In the book A Year In Provence, Peter Mayle describes buying a home in France. Evidently everyone lies about the actual prices of homes in France, because of the taxes, so that when the house sale is actually transacted, the government official conveniently leaves the room and the buyer gives the seller the real amount of money.
Having just bought a home here in the great state of California, I find myself wondering if the same sort of thing doesn’t go on here. I haven’t heard that it does; I just find myself wondering.
Property taxes in California are calculated based on the sales price—initial property taxes are 1% of the sales price, and the taxes can only rise 2% every year thereafter. (Yes, Proposition 13, and no, we won’t get into how it’s a complete windfall for corporations and everyone else gets screwed.) So if you buy a house for $100,000, your initial taxes will be $1,000 a year. (You will also be very popular, because I am willing to bet there isn’t a house in the entire state for under $300,000.)
But if I say my initial purchase price was $50,000, and I pay you $50,000 under the table, then my property taxes are only $500 to start with.
When you start adding lots of zeroes to all of these prices, you can see why people might want to do this.
Other than the fact that it’s illegal—and in today’s climate, ripping the entire state of California off for billions of dollars doesn’t even rate probation, let alone jail time—why aren’t people doing this with home sales? Or are they and I totally missed out?
Just set up a small holding company that owns the house and sell that company. The house is never sold!
go to realestate.com and do a search for $100k to $300k
(gotta bump the low end to strip out mobile homes)
House prices in California are about “location location location”. The decoration on the real estate matters some.
The ability of modern corporations to gamble with, steal, or destroy vast amounts of wealth without risk is mind boggling.
You’re telling ME what goes into California real estate?
🙂 I’ve been window shopping for homes here for 10 years.
About 4 years ago my interest was really piqued when I went to a customer’s home in Riverside. An hour’s drive from Burbank for a $200k 2 story home on 3 acres. Definitely rough hewn and a fixer upper, it told me just what you buy for the big bux.
I don’t know much about the high end, ’tis true. But I do know you can buy in California for under $300k, though probably not within a couple of hours of SF.
I was in Watts a few months ago picking up a teen I mentored. Yes, that’s THE Watts. Her family rented one bedroom in someone else’s house. Her living area was 15×15 at tops – though they did have access to the bathroom and kitchen. Chickens and roosters in the yard. The kind of place where drive by shootings are the norm, tho few other than gangstas can afford cars. You get the idea.
The house next door was for sale so I peeked at the info listed on it. What could it possibly be? $40 or 50K? Nope. $170K. I was floored. In Watts. Sheesh.
I work a couple miles east of Watts. Since we moved to the new business location, we haven’t found *any* bullets in the parking lot.
I wouldn’t buy a home in East LA or South Central from a listing. Besides, I get a lot of funny looks when I drive in the area.
$170k was the asking price. Doable with a 2-3 income extended family of the likely SES.
All the HGTV decorating shows and “Househunters” are done in California and I always wonder what those homes sell for.
Yes, you can buy a home for less than $300,000 in California. I sell homes in San Joaquin County, about 45 minutes South of Sacramento and a couple of hours from the Bay area. We are home to the 1,000 miles of waterways of the Delta. Our cities include: Acampo, Lodi, Stockton, Linden, Manteca, and French Camp.
Its worse in florida, its 2% of the sales price of the home and can go up 3% each year, and thats primary residence. If you buy homes for investment property, they can go up even more.