There were a few real estate-focused propositions on the ballot this year in California, including Propositions 15, 19, and 21. Below are the results and how they can impact you!
Proposition 15 was voted NO
Proposition 15 was a ballot measure that would have amended the California State Constitution to increase property taxes for commercial and industrial properties, except those zoned as commercial agriculture. Property taxes would be based on market value with proceeds benefiting education and local government funding initiatives.
A “No” Vote Means: Californians opposed the constitutional amendment, meaning commercial and industrial properties will continue to be taxed on the property’s purchase price, with annual increases equal to the rate of inflation or 2 percent, whichever is lower. “No” voters say that this proposition would wreak financial havoc on landlords, especially those with fewer and smaller-dollar holdings, raising their costs dramatically, making the properties unaffordable, and in the end, landlords would just pass the higher taxes on to tenants in the form of higher rent.
Proposition 19 was voted YES
Proposition 19 changes certain property tax rules, including permitting homeowners who are over 55, severely disabled or whose homes were destroyed by wildfire or disaster, to transfer their primary residence’s property tax base value to a replacement residence of any value, anywhere in the state. It also limits tax benefits for certain transfers of real property between family members and expands tax benefits for family farms transfers.
A “Yes” Vote Means: Californians support limiting property tax increases for seniors, the disabled and wildfire victims. All homeowners who are over 55 (or who meet other qualifications) will be eligible for property tax savings when they move. Only inherited properties used as primary homes or farms will be eligible for property tax savings. Supporters say that this will standardize the tax treatment across all counties in California, allowing residents in one county to relocate to another county without incurring a financial penalty.
Proposition 21 was voted NO
Proposition 21 allows local governments to establish rent control on residential properties over 15 years old. Additionally, it allows local limits on annual rent increases to differ from the current statewide limit. Prop 21 allows rent increases in rent-controlled properties of up to 15% over three years at the start of new tenancy. Additionally, it exempts individuals who own no more than two homes from new rent-control policies.
A “No” Vote Means: Californians support the current State law that maintains current limits on rent control laws that cities and counties can apply. “No” voters claim that the problem is a severe lack of affordable housing – rented and owned – in the region, not landlords increasing rents significantly, and the proposition will harm owners with older properties who need to reinvest in improvements to make the properties attractive to existing and prospective tenants.
If you have any questions on how these propositions affect you, we would be happy to answer them. Please contact us for all of your real estate needs.