Proposition 19 is on the ballot, and the California Association of Realtors wants you to believe that if it passes, there will be a surge of new inventory from seniors finally being able to sell their homes and take their ultra-low property-tax basis with them to a new home in a county not previously available.
They have deftly orchestrated a campaign that touches on all the hot buttons too. Just look at the title – who doesn’t want to protect the homes of seniors, severely-disabled, families, and victims of wildfire or natural disasters?
But they ignore that seniors have been able to sell and take their ultra-low property-tax basis with them for years – but only if they move to one of the 10 counties in California (out of 58) who have previously approved the benefit.
The ten counties are the major population centers; Alameda, Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Mateo, Santa Clara, Tuolumne, and Ventura. So they want us to believe that seniors have always wanted to move to the sticks – and if passed, the taking of their property-tax basis is the game-changer that gets them to finally move?
Other thoughts:
- How much do seniors need to spend on a replacement home in the sticks? Half a million should do it, so without Prop 19, the regular tax basis would be around $5,000 per year. If a senior pays less than $2,000 annually on their old home….the actual savings isn’t a large amount ($1,000 to $3,000 annually) but yes, every little bit helps.
- Did the grandkids already move to the same town? Probably a more-important ingredient than saving $1,000 to $3,000 per year.
- It only benefits seniors leaving the big cities for small towns. Are they going to live without their modern conveniences like doctors (a big issue), shopping, entertainment, and a way of life to which they’ve become accustomed to for decades, just to save $1,000 to $3,000 per year?
- Prop 19 protects the ability of kids and grandkids to inherit the ultra-low tax basis from the parents and grandparents. How does that create more homes on the market?
But the Association is throwing their full weight behind Prop 19, have gotten the firefighters on board in order to play the wildfire card, and they are advertising on TV:
To me, the thought of Prop 19 creating “tens of thousands of housing opportunities” is preposterous. But seniors are overdue, and maybe it will be the final reason that gets them to move. For that reason, let’s add the passing of Prop 19 to our list of reasons why the 2021 selling season will be like no other!
Check out their impressive website:
I saw a good article today. Exempt people over 65 from paying property taxes but make them pay the current market assessed value up until 65.
That’s a good one!
To be politically feasible, it would have to start in 5-10 years so most of the Prop 13 enthusiasts would die off first.
I’ll take that back.
Let’s do an add-on to Prop 19:
Those who are 65 and older who move down in price will get FREE PROPERTY TAX!
You don’t have to worry about taking your old tax basis with you – instead, you pay NO PROPERTY TAX.
That would actually stand a chance by itself of getting seniors to move.
Those who move up pay regular rate. Those who can afford to move up, can afford to pay the tax.
And I could probably live with the current proposal of a formulated blend of old tax/new tax.
There is something that is inherently unfair about kids getting the parents’ ultra-low property-tax basis too. We should re-examine that one.
It’s not a benefit available to all. Just to those who happen to have relatives who were long-time Californians.
Does it address commercial properties in anyway? That is the real problem here. The most valuable commercial real estate gets protected by prop 13. My neighbors probably pay more in real estate taxes than Disneyland does
Does it address commercial properties in anyway? That is the real problem here.
Well that’s another subject and it will be a real problem alright.
There is a different initiative on the ballot that keeps residential properties on Prop 13 taxes, but splits off the commercial properties and taxes them at full rate instead.
Having both initiatives being advertised at the same time will be confusing, and they will probably suffer the same fate. Either both pass, or both fail.
Key Provisions of Initiative:
• Requires all business property to be reassessed to fair market value, beginning on the 2022–2023 lien date. The Legislature may phase in this requirement over three years.
• Increases business property taxes by $7.5 billion to $12 billion a year, according to the Legislative Analyst.
• Requires reassessment of business property to fair market value every three years.
• Includes all business property, except for property used for residential (including rental) or agricultural production purposes. Mixed-use property is reassessed proportional to its commercial use.
• Exempts from full reassessment business property with an on-site business, and which is under a single ownership with no more than $3 million worth of property statewide.
• Exempts from taxation up to $500,000 of business personal property and exempts from taxation all tangible personal property of certain small businesses.
• Dedicates the proceeds of the tax increase to schools, community colleges and local governments, in proportion to what those entities currently receive in general property tax allocations. In general, schools receive about 40% of the allocation, with cities, counties and special districts splitting the rest.
• Allocates money to these entities with almost no strings attached. No money is retained for reserves and few accountability conditions are attached.
• Earmarks $1 billion a year for the costs of implementation (for example, assessor’s offices), compliance and support of existing state and local programs.
https://advocacy.calchamber.com/policy/issues/split-roll-battle/
You are missing the key component of Prop. 19 and that is the requirement that inherited property be the primary residence of the person inheriting it otherwise it is reassessed.
I didn’t miss it. It’s obvious.
You need to adjust your bullet point that it protects inherited property from being reassessed then. It is totally misleading and that is where the revenue will come from in the measure to pay for wildfire fighting.
Also, the other 48 counties are not all in the “sticks”. You think Orange and Santa Barbara counties are the middle of no where with houses for under $750k? That makes no sense.
Here is the description of the ballot measure
https://ballotpedia.org/California_Proposition_19,_Property_Tax_Transfers,_Exemptions,_and_Revenue_for_Wildfire_Agencies_and_Counties_Amendment_(2020)
It is totally misleading and that is where the revenue will come from in the measure to pay for wildfire fighting.
How does protecting the existing ultra-low property-tax basis generate the revenue to pay for wildfire fighting?
You think Orange and Santa Barbara counties are the middle of no where with houses for under $750k? That makes no sense.
This initiative isn’t to help the affluent. If you can afford to move to Santa Barbara or the OC, then taking your property-tax basis isn’t going to be the game-changing reason why you move. They will just pick up and go – they can afford it.
This is for the masses. The retirees, the pensioners, and others that would move because they save the few thousand dollars per year by taking their old taxes with them.
What’s your blog’s name? I’d like to come by and say hello.
Let’s be clear. You can only pass on the tax savings to your children if it becomes their primary residence.
So let’s say you want pass on your home to your kids. It’s paid for and your kids would like to keep it as a vacation home or maybe rent it. With the cost of housing today that is a dream most millennials and younger can only dream about.
Prop 19 squashes that dream.
They (one, all?) would have to move from where they are to make the home their primary residence.
So who benefits from this proposition. Not your kids. Not people looking to rent, after all who is going to buy a house in CA at the current market rate and rent it at anything approaching affordable? Real estate agents by way to the commission they stand to make.
A note to people who are renting who thinks this will not affect them. What happens when you reduce supply? The price goes up. Prop 19 will inevitably lead to the cost of rents going up. As more and more people sell the homes they inherit because they can’t afford the taxes, the number of homes for rent will decrease. Or conversely the rents will be adjusted to account for the increase in taxes.
I urge you to vote no on this proposition.
Oh come on Lou, what do you have against realtors? 😆