We are voting on 3 major Real Estate Ballot measures come Election Day. I thought I would give you a quick hopefully non biased summary.
Proposition 15: Property Tax on Commercial and Industrial Properties
This will be a change of constitutional change Proposition 13 for commercial and industrial properties with some exceptions. Since 1978 Proposition 13 has maintained property tax for all properties (Residential, Commercial and Industrial) to be limited to no more than 1 percent of the purchase price (at the time of purchase), with an annual adjustment equal to the rate of inflation or 2 percent, whichever is lower. If passed proposition 15 will assess taxes on commercial and industrial properties at market value, while continuing to assess taxes on residential properties based on the purchase price, is known as Split Roll. The ballot initiative would distribute the additional revenue to specific areas, rather than the General Fund. First, the revenue would be distributed to (a) the state to supplement decreases in revenue from the state's personal income tax and corporation tax due to increased tax deductions and (b) counties to cover the costs of implementing the measure. Second, 60 percent of the remaining funds would be distributed to local governments and special districts, and 40 percent would be distributed to school districts and community colleges. For the finer details please click here
Proposition 19: Property Tax Transfers, Exemptions
This will allow people over 55 years old or with severe disabilities to transfer their current property tax assessments to any new purchase within the State three times in their lifetime. Currently through proposition 60/90 they are only allowed to do it once and only in counties who have opted in (Alameda, El Dorado, Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Mateo, Santa Clara, Ventura). Currently the new purchase has to be 105% of the property they are transferring out of. This proposal will allow them to purchase up to any value and pay market value assessment value on the difference. In addition, the new proposal requires that inherited homes that are not used as principal residences by the children or grandchildren, be reassessed at market value when transferred. The additional revenue or net savings resulting from the ballot measure will go to wildfire agencies and counties. For the finer details please click here
Proposition 21: Local Rent Control Initiative
This is like Proposition 10 that was rejected by 59% of California voters in 2018. The ballot measure would replace the Costa-Hawkins Rental Housing Act which was passed in 1995 and exempted Rent Control for housing that was first occupied after February 1, 1995, This encouraged developers to build new housing knowing they can get a fair return on their investment. Under this new proposal only homes 15 years or newer will be exempt. Currently when a property is vacated the rent can increase to market rent. This new proposal will limit the increase to 15% over 3 years. For the finer details please click here