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Property Tax Break Swap; California Prop 19 Means Different Things To Different Homeowners

SANTA ROSA (KPIX) -- On the ballot this year is a proposition that says it will help wildfire victims and change state property tax policy.

Prop 19 would allow homeowners over the age of 55 to keep their property tax rate for up to three moves anywhere in the state, it will also allow victims of wildfire or natural disaster to transfer their property tax rate for one move anywhere in the state.

Right now property owners over the age of 55 can transfer their current property tax rate to a home of equal or lesser value one time, but they can only do so in the same county or in one of ten counties, Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Mateo, Santa Clara, Tuolumne and Ventura counties.

Santa Rosa city councilmember Chris Rogers is a survivor of several wildfires and a supporter of Proposition 19.

"I get asked all the time why people choose to rebuild in fire-impacted areas," Rogers said.

Many people in his district choose to rebuild in at-risk areas because high property taxes offer them few options for going someplace else.

"Insurance requires folks to rebuild where they lost their homes. and then once they've rebuilt their homes, they have almost the golden handcuffs of their lower property tax values that are there," Rogers said.

When Californians buy a new home their property taxes usually go way up. Property taxes in this state are based on the value of the home when you bought it, so if you bought a long time ago you're paying a fraction of what new owners pay.

"I think that we've got a crushing housing problem in California, and that you have so many seniors who have been looking to downsize into smaller places and they're locked in because of their property tax values," Rogers said.

At its core, Prop 19 is really a tax break swap. It's a break for anyone over the age of 55 with already low property tax rates. It is a tax increase for children inheriting their parents' homes; if you don't plan to live in the home your property tax rates will go up.

"Well, Prop 19 is a billion-dollar tax increase on California families. It talks about wildfires that's what's in the commercials, but what's behind that is a huge tax increase on family transfers of property," said Susan Shelley with the Howard Jarvis Taxpayers Association. "This is thousands and thousands of dollars on a family that has just lost our parent, literally people will be opening the sympathy cards, and one of them will be a new tax bill."

Current law keeps property tax rates low for children who inherit their parents' homes even if the heirs don't live there. Prop 19 would force those children to move into the home or pay higher property taxes.

"This is, it's just a cruel thing to do to California families especially when it isn't being fully disclosed in the commercials that that's what this measure would do," Shelley said.

The Legislative Analyst's office predicts Prop 19 would bring in tens of millions of dollars in state revenue each year. Some would go to schools and local governments, the rest would go to a wildfire prevention fund. Supporters project fire districts could receive up to $99 million in the first year and up to $6 billion over 12 years.

"What this does is it creates a tax break that encourages people to move more often or raise their taxes. So they're forced to sell and both those things generate more commissions for realtors, but is it good policy for California?" Shelley said.

"I think providing some level of flexibility for folks, whether it was fire victims, whether it's seniors or whether it's folks who are disabled makes a lot of sense for California," Rogers said.


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