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Title: Proposition 13 and Residential Mobility

Citation Type: Miscellaneous

Publication Year: 2008

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Abstract: Proposition 13 transformed California's property tax from a market-value-based tax to an acquisition-value-based tax, under which the assessed value of a property equals the market value at the time the property is sold, but can increase by no more than 2 percent per year until the next change in ownership. Acquisition value assessment discourages mobility because property owners lose their tax break from the assessment limit when they sell. Property taxes can increase dramatically after a move, even if the market value of the new property is the same or less than the old one.Young households may choose not to move to larger houses as their families grow in size and older households may not downsize as their children leave. Homeowners may not move if their job location changes and may not accept a job offer if it necessitates a move. Households may not "vote with their feet" by choosing to move to communities that provide their desired local services and taxes.Those choices result in inefficient resource allocation and decreased economic welfare.

Url: https://taxprof.typepad.com/taxprof_blog/files/2008-19151-1.pdf

User Submitted?: No

Authors: Sexton, Terri A

Publisher: California State University, Sacramento.

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure, Other

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