Field polls about Prop 13 is like asking people if they would like to see their property taxes increased. How many individuals own commercial property? Most Californians know that Proposition 13 protects residences from sudden changes in property taxes, except when the residence changes hands. Proposition 13 is a ballot measure passed by the people of California in 1978 backdated to 1975. Few Californians realize, however, and need to learn that Proposition 13 applied to all real property, including commercial, industrial, and rental real estate.
The results have not been good for California, nor even for homeowners as a group. Single family residences change hands on the average once every five to ten years, and every time they do, their property tax assessment is updated to fair market value. While some homeowners, especially elderly ones, have been in their homes for decades, the property tax assessments on the bulk of existing homes lag fair market values by less than ten years. They are locked into their homes for a very long time. New homes, of course, are immediately assessed at fair market value. Read the rest of this entry »