If I understand correctly, then in California Prop 8 is supposed to give peace of mind to home buyers by providing temporary property tax relief in case housing market crashes soon after they bought a home.
Had two questions how prop 8 works in real life:
- When there is market down turn, how is the reassessment value determined under prop 8? To me it seems that assessors have a lot of leeway and could treat different homeowners differently by assessing higher values to some and lower to some?
- In case of market crash, can homeowner make the value assessed under prop 8 permanent by having a triggering event that would require value reassessment (e.g. by starting home remodeling works or by making changes to home ownership)? Basically he could lock in lower cost basis that would allow homeowner to enjoy benefits under prop 13 (that limits 2% increase to assessed value) for few more years in case there is sharp price rebound in next few years? Obviously, if this is possible, then this sounds like winning strategy.