Tax time is upon us, as are proposed California property tax changes for later this year. The “Property Tax Fairness Initiative”, which is making ground to appear on the November 6, 2018 state general election ballot, would allow homeowners 55 years of age or older to transfer some or all of their Proposition 13 property tax savings to a home of any price, located anywhere in the state, any number of times. Yesterday the Homeownership for Families and Tax Savings for Seniors Committee announced that it has submitted nearly one million signatures collected from California voters to qualify the initiative. Initially brought to the forefront by the California Association of Realtors, the measure is seen as a way to help ease the shortage of modest-priced and move-up housing for young families while lessening the tax penalty for seniors who want to move. Studies have shown that almost three-quarters of homeowners 55 and older in California haven’t moved since 2000.
A significant change to Proposition 13 that’s making progress to be on the ballot is called the “California Schools and Local Communities Funding Act of 2018”. This ballot would allow for a “split-roll tax”, removing Prop. 13’s restrictions on reassessments and tax increases for larger corporate-owned commercial and industrial properties. A provision in the initiative allows for exemption of agricultural property and certain small businesses whose total property holdings are valued below $2 million. While raising business costs for many in California, the initiative predicts to raise up to $11 billion in new revenue from corporate property taxes, in which legislative analysts say 40 percent would go toward helping schools and 60 percent toward local governments. Still in the initial stages, this measure will need to collect nearly 600,000 signatures to make the November ballot.
Proposition 13, originally introduced as the “People’s Initiative to Limit Property Taxation”, passed in its entirety in 1978 with 64.79 percent of the vote. It will be interesting to see voter’s reactions to the proposed changes, and to what changes are destined for the future. We look forward to your feedback on the topic, and also to assisting you with your most important real estate inquiries.