You may have noticed some flyers in your mailbox recently about changes to Prop 13.
A ballot measure is coming to the November 2020 ballot to change Prop 13, which change would create what is called a “split roll”. The “split roll” would increase property taxes for commercial and industrial properties, except those zoned as commercial agriculture or that are owned by small businesses (fewer than 50 employees). So, if you are a homeowner, you can rest at ease… for now. Some opponents on the measure argue that this change to Prop 13 will only bring on more change in the future. You may be wondering what exactly is Prop 13?
Prop 13 essentially freezes the assessed value of all properties (residential and commercial) at the price they were purchased. Since property tax is based on roughly 1% of the assessed value, a lower assessed value means less property taxes. The 2020 ballot measure would require that commercial properties be reassessed based on their current market value. This could increase property taxes significantly for some businesses who have owned property for long periods of time (take Disneyland, for example).
For a quick explanation of Prop 13 and what happens to property when it is passed on to the next generation, watch my latest YouTube video below.