19 Oct What You Need to Know About Prop 15
Proposition 15 is a ballot measure that would amend 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.
What Does it Mean?
Prop 15 would change an existing 1978 law that bases property taxes in California on the purchase value. If passed in November, business owners with more than $3 million in commercial property would have their taxes reassessed on the current value.
The ballot initiative would make an exception for properties whose business owners have $3 million or less in holdings in California; these properties would continue to be taxed based on their purchase price.
The initiative would not change property tax assessments for homeowners. The initiative is known as split-roll.
If passed, the change from the purchase price to market value would be phased-in beginning in the fiscal year 2022-2023. Additionally, properties like retail centers whose occupants are 50% or more small businesses (defined as independently owned and operated, own California property, and have 50 or fewer employees) would be taxed based on market value beginning in fiscal year 2025-2026, or possibly a later date.
Voting “Yes” on Prop 15 supports the constitutional amendment requiring commercial and industrial properties (except those zoned as commercial agriculture) to be taxed based on their market value rather than their purchase price.
Voting “No” on Prop 15 opposes the constitutional amendment, meaning commercial and industrial properties would 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.
If you are interested in learning more about Proposition 15, you can visit the Official Voter Information Guide website.
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