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Deal Reached On Changes in Commercial Property Ownership Under Prop 13

Andrew Nixon / Capital Public Radio
 

Andrew Nixon / Capital Public Radio

There appears to be a deal at the state Capitol that would close what critics say is a loophole on how some large commercial properties are reassessed under California’s Proposition 13.

The deal doesn’t touch Prop 13 itself and does not affect homeowners.  Instead, it addresses several high-profile cases in which commercial property owners dodged big increases in property tax despite a change in ownership.  They did so through a loophole not in Prop 13 but in the state law that defines a “change in ownership.”  This deal – among legislative Democrats, business and taxpayer groups – would change that law. 

“This is something that I think appeals to people who are still very supportive of Prop 13 but they know that if we hadn’t done this, the backlash could have even been more serious,” says Asm. Tom Ammiano (D-San Francisco), the bill's author and one of the architects of the deal.

“Number one, it’s good tax policy.  In fact, it’s good tax policy that’s consistent with the principles of Prop 13, which are when property changes hands, it should be reassessed.   Secondly, there is a political element.  This goes as far as it needs to in terms of taking this issue off the table” so it can’t be used to campaign for broader Prop 13 changes, says Jon Coupal with the Howard Jarvis Taxpayers Association.

The bill faces a key committee vote later this week.  If approved, it would bring in millions of dollars a year in additional property tax revenues for the state, cities, counties and schools.

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