Originally Posted by S Folinsky

Every state is different. Here in California, we have proposition 13 which was passed in 1978. Property tax is based upon assessed valuation which is market value. However, property tax is capped at 1% [plus bonded indebtedness] and assessed value cannot increase more than 2% per year. The Prop 13 rate will be the base for allowing reductions of tax when market value goes down. The baseline is reset upon sale

So, let say you have two houses in LA [3 bedroom, 2 bath, 3000 sq ft] in a nice neighborhood next to each other -- both are worth $2 million. House A was purchased in 1994 for $300K. So the property taxes started at $3000 per year and with the 2% annual increase are now at about $6000 per year. House B was purchased in 2009 for $2 million -- the tax will be about $20,000 per year.

Lets say House B was purchased before the recent market crash in 2006 for $2,750,000. House B can obtain temporary reductions in assessed valuation, but house A cannot. This is true even though both houses lost $750,000. So House A would have to decrease a lot [and I think there is a "recapture" of past Prop 13 benefits, but I'm not sure].

So, if the home owner has owned a house for 25 years, raised a family, and the kids have moved out, it can be an expensive proposition to move to a smaller house. [There are some situations based upon age and geography where one carry over the Prop 13 valuation to the new home].

On top of that -- the Federal personal residence basis carry over was eliminated a few years back. So let's say the owner of House A above purchased their first house for $46,000, sold it for $103,000, bought a house for $140,000 which sold for $200,000 and bought current house for $300,000, the taxable basis for current home will be $183,000. There will be a fairly hefty capital gains tax due upon sale of that house.

[If homeowner A dies before the end of 2010, the basis will adjust with no taxes, the prop 13 will carry over to a descendant who takes possession, and there will be no Federal Estate Tax. California has a "pick-up" tax for when there is a Federal Estate Tax -- not applicable this year].

Originally Posted by Bob

That's the one nice thing about where we live, they pick up recycling every fortnight but you don't have to sort it out, just stick it in a box or bag and it'll get picked up.

Also nice the town actually picks the rubbish up. A lot of the towns we've been checking out don't do rubbish collection, so it's either the town dump or have private collection at around $30-40 a month.

Originally Posted by Sally Redux

We are paying a relatively high property tax compared to others in our street because we bought when the market was high. However we did recently receive a reduction based on the assessed market value having dropped by over $100,000. As you say, the system throws up alot of anomalies eg. people wanting to downsize.

Originally Posted by Englishtart

Have to say I am pleasantly surprised about the pick-ups we get here, Monday is recycling day, no sorting, just stick it out front. Wednesday is yard waste pick up, you should see some of the piles around here on a tuesday night Sometimes it's hard to drive through the streets because opposite neighbors will put out huge loads of palmetto leaves, bushes, grass cuttings all sorts of crap! Then Thursday is household trash day. No idea how much it all costs, cause we rent, we just pay for the thursday pick up.

Originally Posted by Englishtart

Have to say I am pleasantly surprised about the pick-ups we get here, Monday is recycling day, no sorting, just stick it out front. Wednesday is yard waste pick up, you should see some of the piles around here on a tuesday night Sometimes it's hard to drive through the streets because opposite neighbors will put out huge loads of palmetto leaves, bushes, grass cuttings all sorts of crap! Then Thursday is household trash day. No idea how much it all costs, cause we rent, we just pay for the thursday pick up.