California Elections 2020: Proposition 19 - Property Tax Changes
How Would the Ballot Measure Change the Rules Governing Tax Assessment Transfers?
The ballot measure would change the rules for tax assessment transfers. In California, eligible homeowners can transfer their tax assessments to a different home of the same or lesser market value, which allows them to move without paying higher taxes. Homeowners who are eligible for tax assessment transfers are persons over 55 years old, persons with severe disabilities, and victims of natural disasters and hazardous waste contamination.
The ballot measure would allow eligible homeowners to transfer their tax assessments anywhere within the state and allow tax assessments to be transferred to a more expensive home with an upward adjustment. The number of times that a tax assessment can be transferred would increase from one to three for persons over 55 years old or with severe disabilities (disaster and contamination victims would continue to be allowed one transfer).
How Would the Ballot Measure Affect Inherited Properties?
In California, parents or grandparents can transfer primary residential properties to their children or grandchildren without the property's tax assessment resetting to market value. Other types of properties, such as vacation homes and business properties, can also be transferred from parent to child or grandparent to grandchild with the first $1 million exempt from re-assessment when transferred.
The ballot measure would eliminate the parent-to-child and grandparent-to-grandchild exemption in cases where the child or grandchild does not use the inherited property as their principal residence, such as using a property a rental house or a second home. When the inherited property is used as the recipient's principal residence but has a market value above $1 million, an upward adjustment in assessed value would occur. The ballot measure would also apply these rules to certain farms. Beginning on February 16, 2023, the taxable value of an inherited principal residential property would be adjusted each year at a rate equal to the change in the California House Price Index.
What Would the Ballot Measure Do With Changes in Revenue?
The ballot measure would create the California Fire Response Fund (CFRF) and County Revenue Protection Fund (CRPF). The ballot measure would require the California Director of Finance to calculate additional revenues and net savings resulting from the ballot measure. The California State Controller would be required to deposit 75 percent of the calculated revenue to the Fire Response Fund and 15 percent to the County Revenue Protection Fund. The County Revenue Protection Fund would be used to reimburse counties for revenue losses related to the measure's property tax changes. The Fire Response Fund would be used to fund fire suppression staffing and full-time station-based personnel.
Official Arguments in Favor of Proposition 19
Limits property taxes for seniors, wildfire victims, and disables homeowners. Removes unfair, ever-changing location restrictions incurrent law so homeowners who are seniors, disabled, or victims of wildfire can transfer their home’s Prop. 13 tax savings to a replacement home anywhere in California.• Provides housing relief for millions of seniors, many feeling trapped in homes they can’t maintain, with too many stairs, located too far from family or medical care—made worse by coronavirus health risks. Creates record home ownership opportunities for renters and new homeowners statewide as tens of thousands of homes will become available for the first time in decades.
Closes unfair tax loopholes used by East Coast investors, celebrities, and wealthy trust fund heirs on vacation homes and rentals. News reports and property records have revealed rules meant to limit taxes on family primary residences are exploited by out-of-state professionals, celebrities, and wealthy heirs to avoid paying their fair share of taxes on vacation homes and rentals. Exploiting loopholes resulted in billions in lost revenue for schools and counties, forcing California homeowners to pay tax bills 10 times higher than rental homes in the same neighborhood owned by heirs, many living as far asFlorida or New York.
See all the arguments in favor of Proposition 19 here.
Official Arguments Against Proposition 19
Proposition 19 takes away Proposition 13-related protections that California families have under the StateConstitution and replaces them with a tax increase.
The non-partisan Legislative Analyst’s Office projects that Proposition 19 could eventually cost California families about two billion dollars annually in higher property taxes.
See all the arguments against of Proposition 19 here.
Official Websites for Proposition 19
Visit the Official Website for Yes on Proposition 19 here: https://www.yeson19.vote/
Visit the Official Website for No on Proposition 19 here: not found
Who is Funding Proposition 19?
Tax Savings and Housing Relief for Seniors, Severely Disabled, And Wildfire Victims was organized as a political action committee (PAC) to support Proposition 19. The campaign had raised $19.15 million. The California Association of Realtors Issues Mobilization PAC was the largest donor, contributing $15.70 million. Before Proposition 19, the PAC was called Homeownership for Families and Tax Savings for Seniors and supported the California Property Tax Transfers and Exemptions Initiative.
What is Proposition 19?
If approved, Proposition 19 will allow for homeowners, who are over the age of 55, severely disabled or whose homes were destroyed by wildfire, to transfer their primary home's property tax base value to a replacement home of any value. The measure might include tens of millions of dollars for schools and local governments, according to the Legislative Analyst's Office.
Who is Supporting Proposition 19?
Brian Rice, president of the California Professional Firefighters
Kathleen Barajas, president of the Californians for Disability Rights
George Mozingo, board member for the California Senior Advocates League
Who is Opposing Proposition 19?
Ken Cooley, assemblymember
Patricia Bates, state senator
Jon Coupal, president of the Howard Jarvis Taxpayers Association
For more information, go to ballotpedia.org.
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