https://www.evolve-ca.org/prop-13-facts/No. Most voters are unaware of this, but Prop. 13 applies to commercial property as well. This aspect of the law has led to significant unintended consequences. For example, Chevron alone is saving over $100 million a year by benefiting from Prop. 13's protections. Because homeowners move on average every ten years, and commercial property rarely, if ever, changes hands, the tax burden in California has shifted decisively onto residential property owners. Before Prop.13, residential accounted for 55% of the property tax and commercial paid 45%. Now residential shoulders 72% of the tax burden while commercial only pays 28%.
Yeah? And? The law exists. People adhere to the law. They save money. There's a loophole in the law that allows them to ALSO take this benefit when they do not LIVE in the property. That's the oversight. And not the homeowner's problem. Like the article states, time and time again, if they were paying current tax rates on the rental properties, they will still pay all the taxes in about a month of rentals. So it seems a simple thing to propose closing the tax loophole that allows people to claim the tax benefit on RENTAL properties. Don't blame the player. Blame the game.
To make their case, they spend a lot of time focusing on wealthy and influential families that don't need any tax breaks. This is rather disingenuous, because the vast majority don't fit into this profile. > In Los Angeles County, as many as 63% of homes inherited under the system were used as second residences or rental properties last year The "or" here is rather important, and what does "as many as" actually mean? > A similar trend was found in a dozen other coastal counties Notice how they restrict their "analysis" to coastal counties, even though they have access to data for all counties. > Vacation enclaves serve as the most popular locations for heirs using their parents’ homes as investments. Because those coastal places don't have much industry or commercial activity, and are better for retirement. People still in their earning years that don't have the savings to retire can't yet live in those houses, though I know people that do plan to retire in them. > The higher taxes on properties changing hands has had a major impact, especially on middle- and lower-income Californians trying to enter the market. Yeah, because trying to tax homes as a flat percentage of their market value doesn't make sense when you start talking about insane property values and normal families. Property taxes are supposed to pay for schools and such, which, while more expensive, isn't 15x more expensive in Silicon Valley than it is in counties in the Midwest. Are California schools hurting? As I understand it, property tax revenue is still well above the national average. Where is all that money going?