Pet Protection

by Sylvia on September 8, 2018

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Ballot Prop. 5 Restores Fairness to Tax System

Seniors in California who want to downsize from their three- or four-bedroom home, now that their children
are gone, find themselves facing a costly and daunting dilemma. If they sell, they would lose the property tax protections they’ve enjoyed under Proposition 13.

Instead of paying what experts are calling a steep “moving penalty” in the form of a sharp property tax in-
crease, these people stay in a home that could otherwise be sold to a young family. This is part of the reason why California is facing a crushing affordable housing shortage: fewer single family homes are reaching the
sales market.

Voters can fix this problem and eliminate California’s property tax moving penalty by voting yes on Proposi-
tion 5, known as the Property Tax Fairness Initiative. The measure, qualified for the ballot by nearly 1 million registered voters, protects people 55 years and older by allowing them to take their property tax protections with them when they move, giving them the ability to move to a safer, more practical home, or one that is closer to their children and grandchildren, or health care facilities. That same protection would also be ex-tended to the severely disabled and to victims of natural disasters.

The law was carefully written to ensure that people would be protected while still paying their fair share of
property taxes. Currently, a homeowner’s property tax bill is calculated at 1 percent of the home’s assessed
value at the time of the sale, with annual increases of no more than 2 percent. Over time, as California’s real
estate market has heated up, that has provided long-time homeowners with an important safeguard against
higher taxes. But it has also effectively blocked people from moving.

Proposition 5 fixes this by allowing seniors the flexibility to move anywhere in the state, limiting the tax pen- alties they might face while also ensuring they pay their fair share of property taxes. For example, let’s say a senior sells a house assessed at $300,000 for $700,000. That senior then buys a new home for $800,000. The new assessment would then be $400,000, reached by adding the difference between the sale and purchase price to the original assessed value.

Screen Shot 2018-11-08 at 12.35.51 PMSeniors, the disabled and natural disaster victims should not be penalized by an unfair tax system that prevents them from making the housing choices that are best for them. Proposition 5 would provide the fairness and freedom that California de-
serves.

Excerpts from an article written by Steve White president of the California Association of Realtors

 

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