Ah, but then you just go challenge the assessment. The taxable basis should always reflect the market value. In any case, the downside protection for the property owner in prop 13 is the 2% cap on annual increases.
The government really shouldn't have downside protection, it's just more evidence as to why property taxes aren't a very good basis for taxation, as the original article suggested and I disputed. Property had the distinction of being a more stable asset price, but when the market rose abnormally, government got fat off of the proceeds, and is now paying the price as capital is being reallocated from property assets.
The government really shouldn't have downside protection, it's just more evidence as to why property taxes aren't a very good basis for taxation, as the original article suggested and I disputed. Property had the distinction of being a more stable asset price, but when the market rose abnormally, government got fat off of the proceeds, and is now paying the price as capital is being reallocated from property assets.