fbpx

Photo by Parker Johnson via unsplash.com.

published on December 16, 2021 - 10:56 AM
Written by

For the second time in as many election cycles, voters could consider significant changes to California tax policy — this time for an expanded tax exemption for single-family homes paid for by higher taxes on high-valued property of all kinds.

The bill comes on the heels of another property tax proposition voters shot down in 2020 and — as analysts predict — a $31 billion budget surplus.

The Housing Affordability and Tax Cut Act of 2022 was filed as a California ballot proposition In September. The proposal would first change the exemption homeowners can claim on their property taxes from $7,000 to $200,000. In order to appear on the November 2022 midterm ballot, petitioners would have to collect 997,139 signatures by April 2022.

On average, what was an $80 break on property tax ball would become a $2,000 break, according to Loren Kaye, president of the California Foundation for Commerce and Education. The foundation is affiliated with the California Chamber of Commerce.

The paperwork filed to circulate the petition said it would “help make housing more affordable for middle and working-class families.” The filing was made by Los Angeles-based Kaufman Law Group on behalf of a client, Stanley R. Apps, an employment attorney in Studio City.

“Since 1972, homeowners have only received a $7,000 property tax exemption, even though the median home price has grown from $28,660 to over $700,000,” the filing stated.

If passed, the proposition would also increase the Renter’s Tax Credit to $2,000.

The Legislative Analysts Office predicts tax breaks to homeowners would decrease tax revenue $12 billion to $14 billion annually and the renter’s credit would cost $4 billion.

To pay off what could be $18 billion in annual losses, the proposal would increase taxes on properties of all kinds — exempting ag and some low-income properties — valued at more than $5 million.

Homes, apartment complexes and any other commercial buildings would have their property taxes increase by 1% on top of other increases allowed under Prop. 13. Kaye said that would essentially double the tax liability faced by property owners.

Brett Visintainer, principal with the Visintainer Group in Fresno, said tenants in buildings with triple-net leases would bear any increase in taxes, jacking up their occupancy costs.

“Business owners would be put in a situation to pay more money into rent rather than invest into their business or people,” Visintainer said.

It could also hurt developers trying to build in new areas where rents need to be lower.

“The rents may not justify the new construction and stop projects from starting,” Visintainer said.

In 2020, voters turned down Prop. 15, which would have assessed commercial buildings at a market rate, undoing Prop. 13, the 1978 voter-approved initiative that established property tax based on purchase price.

Kaye said the tax increase would come as the Legislative Analyst’s Office predicts another tax surplus that could reach $31 billion.

“It’s irritating that people want to solve their problems on the backs of small business owners and other job creators,” Kaye said.


e-Newsletter Signup

Our Weekly Poll

Do you think Valley Children's Hospital will lose financial support due to CEO pay revelations?
119 votes

Central Valley Biz Blogs

. . .