Several years ago on a visit to Lake Tahoe, we spotted a clever advertising on a Real Estate magazine. The ad was showing an example of property taxes for California vs a similar property in Nevada. For $1,000,000 Accessed Value in California the property taxes would be in excess of $12,500 per year while the SAME Accessed Value in Nevada you would be paying about $3,500 per year!! Not to mention the fact that $1,000,000 in Nevada buys much more Living Space that you could possibly get in California. Heck, we can’t even find a fixer upper for our investors in Los Gatos for less than $1 million dollar!
So, why not do what the Bush family does by pretending to live in Texas while they spent 99% of their time in Maine! That’s why you will notice a lot of beautiful homes in Zapher Cove area of Nevada where wealthy Californians have set up homes to use as the primary residence while living full time in Silicon Valley. Needless to say, there are IRS guidelines on what constitutes your primary residence, but who is going to police your movement and track you these days.
Wait a minute, what is National Security Agency shares their data with the IRS!?! If they did, then it would make it much simpler for the California to track the cheaters.
It was painful to see and watch! But we don’t have that problem to solve these days since we have not opted to call Nevada home yet. However, the high cost of living including the high cost of property taxes are a huge drain in average Californian household income
But not all the news is bad when it comes to California Property Taxes. Proposition 13 which amended the California Constitutions in 1978 capped the maximum amount of any ad valorem tax on real property to 1% of the full cash value. Proposition 13 also decreased property taxes by assessing property values at their 1975 value and restricted annual increases of assessed value of real property to an inflation factor, not to exceed 2% per year.
But not even Proposition 13 can take the sting of paying more than $16,000 of property taxes that we now pay to the Santa Clara County. As Ralph Cramden said on Honey Mooners, “One of these days, Alice”! One of these days, I will find the courage to ditch California’s high Property Taxes, but I just don’t know when.
If you are so inclined to consider a move to Nevada, we have resources there and can quickly market your property to cash buyers. Feel free to contact us.