As local property owners, we have enough worries about our properties. We shouldn’t have to worry about how much our homes’ equity has grown over the years. For most of us, the more our home property value grows, the better off we’ll be in retirement. Right?
If local property owners do not vote down the city council’s proposed much higher transfer tax rates, then, we will have to worry about how much our property’s worth has grown over the years. Because, when we decide to cash in and retire, we will have to pay more in order to close the deal. But, if the community rejects this major tax increase, it will remain at its now low, easily understood rate of less than one-half of one-percent.
Do not be fooled, it’s not what your property is worth on Election Day that really counts. It’s what its future market value is when you sell it. And if past decades are any indicator, the rise in value of our local properties, which has consistently averaged over 5% over past decades, will continue.
The four progressive members waited until the last minute to rush their tax increase measure through so it could appear on the up-coming November ballot. They hurriedly pushed it through without time for much public vetting or Finance Advisory Committee input, They only saw dollar signs and a chance at grabbing some more of our hard-earned home equity, just before we retire.
These members don’t seem to understand that it really does matter how much you have at the beginning of your retirement. By signing on to increase our exit taxes on our nest-eggs, they lower the amount in just how much we will have starting out, during and, therefore, what we will have at the end of our retirement when we will need it the most. Do any of us really know how much we will need to live out our Golden Years?
Previous councils all have harped for years that our city’s revenues are too dependent on local sales taxes. But, a sales tax by any other name (even this Real Estate Transfer Tax) is just another sales tax based on sales of local property. Their newly proposed, multi-tiered tax increase, doesn’t really change our city’s dependence on local sales taxes. In fact, it just might make it even more dependent upon it, because during economic downturns, property sales and prices also tend to decline.
Willie Sutton, the infamous, 1950’s bank-robber was asked by a reporter why he robbed banks, his reply was reported to be simply: “Because that’s where the money is.”
That also seems to be the simple reasoning behind this progressive majority’s new money-grabbing tax scheme. They want to replace the easily understood single tax rate of less than one-half of one percent with a more confusing, four-tier marginal sales tax—by adding tiers of 1.5%, 3% and 4%. Think of this new scheme as their “nest-egg sucking” tax, just on a much grander, city-wide scale.
Checking the present transfer rates posted by the State–updated July 2020, if this transfer tax is not defeated, Culver City will have the highest multi-tiered transfer rates; not only in LA County, but, in the state of California. Because in these council members’ minds, when a long-time home owner finally sells, that’s where the money will be, ripe the taking—just like Willie Sutton.
Don’t let these four council members and other taxing advocates fool you into voting for this increase. Because if they do, after you finally decide to cash in your home equity and retire elsewhere, you can be sure the city will be waiting to strike–just when you close the deal–to suck out some more of your hard-earned home equity out of our nest-eggs , leaving you with even less at the start of your retirement.
One thing about we have learned in the past is that financial downturns tend to come and go, even pandemics pass. But, taxes, once voted in, usually take on a life of their own and have the costly habit of only increasing, thereafter.
Of all the retirees I know, I don’t think any of them would disagree that when it comes to the unknowns of retiring, it’s always better to start with more, than to start with less.