Couple that sold home to Zuckerberg for $14M gets property tax surprise

poor elderly couple in their early 60s has to pay market rate on their property tax after selling their home for 9 million more than it would have been worth if a billionaire didn't want it. So unfair. They're being taken advantage of.
 
Loco_local said:
poor elderly couple in their early 60s has to pay market rate on their property tax after selling their home for 9 million more than it would have been worth if a billionaire didn't want it. So unfair. They're being taken advantage of.
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It's hard to feel sorry for them, but what matters is whether the law was followed or not.  I think it probably was and they are going to lose.  With their vast new resources, they should have checked it out with both county assessors, and maybe a tax attorney, before proceeding to build their new place. 
https://www.boe.ca.gov/proptaxes/prop60-90_55over.htm

According to the Board of Equalization website (note the last line):

The replacement property must be of "equal or lesser value" than the original property.
In general, equal or lesser value means:

100% or less of the market value of the original property if a replacement property were purchased or newly constructed before the sale of the original property, or

105% or less of the market value of the original property if a replacement property were purchased or newly constructed within the first year after the sale of the original property, or

110% or less of the market value of the original property if a replacement property were purchased or newly constructed within the second year after the sale of the original property.

Note: When making the ?equal or lesser value? test, it is important to understand that the market value of a property is not necessarily the same as the sale or purchase price.
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If they live another 20 years, it's going to cost about $1.5 million in additional property taxes that they weren't expecting to pay.  Ouch!
 
I?m not really in favor of these type of tax transfer laws to begin with. They should be only used for the lower end market where a few thousand a year can make a big difference to someone close to retiring and want to downsize. Someone selling a 14 mil home to move into a 6 mil home shouldn?t qualify for these types of tax laws. Sounds like this couple didn?t want to downsize and instead wanted to build a dream home or something with their lottery earnings from Zuckerberg.
 
Let them pay up! they made $13million on a 1million home and they should have no problem paying $80k in taxes for rest of their life!
 
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