REALTORS® in the Final Stages of Gathering Signatures for Property Tax Fairness Initiative (Portability)
As you should know by now, the Greater San Diego Association of REALTORS® (SDAR) and the California Association of REALTORS® are embarking on an historic effort to support seniors, the disabled and victims of natural disasters, while at the same time unlocking homeownership opportunities across the state. C.A.R. is going to qualify an initiative for the November 6, 2018 General Election ballot which will allow senior homeowners (55+) to keep all or most of their Proposition 13 property tax savings when they move. Every REALTOR®, Affiliate, their clients, and families are urged to sign the petition.
Why does this matter?
Proposition 13 protects homeowners from rapidly increasing property taxes. However, seniors worry that they cannot afford a big property tax increase if they sell to downsize or move closer to their families. As a result of this “moving penalty,” nearly three-quarters of homeowners 55 and older haven’t moved since 2000. The same is true for the severely disabled and those whose homes are destroyed by natural disasters. The current property tax system is arbitrary, unfair and needs to be fixed.
What will the Property Tax Fairness Initiative do?
The measure, when approved by voters, will eliminate the “moving penalty” and fix property tax laws to allow seniors aged 55 and over, the disabled and victims of natural disasters to sell their homes, maintain their property tax protections and continue to pay their fair share in taxes. According to the California Legislative Analyst's Office, tens of thousands additional homeownership opportunities will occur annually.
Doesn’t current law protect homeowners?
The amount any homeowner pays in property taxes is based on the assessed value of their home at the time of purchase. Generally, Proposition 13 limits property taxes to 1 percent of the assessed value at the time of purchase even if the value of the property subsequently increases.
Unfortunately, homeowners lose their Proposition 13 property tax savings when they move to another home. Under another law, Proposition 60, senior homeowners – defined as 55 years of age or older – are allowed to transfer their property tax base to another home in the same county so long as the purchase price of the replacement home is equal to, or less than, the sale price of the original residence.
Existing laws related to this issue are arbitrary and geographically restrictive:
Under Proposition 60, a senior homeowner is limited to making only one such transfer over the course of his or her lifetime. And, if the spouse of a senior homeowner has already transferred a property tax base, that senior homeowner is disqualified from making another transfer of the tax base.
Proposition 90 is an extension of the original Proposition 60 program. Proposition 90 allows senior homeowners to transfer their property tax base to a home in a different county so long as that county accepts such transfers. (At last count, only 11 counties are accepting transfers from other counties.)
C.A.R.’s Property Tax Fairness Initiative eliminates the geographic restrictions and single-use provision to allow seniors, the disabled and victims of natural disasters to keep their property tax protections. They can move, while still paying their fair share in property taxes. Eliminating the “moving penalty” will unlock tens of thousands of homes for new homebuyers, helping to address California’s historic housing supply crisis.
Passing the Property Tax Fairness Initiative is a win-win for California.
How can I help?
Every California REALTOR® was mailed a copy of the petition late last year. The best way to help promote the initiative right now is to sign it, collect 4 additional signatures from other REALTORS® who are registered voters, and return the petition to SDAR. More petitions are available at SDAR and REALTORS® are encouraged to gather signatures from their clients and while walking their farms.
Please contact Ryan Maxson at (858) 715-8012 for questions or to request additional petitions.