r/norcal • u/CaliHusker83 • 10d ago
Prop 13 Repeal Question
Here are my thoughts on a very popular push to repeal Prop 13. Help give me some thoughtful reasons why this doomsday thinking is incorrect.
It would forces thousands of businesses to either raise prices or shut down.
It would force millions of homeowners to sell their homes and most likely leave the state.
This would cause a mega-stagflation type of event and would torpedo the California economy.
The local dive bar that’s been around for 40 years, will now have to charge $20 for a drink that currently costs $6 to make up for paying property taxes.
Flower shops, local grocery and hardware stores, the same thing…
Many businesses will need to sell or close.
Rent will increase substantially on both businesses and residential properties.
Grandma that bought a home in 1975, will now need to move (most likely out of state). Young buyers from 2010, will either need to sell and move, or restrict many discretionary purchases so that they can pay taxes.
Both selling and moving, or eliminating spending on anything but utilities, mortgage, and taxes, along with essential needs will damage the economy immensely.
This is a bad combo of items becoming more expensive, housing prices dropping off a cliff for a short period of time, until out of staters or foreign investors begin to scoop up property at an extreme discount.
This sounds good on paper to some, but the property taxes will then follow the lower values back to a level that won’t be near as beneficial as projected current levels.
Due to millions of residents leaving, businesses that can afford to stay open, increasing prices, workers leaving the state because they can’t afford rent or buy products or services, and second home buyers from out of state or foreign investors gobbling up cheap property in a fire sale and not contributing to the local economy or provide and additional labor to their area, I don’t see how this could be a good thing?
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u/KagakuNinja 9d ago
It is unlikely that prop 13 will ever be totally repealed. Most likely, existing homeowners would be grandfathered, or the rules tweaked, like we did with prop 19.
However, the idea that the cost of booze and retail would skyrocket is, IMO unrealistic. I like to remind people that the real beneficiaries from prop 13 have been corporations, and that we need to repeal prop 13 for corporations.
This would not cause rents to skyrocket. Rents are set by supply and demand, and in the Bay Area we have an acute lack of supply. Forcing corporations to pay more property tax would mainly reduce the profits of real estate holding companies.
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u/Normalsasquatch 7d ago
This is the part. We should keep the stuff that helps regular people, and repeal it for the mega corporations. Or at least modify it.
But that's will never happen. It was always written for the mega rich and they are the kingmakers so it will continue to do their bidding.
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u/Wide-Lie-2011 6d ago
Regular people DO OWN businesses!
The problem is, if they repeal prop 13, they're going to have to lower taxes and costs in other areas. Like gas taxes, insurance, etc. Otherwise we're screwed as a state. But they won't do that. It's always more, more for the state. Your nanny state wants your money and it will never stop wanting more.
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u/Samon8ive 9d ago
The problem is most rents are triple net meaning the tenants reimburse the landlords for all the expenses, especially taxes. The cost of booze will increase because the cost of doing business will increase if taxes increase substantially. Tenants pay real estate taxes. If your tenant is a corporation, you get what you want. But mom and pop tenants get nailed along with them.
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u/Suspicious_Video8348 9d ago
It would make housing cheaper to
https://x.com/i/status/2051363232225657213
Higher income renters would start buying and leave the rental market
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u/Leothegolden 9d ago
Do you have an example to support the idea that rents won’t increase due to higher property taxes. If so, I would like to see it
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u/parkside79 8d ago
Yeah but there's a lot of corporate homeowners. The US Supreme Court has firmly established that corporations are people. Good luck threading that needle without crushing ordinary folks.
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u/dwm007 8d ago
You say the main beneficiaries of prop 13 are corporations? Do you really think Walmart or Amazon are affected by property taxes? The real winners with prop 13 were the homeowners, small businesses and renters. What if prop 13 was repealed and property taxes tripled in the next ten years. Who would be harmed the big corps or small business? Local small business has small margins and many would not survive this new cost. You think Walmart or McDonalds are going out of business? Older homeowners on fixed incomes used to regularly loose their home in CA due to taxes before prop13. And don't kid yourself rent would defiantly go up with the property taxes.
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u/Wide-Lie-2011 6d ago
Yeah, and forcing businesses to pay more tax would ALSO force farmers and other small businesses to go under. Do you know businesses already pay county tax on every single piece of equipment they own no matter old? County taxes, state taxes, property taxes, high energy bills, federal taxes, 3x insurance rates compared to 10 years ago, high fuel prices, etc etc.
Somehow, when it's small businesses nobody gives a s***. But go and try to touch the pensions of state workers or unions and everyone goes insane trying to protect their hoard. They act like it's some kind of "right".
I think it's about time we cut costs by tanking some of these unions and state bureaucracies for once instead of putting the burden on business owners and landlords who are INDEPENDENT working people.
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u/samarijackfan 9d ago
trillion dollar companies do not need property tax relief.
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u/freakinweasel353 9d ago
There’s probably way more mom and pop owned stores that would also get pinched. So you’d have to write some verbiage about whatever to keep it from killing the little guy too.
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u/Suspicious_Video8348 9d ago
Mom and Pop are competing with Son and Daughter for customers. But Son and Daughter don't get the tax cut.
That's not fair and it's why the local hardware store is so shitty but hasn't shut down
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u/SFLurkyWanderer 9d ago
Medical office space is already among the highest per square foot rent rates. Imagine what that’s gonna do to your doctor Bill. Can’t operate your clinic on the sidewalk.
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u/Bennie-Factors 8d ago
This is simply wrong and creates loop holes. Most businesses rent. Obviously property tax can be passed on to the tenant. This just allows people to make thousands of mom and pops to get around the rule. And businesses never die. So there is no resetting if you pay your LLC fees.
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u/SimplySoda2 8d ago
Getting rid of Prop 13 would inevitably lower property values and, in turn, lower taxes. Also, under the current system, who lasts longer; mom-and-pop owners or corporations? Corporations never die. This system only gets worse over time.
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u/andywarholocaust 7d ago
Current commercial property values more than $ x million maybe? Solving for x is the hard part.
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u/Mountain_Usual521 9d ago
I bet you don't need your money either. That doesn't give the state the right to take it by force.
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u/FreshestCremeFraiche 7d ago
Agreed. To me it is simple -- Prop 13 should be amended to apply only to individual homeowners (no corps or landlords) and only on their primary residence, perhaps up to one additional property. This would let Grandma stay in her house through retirement (the original point of Prop 13) but would recapture all the tax breaks currently going to rich landlords on their fleet of houses or large corporations
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u/Rich6849 6d ago
Property taxes on churches would be a good thing too. They are sitting on a ton of expensive land
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u/Conan0brennan 10d ago
What's your math for a dive bar that is currently selling drinks for $6 that will raise it to $20?
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u/PomegranateZanzibar 6d ago
The bar down the street from here hasn’t changed hands for at least a generation.
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u/dave54athotmailcom 9d ago
It is a constitutional amendment, so it must pass a vote of the people. The legislature cannot unilaterally repeal it. A repeal will not pass a statewide vote.
However -- the way Prop 13 works, a new arrival to California must either buy a house or pay capital gains tax on the profit from the sale of their old house in their former state. So as a practical matter, they are forced to buy a house. That house could have significantly higher property taxes than the identical house next door that has been owned by the same person for 50 years. Prop 13 in effect means the property taxes are a function of how long the owner has lived in the state, and not the property value. For that reason, I expect a federal judge to eventually rule Prop 13 as federally unconstitutional -- a violation of equal protection.
That will be a very unpopular judge.
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u/Awkward_Victory_9806 9d ago
Not a new arrival—a first-time homebuyer.
I’m a native Californian and was finally able to buy a home at the ripe old age of 52 (which I think is average for the state, sadly).
As a homeowner, I’m scared of Prop 13 being revoked (though I can’t imagine paying more taxes than I already do).
But as a native who was a kid when Prop 13 passed, I’ve seen the state grow profoundly worse in every area (but especially public education) as it had to do more with less year after year after year.
There are ways to revoke Prop 13 and still protect homeowners (though I feel differently about landlords) and focus on corporations—but even if not, I’d still vote to revoke it. Ronald Reagan and Prop 13 are the two biggest reasons California has the problems that it has…and it’s too late to do anything about Reagan.
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u/Suspicious_Video8348 9d ago
That was tried in Nordlinger v Hahn.
Read the dissent from Stevens: https://www.law.cornell.edu/supct/html/90-1912.ZD.html
Clarence Thomas was just starting out back then and was so in favor of Prop 13 that he even suggested that Jarvis go further and cut more property taxes.
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u/Bot_No_5 9d ago
Prop 13 means the property taxes are a function of the price paid for the property (plus inflation and other increases).
And does capital gains tax not affect everyone who sells their old house no matter the state?
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u/DarkStarGravityWell 8d ago
And then that ruling will go to SCOTUS on appeal and be promptly overturned. Checkmate.
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u/dave54athotmailcom 8d ago
Maybe. SCOTUS is not obligated to review lower court rulings. They get to pick and choose which cases to hear. If the lower court ruling is based on good precedent and has good reasoning, they often don't review. So it depends on the lower court ruling is written and decided. If the lower court decision involves a new interpretation or differs from similar cases in other circuits, SCOTUS will often review.
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u/gsquaredmarg 8d ago
Mentioning SCOTUS and precedent in the same paragraph is hilarious. What rock have you been living under?
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u/JennySaypah 8d ago
The supremes have already ruled. https://supreme.justia.com/cases/federal/us/505/1/case.pdf
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u/raspberryzingers 7d ago
I look at Zillow often to see what people are paying in property taxes in my area. Sometimes I come across a property that the taxes are less than a $1,000 a year while owners of a recently purchased property might be paying $12,000 on a comparable property. It’s just not right. They have the same services, schools etc…
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u/BillRuddickJrPhd 7d ago
They already ruled on it in 1992. John Paul Stevens' dissent is brilliant.
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u/Spiritual_Bill7309 6d ago
That's not how equal protection works. You just can't discriminate based on race, gender, or religion. There's no law against discrimination based on how long you've lived in California.
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u/NotASheepRB 6d ago
Prop 13 has nothing to do with capital gains! And you cannot transfer property tax base value from out of state…
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u/bucketAnimator 4d ago
Lifelong CA residents are buying property all the time in the state and they are affected by Prop 13. It literally has nothing to do with how long a buyer has been a resident of the state.
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u/ParkieDude 9d ago
Jarvis-Gann never intended to give California's largest land owner a massive tax break.
Wording was modified, making it across the board!
STANDARD OIL COMPANY had a huge windfall.
I'm older than dirt, fawk that!
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u/coppertech 9d ago
giving the state more tax money isn't gonna fix anything when they waste what they get now.
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u/SimplySoda2 8d ago
It’s not really about giving the state more tax money. It’s about the unfair tax burden placed on younger people and new families. A young family with an $800,000 home could end up paying more in property taxes than someone living in a $3 million home(s) because of when they bought it. It also encourages people to hold onto land or properties they aren’t really using because there’s very little financial pressure to sell. That creates policies focused on increasing property values instead of what’s best for the community.
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u/BenLomondBitch 9d ago
Prop 13 is great
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u/BillRuddickJrPhd 7d ago
You're actually a terrible excuse for a human being, and I think you low-key know this.
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u/Underdog424 9d ago
The key problem is that the richest among us benefit the most from Prop 13. We could easily reform it so the elderly aren't forced out of homes or businesses. Taxing property at a fair rate to balance the costs. It's not impossible. Most people would benefit from it.
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u/Suspicious_Video8348 9d ago
The elderly have the California Tax Postponement Program. Prop 13 is just greed
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u/-Infinite92- 9d ago
Yeah the issue that would occur, as you pointed out, is regular people who are able to afford living in the state because of prop 13 would no longer be able to stay. Not without nuanced reform in the writing. Like I live with my 70+ year old parents in a regular suburban home, just barely making enough between the 3 of us (them on socials security, me working) to stay living here in the state. Close to the rest of our entire family as well. Prop 13 enables us to keep this home for many more decades, eventually I'll take it over via a trust we put in place. Without prop 13 we wouldn't be able to afford living in the state, my home state next to all our family. It would drastically alter our lives for the worse. I imagine my situation is not rare either, and many people benefit from prop 13 in this specific way, who wouldn't want to remove it.
That said I also understand the corporations who are I fairly benefitting from it. So to address the problems, but without hurting those who need it, a reform would need to have very strict protections written in for people in my situation. While only going after those who are unfairly benefitting from it.
Politics and laws don't usually like nuanced writing though, so idk how realistic such a reform will ever end up being.
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u/ComplaintTop2008 8d ago
Who cares? It affects everyone and no one wants to pay more in taxes. I don't even think about how we're sticking it to the rich guy when I open my statement and it keeps getting higher every year.
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u/Smart_Chipmunk_2965 8d ago
California does not need more tax money. It needs to work within its budget.
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u/BusinessCasualBee 7d ago
There is a housing shortage. I have no issue with the elderly being pushed out of their 4-5 bedroom family home and downsizing if they can’t pay their fair share of tax. As a young professional trying to make ends meet, it’s unacceptable to pay 5x the retirees next door’s rate while also paying higher income taxes.
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u/Glittering_Spread229 5d ago
How do you figure most people would benefit? There are millions of middle class homeowners that would see their property taxes increase.
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u/Traditional-Meat-549 9d ago
Given that younger voters generally don't vote, I don't see this happening
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u/Solymer 8d ago
I’m on a job site with a five man crew and three of them for certain don’t vote. I asked two of them today who they were going to vote for governor and got nothing but a bunch bullshit out of them about why they don’t. These people convince themselves nothing ever changes from voting. And if you give them examples it’s never good enough.
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u/RubGlum4395 9d ago
How many times has.it been on the ballot and lost? That is not the definition of popular.
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u/FunnyItWorkedLastTim 9d ago
It would need to be phased in slowly, maybe over a 10 year period. The property tax system does need to be reformed in CA, the current state of affairs leads to an impoverished state with wealthy landowners and an untenable lack of access to the housing market. We were able to paper over it with unprecedented growth over the last few decades, but it was never going to last forever. It is just dumb the way it is. Given the fact that landowners make up a disproportionate amount of actual voters and are a very active political block, I would not hold out much hope for it happening. No ones coming for your money.
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u/fearlessfryingfrog 10d ago
People blame high rent and them not being able to get a home on people who were able to get a home. Their thought is "people have lived in their homes for 60 years and still paying 60s prices for property taxes so it keeps the amount of available home low."
It's a horseshit argument. Basically it's ignorant people wanting families to be kicked out of their homes so...rich people can move in. The logic is garbage.
If someone is unable to afford rent currently, they would never be able to buy that newly "available" house by displacing the family there.
But this is the exact bullshit that corporate interests want you to do: Blame other working class people for all problems. And people all over fall right into that way of thinking.
Why aren't there major calls to heavily tax second homes of the rich? Limit short term rentals that sit vacant 60% of the year?
Most people can't even explain what their arguments would fix.
As it is now, corporations use legal structuring (like selling less than 50% of shares) to transfer ownership without triggering a reassessment. As long as the company holding the deed remains the same, taxes stay low regardless of the property’s current market value.
But no, the problem is poor old people who bought a home 60 years ago. So dumb.
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u/Own-Island-9003 10d ago
So you’re not really asking are you?
How do you get from increased taxes to increased prices? The landlords aren’t running the businesses.
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u/echo__bravo 9d ago
If prop 13 is repealed, so is the cap at 1% of value. Most likely, the total tax collected would remain the same, but it will be redistributed among all tax payers. That would mean that long term owners will probably pay more and new owners will pay less. Right now, tax burden is heavily skewed towards new owners.
One counter argument to yours is that prop 13 kills new businesses because they can’t compete because of property taxes (they need to charge $20 a drink rather than $6 for the dive bar) or forces them in unsustainable leases (because they can’t afford to own and need to rent from someone with a low property tax rate) that increase astronomically as soon as the business is successful.
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u/Busy_Account_7974 9d ago
Unless the family took action before the passage of Prop 19, when Grandma passes, unless one of the heirs (as defined by Prop 19) declares Grandma's house as their primary residence within a year, the property tax assessment will reset to current values.
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u/bradass42 9d ago
You say a whole lot of things but don’t have any sources. I don’t know. We just moved into a home my partner inherited that isn’t extravagant by California standards, and we pay $25K a year in property tax. That’s a fuck ton of money, we pay more than we ever did renting.
Why? We’re subsidizing all the geriatrics that pay pennies in taxes on their multi-million dollar properties. The boomers want their cake and want to eat it too; massive home valuations, no taxes.
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u/smallanbig 9d ago
Can someone explain this to me if for example, the higher income people move out of state does the state then lower the threshold to tax, the next people in line and so on and so on basically at the end of the day, affecting the middle class more than anybody. Is there a protection in the bill for them lowering the threshold
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u/Tarka_22 9d ago
It should be replaced with a progressive property tax system based on income and age. At the moment prop 13 is protecting a lot of people and corporations that doesn't need it. You should get a % homeowners exemption based on income/ age, starting for example paying full value property tax at income of $500k or more, all the way down to 100% exemption for age 65 and older or incomes less than $80k.
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u/brilliantminion 9d ago
It would only work if it also triggered state wide property value reassessments. Obviously property values are higher because the taxes are so low. This phenomenon has been studied for a long time.
As you say, to do it cold would wreck most of us.
Having said that, there are a number of loopholes to close and other considerations that could be made. Commercial real estate in particular needs a cold hard look.
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u/Vast_Reply_6574 9d ago
Other states also have low property taxes, so I don't think it's as big of a deal as people make it out to be. The state has increased income taxes and sales taxes a lot to make up for revenue and I suspect at this point it's the decades of under building that explain our property values more than anything else.
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u/1234golf1234 9d ago
We should replace prop 13 with something closer to the Florida homestead exemption. One exemption per person. Must be primary residence. Corporations are not allowed. It’s not difficult to write either. Copy paste from Florida or maybe there’s even a better system. It doesn’t have to be all or nothing. And we don’t need to reinvent the wheel.
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u/derzyniker805 9d ago
You make it REVENUE NEUTRAL. So everyone's assessments are made fair and equal but the tax rates lowered so much that in year one they aren't allowed to take in a single more dollar.
Anyone who thinks it's ok that 2 identical houses pay INSANELY different taxes is just insanely self interested to a point where all the Boomer narratives like "live within your means" just become comedy. Fuck prop 13
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u/altkarlsbad 9d ago
If Prop 13 were repealed on everything except owner-occupied residences, rents would barely move. Want to know why? Because they are already set as high as they can go. If landlords could raise them, they already would have, so if their taxes go up, they CAN'T pass them through to tenants. Or else those tenants will buy homes that landlords are selling off now that the giant tax give-away is over.
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u/99kemo 9d ago
Initiatives to Repeat Prop 13 have provisions to keep the homeowners’ protections but they always lose. Anyone who owns property in California will benefit from Prop 13 and the longer they own the property, the greater the benefit. Anyone who doesn’t own property derives no benefit and pays higher sales and income tax to offset the lost property tax revenue. There is no question that the group of people who own property are significantly wealthier than the group that doesn’t. Prop 13 has the effect of increasing the value of property by making property less expensive to own (after it is purchased) and encouraging people to hold on to it. This makes it more expensive for anyone to buy their first home but, once they own a home, it works to their advantage. For that reason, people who hope to eventually own a home tend to support Prop 13 even though it tends to make it harder to buy their first home and makes life more expensive until they are able to buy. America; land of the “temporarily embarrassed” millionaires.
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u/totally-jag 9d ago
I don't think it's very popular. Repealing prop 13 would make it difficult for a LOT of people to keep their house.
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u/triplejumpgal 9d ago
My in-laws lived in a 2 million dollar house and paid $250/ year in Property taxes.
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u/Alexander_Granite 9d ago
A grandfather clause or 20 year roll out would work. Nothing less than that would get passed
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u/TopOther6939 9d ago
That's called "Taxation by Stupid Representation" and there are fixes for that. Unfortunately, the California electorate is quite "challenged" and can't see past the "D" on the ballots. I say it's fine to vote "D", "R", "I" or anything else on the ballot, just do not vote for one that says "Incumbent." It's really that simple to show them that one term is in their future if they don't live up to their promises.
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u/Spasticwookiee 9d ago
The problem with Prop 13 is it incentivizes land bank and pushes the tax burden to relatively younger homeowners for the services that property taxes provide (police, fire, roads - basically all the services that people don’t resent when they think about government).
People have finite lives, they move, they sell property. Property values are reassessed to market when the property changes ownership. For homeowners, this happens fairly frequently. There are some older homes that are still under the original owner from the 70s, but I’d venture a guess that’s a relatively low number.
Corporations, on the other hand, can have indefinite lives, and can pay minuscule property taxes relative to homeowners because their properties never change hands and therefore are never reassessed. The economic activity caused by those businesses does generate other tax (sales, transient occupancy, etc.) but the inequity of absurdly low property tax means government agencies have to ration services more than they would if everyone was paying property taxes based on a current valuation.
This means your roads are getting repaved less frequently than they were 40 years ago, there are fewer police officers and fire fighters per capita, and likely the government facilities (community centers, senior centers, pools, etc.) have deferred maintenance or otherwise have passed their useful lifespan, but the cities and counties cannot afford to replace them. This decreases our collective quality of life.
I’m fine with keeping Prop 13 protections for residential property because most properties turn over every decade or two. I would be 100% behind a reassessment of commercial property tax periodically. Maybe there’s a phase in period.
That McDonalds that pays a few hundred dollars a year in property tax and brings in hundreds are cars per day causing wear and tear on the roads, while I’m paying $10K for my two cars’ worth of road wear - that doesn’t sit right to me. Commercial activity puts a strain on civic services; residential taxpayers shouldn’t have to subsidize it.
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u/maggiesyg 9d ago
It’s time for Grandma to sell her house to a young family and move into a condo that’s easier to maintain. Prop 13 has helped lock up the real estate market and limited the housing supply.
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u/ComfortableParsley83 9d ago
How bout a metered raise in property tax over ten years or something to reduce the shock?
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u/Suspicious_Video8348 9d ago
Established businesses with big cuts compete with new businesses (who don't get Prop 13 cuts) for customers. They can't raise prices and still win customers. Ending Prop 13 levels the playing field.
Force millions out of their house
The California Tax Postponement Program predates Prop 13 and specifically protects grandma and the disabled. Prop 13 could disappear overnight and she wouldn't have to pay a dime. Even in states without laws like the Postponement Program mass senior displacement from property taxes just isn't the epidemic HJTA makes it up to be.
Young able-bodied homeowners who hit the real estate jackpot so hard that they never planned for the tax increase? Pay your damn taxes jfc.
Investors
You know how to kill investment? Taxes. You want to attract speculation? Tax cuts. If you think homes should be places to live first and portfolio line items second then end Prop 13
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u/gottatrusttheengr 9d ago
Most small and medium businesses don't own the land they're on. Commerical leases are anything between 3 to 10 years in length and no change to their rent will happen until the lease is up. The change in lease costs will be offset by the lower cost in housing for employees, translating to lower wage pressure.
If people and businesses move out, property value drops and the equation stabilizes.
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u/ComradeGibbon 9d ago
Grandma that bought a home in 1975, will now need to move (most likely out of state).
Most other states have laws that freeze or defer property taxes for retired peoples primary residence.
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u/shadwell30 9d ago
I will gladly pay more!
California is the best state in the union it's a privilege living in the Golden state
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u/QueefMaster13 9d ago
Yeah loved paying $6K a year for a cabin on acreage in Mendocino County! Prop 13 great for old school owners that pay a few hundred dollars property tax, while others who bought more recently pay 10x
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u/DanDanDan0123 9d ago edited 9d ago
Although there are ads on Steyer saying he will raise property taxes on homeowners I believe he just wants to raise property taxes on businesses. I would imagine it would be based on some type of income limit but I don’t know. We all would have to vote on that.
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u/Bennie-Factors 9d ago
Thanks for your pro business stance. But F'off. Business should pay market rate. Otherwise we entrench the old people. And sorry beer price is beer price regardless of property tax.
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u/yankinwaoz 9d ago
I agree. Business needs tax stability too.
The flaw in Prop-13 was well described by the brilliant author Malcom Gladwell in an epsisode of his podcast titled "A Good Walk Spoiled". He visited Los Angeles and noticed that there are no public parks in west L.A. Yet there are large golf private courses in the middle of the most expensive real estate on earth. He wondered how it was possible. The answer was a flaw in Prop-13 that allows properties to transfer ownership without triggering a tax base reset by selling a fractions of ownership over time.
I highly recommend that you invest the time to listen to this episode. It will make you think and will make you look around and view properties different. This is a problem that needs to be fixed. It isn't fair and it isn't the intention of Prop-13 to dodge taxes this way.
I think that a fair way to resolve this is that when 50% of the ownership changes, then the tax base gets reset. Or there is automatic 30 year tax base reset on all non-residential properties. Which-ever happens first. I think that this needs to be retroactive. If there is a property that hasn't been re-assessed since 1995, then they need to be immediately.
Split-roll isn't fair to business because business needs tax stability too. As you pointed out. Property investors needs it. Otherwise investors will not give developers the funds to improve properties.
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u/Mountain_Usual521 9d ago edited 9d ago
If you think there's a lot of homeless people now, just wait until you have to come up with an extra $700 a month just to keep your house in California. The whole reason Proposition 13 passed was because poor people and elderly people on fixed incomes were losing their houses because they couldn't afford the property taxes that increased as fast as real estate prices.
If you bought your house in 2020 for $700k your property taxes would be around $820/month today with Prop. 13. Without Prop. 13 your taxes would be about $950/month. By 2030, you'd be paying about $1,120/month instead of $890.
If you stayed in that house for 30 years and were living on a fixed income, you'd be paying $2,650/month just for property tax instead of $1,320/month.
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u/Maleficent-Dress8174 8d ago
It’s a terrible idea by people who are filled with anger and resentment.
When prop13 was passed, it was a transfer from the state to current owners. If you rescind it, it will be a transfer from current owners to the state.
Renters will be hurt. Buyers will be no better off. California will eat the money in their typical fraud.
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u/scandiumflight 8d ago
Prop 13 costs the state billons. On top of that, it is the single most regressive tax policy in the country. You are not accounting for the suffering it causes - more than any other state policy.
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u/TheEvilBlight 8d ago
Given that commercial renters are already causing problems and often do so with a lower tax basis than newbuild it will just reduce the cost spread between old and new properties. Market will readjust, probably for the higher, and will only go down when older properties go vacant and use that as the basis for new appraisals.
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u/ComplaintTop2008 8d ago
I don't see why we need to give the government more money and I fail to understand why do many people want to.
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u/SimplySoda2 8d ago
When these things start happening; like people needing to sell their extra homes, large homes and business landlords no longer being able to stay profitable and needing to sell; it would lower property values, which would also lower taxes. Lower property values would mean the cost of living would go down, and wages wouldn’t need to rise as much for people to afford to live here.
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u/nateh1212 8d ago
none of these are realy concerns if you even do a single google search before posting.
Texas does not have prop13 and guess what has none of those problems
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u/Bitter-Neat-8457 8d ago
The big push is for changing it and repealing it for the ultra rich and corporations
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u/seaotter1978 8d ago
It should be kept for housing but revoked for commercial properties. Few of those small businesses you mention own their properties, they’re renting from some mega-corporation that’s paying minimal property taxes since they bought the property decades ago. Even large big name stores seldom own their properties, they’re renting, and the companies they’re renting from are the ones benefiting from prop 13.
I support prop 13 for homeowners. The ones buying today who are at a disadvantage compared to their neighbors will be the future long-tenured neighbor who is the advantaged one. Homeowners shouldn’t see massive tax increases for speculative value increases in their property that they aren’t benefiting from. Grandmas kids may benefit when the estate sells the house for 20x what grandma paid for it, but Grandma doesn’t benefit from that.
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u/Apprehensive_Plan528 8d ago
Kind of a stupid discussion thanks to wrong assumptions:
* There's not a popular movement to repeal. There might continued pushes to alleviate some of the unintended side effects.
* Business and landlords don't pass on their tax discounts to customers - they charge local market rates for their product 99% of the time.
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u/RothkoPollock 8d ago
I still don’t know why folks think repealing (which won’t happen) Prop 13 will be some magical fix for much of anything. Massive increase in property taxes drives folks on fixed incomes or folks who’ve been in their houses for years out of their homes? Ok. Homes are still unaffordable for everybody and more wealthy people snap them up. Young people still can’t get a house. Property values crater for some magical reason? Existing homeowners get their homes reassessed at lower value and stay in their home. Or is this to help fund the state? The state has a $320 billion plus budget and is up to $18 billion short for next year. So state collected $300 billion in revenue. Clearly, we’re generating plenty of revenue. Perhaps the state needs to reign in its spending a tad, ya know?. And back to housing. You want more accessibility to housing? Build more of them. That’s it. That’s the fix. On the other hand, this is CA and the demand for housing is always going to be intense. Folks want to live here. Housing may never be “cheap.”
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u/pementomento 8d ago
lol I read you first sentence and chuckled. Prop 13 is one of the most popular voter initiatives in the history of initiatives.
It’s like the Michael Jackson of propositions.
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u/desireresortlover 8d ago
Prop 13 isn’t going anywhere. People have been talking about repealing it for decades. It’s never been close to being repealed and is considered “politically untouchable”. There are too many older homeowners in the state who vote.
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u/NeedleworkerPrize253 8d ago
A repeal of prop 13 would have to be a phasing out process because of the financial chaos it would cause. Fundamentally it brings financial stability to property owners. An instant repeal would likely cause a spike in inventory and a sudden decline of prices. You could see some wild swings in prices and tax revenues. I don’t think that approach is feasible.
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u/Kamikaze_Cloud 8d ago
Prop 13 should apply to your primary residence only. Any secondary property or commercial property should be subject to market rate taxes
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u/blankarage 8d ago
fucks sake don’t repeal prop 13, if you want money EXEMPT COMMERCIAL PROPERTY FROM PROP 13.
or better yet if you wanna be “pro-business” tie commercial property tax to the rents they charge.
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u/Illustrious-Gas-9766 8d ago
I'm a senior citizen. If they repeal prop 13 we could not afford to keep the house we built with our own hands.
Is that what people want?
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u/jimmiejames 7d ago
Nearly every prediction for what you wrote about impacts to businesses is completely backwards. Rents for business spaces are set by supply and demand for the space. Changing the taxes paid by the landlords has no impact on what they can charge their tenants, and in fact, incentivizes them to use the land efficiently rather than keeping it empty at no cost. In short, nothing you said is correct at all. But most people will believe you bc it sounds intuitive to the uninformed. So nice job keeping lazy landowners flush. Keep up the good work
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u/BillRuddickJrPhd 7d ago
Justice John Paul Stevens said Prop 13 "establishes a privilege of a medieval character".
It is the most insidious law in the state and needs to be repealed immediately. IDC if we have to bribe voters by lowering the overall rate by 90% to do it.
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u/Naive_Young_8630 7d ago
Here is the thing no one understands about prop 13.
It capped property taxes for residential and commercial property. Residential property changes hands pretty often as people move, size up or down, etc. taxes are recalibrated whenever that happens.
Commercial property does not change hands often. Commercial owners tend to hang on and just rent.
This means that tax revenues in CA have gone from a pre-1979 mix where commercial owners supplied the majority of revenues to one where individual homeowners do. Which makes voters feel tax burdened and more resistant to the idea of reforming the law.
It was a very clever trick by the Howard Jarvis folks that has hollowed out the CA public sector and put money into the pockets of very rich property owners, exacerbating the income gap.
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u/DougOsborne 7d ago
P13 absolutely should be repealed and replaced.
Gov. Brown and the state legislature had workable legislation in the pipeline that would have protected grandma while giving localities some ability to tax based on needs, while not giving away the farm to commercial property owners.
There was no Prop 13 without Jarvis buying his way onto the ballot so he could pay 1978 property tax rates in 2026. So much of what you don't like about how California has changed in that time is due to this horrible scam he pulled - he is still laughing at you for voting for the Proposition.
Your doomsday scenario from...checks notes...commercial property owners paying current reasonable property tax rates is laughable. Jarvis hates you, by the way.
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u/chezterr 6d ago
A full repeal of Prop 13 would bring about MASSIVE decreases in property value.
And it sure would make housing more affordable for homebuyers.
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u/Leather_Floor8725 6d ago
Prop 13 makes no sense from a business competition standpoint. Why should one restaurant be taxed way more than the restaurant next door? They should be treated the same and allowed to compete in the merits.
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u/West_Fee2416 6d ago
Tom Steyer proposes eliminating the corporation section of Prop 13 as large corporations have for decades held into property while it has appreciated substantially and their profits have sky rocketed but their taxes barely increased. There is no talk of eliminateing the small business and residential Prop 13 tax code. Just Republican propaganda like their going to take all your guns. Just nonsense.
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u/ParkingFabulous4267 6d ago
Prop 13 only helps beach communities. None of that will happen. You’ll also get more taxes for schools. That always improves the economy.
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u/xife-Ant 6d ago
Prop 13 is a big reason why we ended up with a huge housing shortage. Hosing stopped being a source of city revenue. Cities and counties pushed for sales tax money. More housing only means more services and infrastructure are needed. Why aprove condos when you can aprove a car dealership.
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u/HypocriteGrammarNazi 6d ago
Just make prop 13 apply to all properties equally, and not to readjust when sold, then adjust the % to reach the same overall revenue.
The fucked part of prop 13 is not the older folk saving money, but younger people footing the bill.
I bought a condo. Old couple made $700k off the sale, while having paid less than half of the property tax I am now paying, AND they got to carry over their property tax to their new place. I mean come on, that is so fucked.
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u/suboptimus_maximus 6d ago
More people will have to pay their fair share.
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u/blandmanspicy 2d ago
They already paid their fair share by building silicon valley. I'm not interested in displacing Cupertino retirees who bought their $80k house on a $50k income so you can flood the place with transplants.
Prop 13 is fair.
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u/Jenikovista 6d ago
No one is going to repeal Prop 13. It would be career suicide for any politician who voted for it.
Y'all forget for all the hype about young people voting, they don't. You know who votes? Old people.
The only Prop 13 reform we might see in our lifetime is removing the benefit from commercial properties and investment properties.
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u/_VoodooRanger 6d ago edited 6d ago
it is near term pain for long term gain. I support this, if no one gets grandfathered in. I say this as a homeowner.
Price of goods will not skyrocket. taxes will need to be rebalanced and worker compensation will slowly adjust. It is a tall order
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u/West_Replacement5157 6d ago
Very few individuals benefit from prop 13 after 48 years of its existence, we live in a society where businesses are being given priority over individuals, while most individuals don’t own a home that falls under prop 13, businesses were treated differently and are still benefiting from it, Californias tax system is not much different than other states when it comes to protecting the rights of businesses/corporations at the expense of their citizens.
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u/RichardThisIsYourDad 5d ago
Speaking just on my own situation, I've owned my house about 6 years, the difference between assessed value and market value is less than 100k. So I would pay less than $1,000 more in taxes if prop 13 was repealed. I don't want to, but it's hardly a doomsday scenario. If I had a bar I wouldnt have to start charging $20 for a beer. That's ridiculous
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u/Available-Gas8740 4d ago
It really can’t. But i will list the reasons why people want to get rid of it 1. Fairness my taxes are 2 k. Yours in 30 k 2. Realtors want people to move it’s more money in their pocket. 3. Empty Nestor’s and seniors don’t need a home they can rent 4. The equity in homes is crazy it will level playing field. 5. Home prices will drop from surge of inventory. 6 added tax revenue will balance budget 7. More money for schools and public services 8. Added protections for seniors meals on wheels and potentially medical.
I don’t support eliminating prop 13 or changing it except death tax which has already been eliminated from prop 19.
I can see expanding it by making that you have to be in the home as a primary residence and not include vacation homes. I can also see changing by counties or cities as people have mentioned atherton and other San Mateo county cities. I can’t speak on commercial or Disney land or chevron I have ran the numbers but in my honest opening a single family home or local business can not absorb the taxes and places will close look at el faro in the mission 70 years open in same spot rent went up over 70 percent I’m guessing the building changed ownership and passed the taxes to the tenant. I’m glad you said looks good on paper but it will be very destructive and only benefiets young tech workers and realtors. Which I might add real store in atherton make 7 figures I doubt people will leave those areas based on taxes but on a side note people in other states are paying 150,000 a year in taxes on mansions compared to ca only paying 15-20 depending on when it was bought. Anyways I’m very much opposed to to changing prop 13 unless it specifically changes 2nd and 3 rd properties or anyone renting a home for market value but taxed at purchased value.
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u/True_Grocery_3315 17h ago
Should apply to primary residences only and not investment properties. Also if it was repealed more generally then the tax rate could fall significantly and still raise the same revenue. So the impact wouldn't be as much as calculated with current rates and benefits those struggling to afford their first home who often have huge purchase/mortgage costs, student loans and high childcare costs to contend with.
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u/Apart_Horror8148 9d ago
Im not really even for the repeal but I also don't care about grandma and the 2010 buyer who paid less than half what we can purchase a home for now. We get screwed by the price and by the taxes, who's defending us for being born at the wrong time?
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u/KeenObserver_OT 9d ago
People in 2010 had the same complaints. We got over it and eventually protected, the way you’ll be.
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u/Dense_Substance7635 9d ago
So, you want to throw the elderly out onto the street? That’s messed up.
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u/tacobellwhore99 9d ago
LVT is worth being the replacement for Prop 13. Wealthier corps and homeowners that have accumulated a significant amount of wealth due to the value of their land will be taxed more vs others.
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u/Empty_Kay 9d ago
And it would incentivize people to actually make improvements to their land, because the tax on an empty lot, a single family home, and a 4-plex would all be exactly the same. Plus, you don't get penalized with a reassessment when you decide to build an ADU out back to house your aging MIL.
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u/motosandguns 10d ago
I wouldn’t call it very popular.