assembly Member Ward, nor even a CA resident to oppose this measure and I encourage you to do so.
I don't know what the concern is, those politicians were elected, re-elected, re-elected again over and over. They make the laws & raise the taxes. Seems the people of Califonia love to feel the pain.

"The definition of insanity is doing the same thing over and over again and expecting different results"

1 Reply
Janelle K. Eagle
Real Estate Agent · Central Coast, CA · Member since 2022 · 110 posts · 58 votes
4y
I don't know what the concern is, those politicians were elected, re-elected, re-elected again over and over. They make the laws & raise the taxes. Seems the people of Califonia love to feel the pain.

"The definition of insanity is doing the same thing over and over again and expecting different results"

————

correction - Chris Ward is a *first term* representative who has not been re-elected nor elected again over and over. He’s trying to make a name for himself in San Diego, where the market has truly gotten insane. He’s doing it the wrong way and just because he introduced it doesn’t mean he has broad support or that it will pass.

2 Reply
Dan H.Pro Member
OP
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
4y
Quote from @Account Closed:

Quote from @Jeff S.:

If you live out of state and don’t think this bill could apply to you, you’re wrong. California is often the proving ground other states use to justify unpopular laws. If this measure passes, every state will chomp at the bit for the extra revenue. You are not immune.

The American Association of Private Lenders has a great website dedicated to opposing AB 1771 HERE. There are several explanatory videos, sample letter templates you can fill out and mail, as well as an online petition which takes almost no time. They’ve made it as easy as possible to educate yourself and to express your opposition.

If nothing else, you can go HERE and voice your opposition directly to the sponsor, San Diego Assembly Member Ward.

You do not have to be a constituent of Assembly Member Ward, nor even a CA resident to oppose this measure and I encourage you to do so.
I don't know what the concern is, those politicians were elected, re-elected, re-elected again over and over. They make the laws & raise the taxes. Seems the people of Califonia love to feel the pain.

"The definition of insanity is doing the same thing over and over again and expecting different results"

I do not know the source of your picture, but it seems to have the top income tax rate wrong (too high). Do you know what income it takes to pay the top rate in CA? Do you know the average state income tax paid in CA? How about the median state income tax paid in CA? CA has one of the lowest median state income taxes in the nation. I expect you did not know this.
I suspect you heard somewhere the income tax was high in CA, but do not really understand who pays the top rate and on what income or what most people pay in state income taxes.
A lot of mis-information in that post.
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Will BarnardPro Member
Moderator
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
4y
Quote from @Bruce D. Kowal:

How does this increase the supply of "affordable" housing? It's just another tax.

It doesn't, in fact, it will hurt it even more! If investor flippers stop doing flipping because of the tax, run down and outdated homes will sit longer and longer, less inventory will be for sale since even homeowners will need to sit on their homes for 7 years to avoid the taxation. Please step up and vote against this bill!
Podcast Guest on Show #130
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Account Closed

Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes

Quote from @Dan H.:

Quote from @Account Closed:

Quote from @Jeff S.:

If you live out of state and don’t think this bill could apply to you, you’re wrong. California is often the proving ground other states use to justify unpopular laws. If this measure passes, every state will chomp at the bit for the extra revenue. You are not immune.

The American Association of Private Lenders has a great website dedicated to opposing AB 1771 HERE. There are several explanatory videos, sample letter templates you can fill out and mail, as well as an online petition which takes almost no time. They’ve made it as easy as possible to educate yourself and to express your opposition.

If nothing else, you can go HERE and voice your opposition directly to the sponsor, San Diego Assembly Member Ward.

You do not have to be a constituent of Assembly Member Ward, nor even a CA resident to oppose this measure and I encourage you to do so.

I don't know what the concern is, those politicians were elected, re-elected, re-elected again over and over. They make the laws & raise the taxes. Seems the people of Califonia love to feel the pain.

"The definition of insanity is doing the same thing over and over again and expecting different results"

I do not know the source of your picture, but it seems to have the top income tax rate wrong (too high). Do you know what income it takes to pay the top rate in CA? Do you know the average state income tax paid in CA? How about the median state income tax paid in CA? CA has one of the lowest median state income taxes in the nation. I expect you did not know this.

I suspect you heard somewhere the income tax was high in CA, but do not really understand who pays the top rate and on what income or what most people pay in state income taxes.

A lot of mis-information in that post.

Your comment: "CA has one of the lowest median state income taxes in the nation."

I'd love to see your source. That is not the imformation the rest of us out here in "realsville" are hearing. Rumor has it an awful lot of people are leaving California because taxes & living in general are just to dang high.

Tax-Rates.org - Income Tax Rates By State

https://www.tax-rates.org/taxt...

State Name	Lowest Tax Bracket	Highest Tax Bracket
Alabama	2%	5%
Alaska	0%	0%
Arizona	2.59%	4.5%
Arkansas	2%	6.6%
California	1%	13.3%
Colorado	4.63%	4.63%
Connecticut	3%	6.99%
Delaware	2.2%	6.6%
District of Columbia	4%	8.95%
Florida	0%	0%
Georgia	1%	5.75%
Hawaii	1.4%	11%
Idaho	1.12%	6.92%
Illinois	4.95%	4.95%
Indiana	3.23%	3.23%
Iowa	0.33%	8.53%
Kansas	3.1%	5.7%
Kentucky	5%	5%
Louisiana	2%	6%
Maine	5.8%	7.15%
Maryland	2%	5.75%
Massachusetts	5%	5%
Michigan	4.25%	4.25%
Minnesota	5.35%	9.85%
Mississippi	3%	5%
Missouri	1.5%	5.4%
Montana	1%	6.9%
Nebraska	2.46%	6.84%
Nevada	0%	0%
New Hampshire	5%	5%
New Jersey	1.4%	10.75%
New Mexico	1.7%	4.9%
New York	4%	8.82%
North Carolina	5.25%	5.25%
North Dakota	1.1%	2.9%
Ohio	2.85%	4.8%
Oklahoma	0.5%	5%
Oregon	5%	9.9%
Pennsylvania	3.07%	3.07%
Rhode Island	3.75%	5.99%
South Carolina	0%	7%
South Dakota	0%	0%
Tennessee	1%	1%
Texas	0%	0%
Utah	4.95%	4.95%
Vermont	3.35%	8.75%
Virginia	2%	5.75%
Washington	0%	0%
West Virginia	3%	6.5%
Wisconsin	4%	7.65%
Wyoming	0%	0%

0 Reply

Account Closed
Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
4y
Quote from @Janelle K. Eagle:

I don't know what the concern is, those politicians were elected, re-elected, re-elected again over and over. They make the laws & raise the taxes. Seems the people of Califonia love to feel the pain.

"The definition of insanity is doing the same thing over and over again and expecting different results"

————

correction - Chris Ward is a *first term* representative who has not been re-elected nor elected again over and over. He’s trying to make a name for himself in San Diego, where the market has truly gotten insane. He’s doing it the wrong way and just because he introduced it doesn’t mean he has broad support or that it will pass.

Hmmm, are you saying that your taxes aren't too high? Maybe so for yourself. However, the Revolutionary war was faught over a 2% TOTAL tax.
And by the way, one exception (Chris Ward) doesn't make the rule. Those that would vote on the bill and perhaps pass it never met a tax increase they didn't like, and their voting records show that. They've been around a long, long time. But, facts don't really matter when they come to taxes.

Or maybe you like pipe dreams and don't mind being soaked of your toil.

"In 2008, when voters approved nearly $10 billion of state bond funding, they were promised bullet trains traveling at more than 200 mph from San Diego to San Francisco and Sacramento at a cost of $45 billion. By last year, the cost estimate had jumped to $83 billion and perhaps as high as $100 billion, but just for a system from San Francisco to Anaheim."

1 Reply
Tony Kim
Rental Property Investor · Los Angeles · Member since 2018 · 844 posts · 1k+ votes
4y
Quote from @Account Closed:

Quote from @Janelle K. Eagle:

I don't know what the concern is, those politicians were elected, re-elected, re-elected again over and over. They make the laws & raise the taxes. Seems the people of Califonia love to feel the pain.

"The definition of insanity is doing the same thing over and over again and expecting different results"

————

correction - Chris Ward is a *first term* representative who has not been re-elected nor elected again over and over. He’s trying to make a name for himself in San Diego, where the market has truly gotten insane. He’s doing it the wrong way and just because he introduced it doesn’t mean he has broad support or that it will pass.

Hmmm, are you saying that your taxes aren't too high? Maybe so for yourself. However, the Revolutionary war was faught over a 2% TOTAL tax.
And by the way, one exception (Chris Ward) doesn't make the rule. Those that would vote on the bill and perhaps pass it never met a tax increase they didn't like, and their voting records show that. They've been around a long, long time. But, facts don't really matter when they come to taxes.

Or maybe you like pipe dreams and don't mind being soaked of your toil.

"In 2008, when voters approved nearly $10 billion of state bond funding, they were promised bullet trains traveling at more than 200 mph from San Diego to San Francisco and Sacramento at a cost of $45 billion. By last year, the cost estimate had jumped to $83 billion and perhaps as high as $100 billion, but just for a system from San Francisco to Anaheim."

https://www.kiplinger.com/taxes/state-tax/601612/most-tax-friendly-states-for-middle-class-families-2021

I'm surprised to read the above also. Boy, do you look stupid after that long, rambling post about the revolutionary war and the bullet train project, hehe. 🤣🤣

As far as I'm concerned, I'm OK with our misguided politicians doing their thing since I no longer plan to purchase any more directly owned rental properties. It's all private equity funds with just a few investment companies I trust and public REITS for me now. These idiotic politicians trying to make their campaign speaking points and enact these ridiculous laws will only tighten inventory. Like most laws that are for "show", this will only drive up prices here in CA. I'm fine with letting these fools drive up the MV's of what I got right now.
1 Reply

Dan H.Pro Member

Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes

Quote from @Account Closed:

Quote from @Dan H.:

Quote from @Account Closed:

Quote from @Jeff S.:

If nothing else, you can go HERE and voice your opposition directly to the sponsor, San Diego Assembly Member Ward.

You do not have to be a constituent of Assembly Member Ward, nor even a CA resident to oppose this measure and I encourage you to do so.

I suspect you heard somewhere the income tax was high in CA, but do not really understand who pays the top rate and on what income or what most people pay in state income taxes.

A lot of mis-information in that post.

Your comment: "CA has one of the lowest median state income taxes in the nation."

Tax-Rates.org - Income Tax Rates By State

https://www.tax-rates.org/taxt...

State Name	Lowest Tax Bracket	Highest Tax Bracket
Alabama	2%	5%
Alaska	0%	0%
Arizona	2.59%	4.5%
Arkansas	2%	6.6%
California	1%	13.3%
Colorado	4.63%	4.63%
Connecticut	3%	6.99%
Delaware	2.2%	6.6%
District of Columbia	4%	8.95%
Florida	0%	0%
Georgia	1%	5.75%
Hawaii	1.4%	11%
Idaho	1.12%	6.92%
Illinois	4.95%	4.95%
Indiana	3.23%	3.23%
Iowa	0.33%	8.53%
Kansas	3.1%	5.7%
Kentucky	5%	5%
Louisiana	2%	6%
Maine	5.8%	7.15%
Maryland	2%	5.75%
Massachusetts	5%	5%
Michigan	4.25%	4.25%
Minnesota	5.35%	9.85%
Mississippi	3%	5%
Missouri	1.5%	5.4%
Montana	1%	6.9%
Nebraska	2.46%	6.84%
Nevada	0%	0%
New Hampshire	5%	5%
New Jersey	1.4%	10.75%
New Mexico	1.7%	4.9%
New York	4%	8.82%
North Carolina	5.25%	5.25%
North Dakota	1.1%	2.9%
Ohio	2.85%	4.8%
Oklahoma	0.5%	5%
Oregon	5%	9.9%
Pennsylvania	3.07%	3.07%
Rhode Island	3.75%	5.99%
South Carolina	0%	7%
South Dakota	0%	0%
Tennessee	1%	1%
Texas	0%	0%
Utah	4.95%	4.95%
Vermont	3.35%	8.75%
Virginia	2%	5.75%
Washington	0%	0%
West Virginia	3%	6.5%
Wisconsin	4%	7.65%
Wyoming	0%	0%

Nearly 40% pay 0 income tax in the state - you can find this easily via Google search. Finding a source that states the median income tax is tough to find but I have seen claims that it is less than 2% which seems possible if 40% are paying zero income tax. The median would then be the lowest 10% of all tax payers that pay taxes.

Kiplinger claims for a middle class family California’s income tax is 2nd lowest for states that have an income tax. https://www.kiplinger.com/taxe...

Now for the 13.3% state income tax rate... This rate starts for those making over $1m ($1,25m if filing married) and is only applied to the income that exceeds $1m. It is commonly referenced to show California’s high income tax, but many/most who reference it do not know that the rate only applies to the income in excess of $1m. Most people with an income over $1m have various write-off that reduces the taxable income. In California millionaires are a dime a dozen, but those that earn more than $1m/year in taxable income is a very small percentage of income earners.

0 Reply

Janelle K. Eagle
Real Estate Agent · Central Coast, CA · Member since 2022 · 110 posts · 58 votes
4y
Quote from @Account Closed:

Quote from @Janelle K. Eagle:

I don't know what the concern is, those politicians were elected, re-elected, re-elected again over and over. They make the laws & raise the taxes. Seems the people of Califonia love to feel the pain.

"The definition of insanity is doing the same thing over and over again and expecting different results"

————

correction - Chris Ward is a *first term* representative who has not been re-elected nor elected again over and over. He’s trying to make a name for himself in San Diego, where the market has truly gotten insane. He’s doing it the wrong way and just because he introduced it doesn’t mean he has broad support or that it will pass.

Hmmm, are you saying that your taxes aren't too high? Maybe so for yourself. However, the Revolutionary war was faught over a 2% TOTAL tax.
And by the way, one exception (Chris Ward) doesn't make the rule. Those that would vote on the bill and perhaps pass it never met a tax increase they didn't like, and their voting records show that. They've been around a long, long time. But, facts don't really matter when they come to taxes.

Or maybe you like pipe dreams and don't mind being soaked of your toil.

"In 2008, when voters approved nearly $10 billion of state bond funding, they were promised bullet trains traveling at more than 200 mph from San Diego to San Francisco and Sacramento at a cost of $45 billion. By last year, the cost estimate had jumped to $83 billion and perhaps as high as $100 billion, but just for a system from San Francisco to Anaheim."

No, what I wrote is what I said. California is known for its diversity- including diversity of opinion. One freshman representative does not a “movement” make. Nor a revolution.
0 Reply
Harish V.
Investor · Fremont, CA · Member since 2015 · 209 posts · 124 votes
4y
Quote from @Janelle K. Eagle:

Quote from @Account Closed:

Quote from @Janelle K. Eagle:

I don't know what the concern is, those politicians were elected, re-elected, re-elected again over and over. They make the laws & raise the taxes. Seems the people of Califonia love to feel the pain.

"The definition of insanity is doing the same thing over and over again and expecting different results"

————

correction - Chris Ward is a *first term* representative who has not been re-elected nor elected again over and over. He’s trying to make a name for himself in San Diego, where the market has truly gotten insane. He’s doing it the wrong way and just because he introduced it doesn’t mean he has broad support or that it will pass.

Hmmm, are you saying that your taxes aren't too high? Maybe so for yourself. However, the Revolutionary war was faught over a 2% TOTAL tax.
And by the way, one exception (Chris Ward) doesn't make the rule. Those that would vote on the bill and perhaps pass it never met a tax increase they didn't like, and their voting records show that. They've been around a long, long time. But, facts don't really matter when they come to taxes.

Or maybe you like pipe dreams and don't mind being soaked of your toil.

"In 2008, when voters approved nearly $10 billion of state bond funding, they were promised bullet trains traveling at more than 200 mph from San Diego to San Francisco and Sacramento at a cost of $45 billion. By last year, the cost estimate had jumped to $83 billion and perhaps as high as $100 billion, but just for a system from San Francisco to Anaheim."

No, what I wrote is what I said. California is known for its diversity- including diversity of opinion. One freshman representative does not a “movement” make. Nor a revolution.

Boy oh boy. That Kiplinger's writer is living pipe dream. House prices 300k. Incomes 70k/household in california.
0 Reply
Account Closed
Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
4y
Quote from @Dan H.:

Quote from @Account Closed:

Quote from @Dan H.:

Quote from @Account Closed:

Quote from @Jeff S.:

Your comment: "CA has one of the lowest median state income taxes in the nation."

I'd love to see your source. That is not the imformation the rest of us out here in "realsville" are hearing. Rumor has it an awful lot of people are leaving California because taxes & living in general are just to dang high.

Nearly 40% pay 0 income tax in the state - you can find this easily via Google search. Finding a source that states the median income tax is tough to find but I have seen claims that it is less than 2% which seems possible if 40% are paying zero income tax. The median would then be the lowest 10% of all tax payers that pay taxes.

Kiplinger claims for a middle class family California’s income tax is 2nd lowest for states that have an income tax. https://www.kiplinger.com/taxe...

Now for the 13.3% state income tax rate... This rate starts for those making over $1m ($1,25m if filing married) and is only applied to the income that exceeds $1m. It is commonly referenced to show California’s high income tax, but many/most who reference it do not know that the rate only applies to the income in excess of $1m. Most people with an income over $1m have various write-off that reduces the taxable income. In California millionaires are a dime a dozen, but those that earn more than $1m/year in taxable income is a very small percentage of income earners.

The article you link to says: "For a $300,000 home in California, the statewide estimated property tax is . . "

My response: "$300,000 houses! Honey grab the dog & cat, we be movin' to California!!!"
By the way, before I fill up the tank and load the car, where exactly ARE these $300,000 houses in California?

1 Reply
Account Closed
Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
4y
Quote from @Tony Kim:

Quote from @Account Closed:

Quote from @Janelle K. Eagle:

I don't know what the concern is, those politicians were elected, re-elected, re-elected again over and over. They make the laws & raise the taxes. Seems the people of Califonia love to feel the pain.

"The definition of insanity is doing the same thing over and over again and expecting different results"

————

https://www.kiplinger.com/taxes/state-tax/601612/most-tax-friendly-states-for-middle-class-families-2021

As far as I'm concerned, I'm OK with our misguided politicians doing their thing since I no longer plan to purchase any more directly owned rental properties. It's all private equity funds with just a few investment companies I trust and public REITS for me now. These idiotic politicians trying to make their campaign speaking points and enact these ridiculous laws will only tighten inventory. Like most laws that are for "show", this will only drive up prices here in CA. I'm fine with letting these fools drive up the MV's of what I got right now.

Your logic is solid. Smart money knows where to go when the status quo changes.
The only drawback is that some day, maybe not too soon, but some day they will repeal/remove/work around Prop 13 and property taxes will boom to the detriment of all involved.

0 Reply
Dan H.Pro Member
OP
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
4y
Quote from @Account Closed:

Quote from @Dan H.:

Quote from @Account Closed:

Quote from @Dan H.:

Quote from @Account Closed:

Quote from @Jeff S.:

Your comment: "CA has one of the lowest median state income taxes in the nation."

I'd love to see your source. That is not the imformation the rest of us out here in "realsville" are hearing. Rumor has it an awful lot of people are leaving California because taxes & living in general are just to dang high.

Nearly 40% pay 0 income tax in the state - you can find this easily via Google search. Finding a source that states the median income tax is tough to find but I have seen claims that it is less than 2% which seems possible if 40% are paying zero income tax. The median would then be the lowest 10% of all tax payers that pay taxes.

Kiplinger claims for a middle class family California’s income tax is 2nd lowest for states that have an income tax. https://www.kiplinger.com/taxe...

Now for the 13.3% state income tax rate... This rate starts for those making over $1m ($1,25m if filing married) and is only applied to the income that exceeds $1m. It is commonly referenced to show California’s high income tax, but many/most who reference it do not know that the rate only applies to the income in excess of $1m. Most people with an income over $1m have various write-off that reduces the taxable income. In California millionaires are a dime a dozen, but those that earn more than $1m/year in taxable income is a very small percentage of income earners.

The article you link to says: "For a $300,000 home in California, the statewide estimated property tax is . . "

My response: "$300,000 houses! Honey grab the dog & cat, we be movin' to California!!!"
By the way, before I fill up the tank and load the car, where exactly ARE these $300,000 houses in California?

Imperial county has average home price of $300k. Fresno county is above $300k, but you can still find many properties at $300k. California is a big state with a lot of counties. San Francisco, San Jose, Los Angeles, Orange County, San Diego may get most of the tourists, revenue, publicity, but they make up a fairly small percentage of the state.
0 Reply
Will BarnardPro Member
Moderator
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
4y

Well this is not accurate at all. Taking the counties you listed (and correcting San Jose to "Santa Clara" as there is no such thing as San Jose county), and adding in Alameda County which is so close to San Francisco as well as adding Sacramento county (our state capital should be included in this list), you get 23M in population of the total 39M in the state, therefore, these counties comprise of almost 60% of the entire state. Not a "fairly small" % at all. I do agree that your argument to the other poster claiming that CA has a lower state income tax than the median in the country was certainly wrong. CA has the highest by far at 13.3% with only Hawaii and New Jersey having double digit rates. Many CA residents are or have moved on due to the high taxes and frustrating political environment. That said, the population is not at all in danger of losing out as the total net only lost a tiny % for the first time recently and was dubbed "the great exodus" by the media. Those of us smart enough to use a calculator can determine that the media was just blowing smoke for their own self interests, nothing more.
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