Initiative to Change Some Property Tax Rules Coming

 

 

 

Dear Monica: I have heard that there may be a ballot initiative coming soon in California that would change the way commercial and industrial properties are taxed. Do you know about this? Carole V.

 

Dear Carole: Yes. There is a measure that has qualified for the ballot in 2020 that would require commercial and industrial properties to be taxed at fair market value. Proposition 13 passed in 1978, stipulated that all properties would be taxed at a certain percentage of purchase price, with a 2% annual cap on any tax increases. When a property is sold, it is assessed under at the purchase price.

 

Many commercial buildings are owned by corporations and although they have not sold, in many cases the shareholders and corporations themselves have sold. There has been an enormous rise in property values and yet the property taxes stay the same. Funding for schools and local services has declined as a result. The ballot initiative to change needs a 60% approval to pass. Small family-owned business would be exempt from these changes until they are sold. For more information go to Schools and Communities First.