California November 2018 Ballot - Proposition 5
There have been a number of "changes" to California's Proposition 13 over the years. This year's Proposition 5 would be the worst of this bad bunch.
Eight years after the passage of Prop 13, the voters passed Prop 58. This proposition allowed parents to pass their homes to their children without causing a reassessment of the property's value. The artificially low assessed value of that home would continue to be taxed at a much lower rate than homes purchased after Prop 13 went into effect. That was changed a decade later by Proposition 193 which added the ability for grandparents to pass on property to their grandchildren without triggering a reassessment of the value of the property. Oh yes, let's not forget that Prop 58 also allowed a parent to pass on real estate other than their residence to those kids, without the first $1 million in value being reassessed.
The original purpose of Prop 13 was to keep rapidly increasing property tax bills from forcing residents out of their primary residence. Not to allow other property to be passed on from generation to generation without stepping up their assessed values. A Los Angeles Times article published this past August shows that Beau Bridges, Jeff Bridges and their sister have saved over $300,000 in property taxes because a home they jointly own was not reassessed when they inherited it in 2009.
That Times piece points out that in L.A. County, over 60% of homes inherited that were not the primary residence being passed on were being used as second homes or rental properties. The home owned by the Bridges was listed for rent at $15,595 per month. Had people known that Prop 13 would have caused what it has caused in terms of homes passing on with those low assessed values being used not as residences for the heirs, but to generate large amounts of rental income, the vote might have been different. Okay, probably not.
So what Prop 5 does is to build on Propositions 60 and 90, which allow someone who is 55 or older and owns a home with a Prop 13 assessment at its 1976 value to transfer that assessed value to a replacement home anywhere in the state, as long as that replacement property is of equal or lesser market value than the market value of the home they have sold; within two years of the sale. Prop 60 restricted those transfers to replacement homes in the same county, Prop 90 allowed it to be done to a replacement home anywhere in the state, although not all counties allow such transfers.
Prop 5 would expand on those transfers. It would cost the state approximately $1 billion in lost property tax revenues annually. The only group who actually benefits from Prop 5 is realtors.
I'm voting NO on Prop 5.
Eight years after the passage of Prop 13, the voters passed Prop 58. This proposition allowed parents to pass their homes to their children without causing a reassessment of the property's value. The artificially low assessed value of that home would continue to be taxed at a much lower rate than homes purchased after Prop 13 went into effect. That was changed a decade later by Proposition 193 which added the ability for grandparents to pass on property to their grandchildren without triggering a reassessment of the value of the property. Oh yes, let's not forget that Prop 58 also allowed a parent to pass on real estate other than their residence to those kids, without the first $1 million in value being reassessed.
The original purpose of Prop 13 was to keep rapidly increasing property tax bills from forcing residents out of their primary residence. Not to allow other property to be passed on from generation to generation without stepping up their assessed values. A Los Angeles Times article published this past August shows that Beau Bridges, Jeff Bridges and their sister have saved over $300,000 in property taxes because a home they jointly own was not reassessed when they inherited it in 2009.
That Times piece points out that in L.A. County, over 60% of homes inherited that were not the primary residence being passed on were being used as second homes or rental properties. The home owned by the Bridges was listed for rent at $15,595 per month. Had people known that Prop 13 would have caused what it has caused in terms of homes passing on with those low assessed values being used not as residences for the heirs, but to generate large amounts of rental income, the vote might have been different. Okay, probably not.
So what Prop 5 does is to build on Propositions 60 and 90, which allow someone who is 55 or older and owns a home with a Prop 13 assessment at its 1976 value to transfer that assessed value to a replacement home anywhere in the state, as long as that replacement property is of equal or lesser market value than the market value of the home they have sold; within two years of the sale. Prop 60 restricted those transfers to replacement homes in the same county, Prop 90 allowed it to be done to a replacement home anywhere in the state, although not all counties allow such transfers.
Prop 5 would expand on those transfers. It would cost the state approximately $1 billion in lost property tax revenues annually. The only group who actually benefits from Prop 5 is realtors.
I'm voting NO on Prop 5.
posted by me at 8:20 PM
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