Santa Clara County property tax online payments: Web Link

Wow, if you can deduct over 10k on your taxes, that could fall into the category of the rich. That's what people in CA want, right? To tax the rich?

nah, most people who bought in this county after 2000 or so, and hence not blessed with decades of Prop13 tax gifting, would be able to deduct that much. Not sure I'd go on a "1 percenter" rant for those who put a large majority of their wealth into paying a mortgage.

@wowow

Ah you mean the older folks, the grand parents who worked here all there lives and are living on fixed income. Lived here before the likes of google and the minions they brought here from all over the world.

Days of yesterday, when there was no need for boat loads of new housing when there wasn't a whole lot of people moving here. Yeah, if you where smart back then you would have brought. Sorry you missed the boat, but a lot of us did. But if you don't like prop 13 you can always rent.

Prop 13 starts to work for you as soon as you buy a home, it helps lock in the amount you own yearly and increase yearly at a reasonable rate, 2%. Can't say the same for many of our salaries. California brought in something like 55 Billion from property taxes couple of yrs ago, that's a staggering amount. So don't give me the crying attitude that our schools are hurting because of it. And the best part of it, it's dynamic, if your property value goes down, it adjusts to a lower level.

Look up the reasons for why Prop 13 was put into place and you'll understand better.

I feel kind good about the new Tax law.

Why?

My new landlord currently pays well over $50,000 a year because he chose to buy the property at 450% actual value. Since the deduction maxes out at $10,000, he will simply be needing to pay more than $40,000 out of his pocket until he gets the property reappraised.

He can do this because the property value was “assumed” to be the cost of the property. But everyone knows you can get it reduced for free by simply filling out a form.

If he chooses NOT to get a reassessment of the property, that is his own problem regarding paying the COST. If he tries to petition for a tax “pass-thru” to the tenants, this will most likely not succeed because he CAN AVOID the higher cost.

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It is a shame that during this holiday season, you have tenants that receive subsidies, wishing ill financial will on landlords that provide them.

I am surprised that someone with alleged "business" degrees does not realize that his landlord is taxed on his legal entity's net income from operating his property, most likely an LLC, S-Corp or C-Corp. Property taxes are an expense subtracted from revenue for a Corporate Entity.

The SALT deduction that has been reduced applies to individual home owners personal income taxes.

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In response to The Truth you said:

“I am surprised that someone with alleged "business" degrees does not realize that his landlord is taxed on his legal entity's net income from operating his property, most likely an LLC, S-Corp or C-Corp. Property taxes are an expense subtracted from revenue for a Corporate Entity. “

That is correct, but that means the property owner will pay taxes on profits. However if no taxes are paid due to financial loss, than this still is a serious financial hit. In most cases, that deduction provides more reimbursement for the cost of property taxes. But since this property cannot provide an income threshold of 2% of the adjusted gross income of my landlord. The property is a loss due to the rent control and the poor choice of paying nearly $5 Million to purchase it. The mortgage cost alone is approximately $20,000 a month but the rental income is (average rent approx. 1600 * 11 ) is $17,000 a month income a monthly loss of approximately $3,000. That is not counting cost of maintenance, taxes, and required services. The new tax law applies like this:

“No Deductions for Not-For-Profit Rental Activities

The vast majority of rental activities qualify as businesses or investment activities. However, rentals that are not profit-motivated must be classified as not-for-profit activities, also called hobbies. UNDER PRIOR LAW, EXPENSES FROM A HOBBY COULD BE DEDUCTED AS A PERSONAL ITEMIZED DEDUCTION ON IRS SCHEDULE A TO THE EXTENT THE EXCEEDED 2% OF THE TAXPAYERS ADJUSTED GROSS INCOME. However, SUCH DEDUCTIBLE HOBBY EXPENSES COULD NOT EXCEED HOBBY INCOME. The TCJA completely removes the personal deduction for hobby expenses. This means that while the income from a rental activity classified as a hobby must be reported and tax paid, NO EXPENSES MAY BE DEDUCTED.”( Web Link

Given that my property owner is not a professional, this is a side business, the provision stating “Under prior law, expenses from a hobby could be deducted as a personal itemized deduction on IRS Schedule A to the extent the exceeded 2% of the taxpayers adjusted gross income. However, such deductible hobby expenses could not exceed hobby income.” The simple truth is that this property will be a loss and provide no income to this LLC, thus not achieving the 2% of his adjusted gross income will determine the legal classification of a “hobby” This the entire TCJA erases all deductions in this case.

Thus it may be that the LLC will simply operate at a loss, and does not entitle any deductions regarding personal income, thus this in result will potentially increase the personal taxes of the partners of this LLC.

Some quick math to try: What's 2% of $1,000? How about 2% of $10,000? Even the 2% increase hurts more recent owners (anyone in the last decade or two).

No other state has anything like Prop13. Every other state has taxes that go up with value. And never has it been the case that you could lose your home if you can't pay your tax. It goes against your house as a lean, paid on transfer of ownership (with fees/interest).