Beyond the Global Health Crisis: California Proposition 15
Third Quarter 2020
November Initiative Has Potential to Raise Taxes Dramatically; Split Roll Tax Would Have Significant Impact on Commercial Real Estate
Initiative is the largest proposed tax increase in California history. Proposition 15 would require counties to reassess most commercial properties every three years and be taxed at market value rather than purchase price. Estimates of proceeds from the new tax structure range from $8 billion to more than $12 billion and funds would mostly be distributed to local communities and school districts. In November, voters will decide whether to separate commercial and industrial properties from previous tax protections passed in 1978. Current law limits property tax to 1 percent of assessed value in 1976 and increases can be no greater than 2 percent each year. The largest benefit to property owners is a lack of reassessment until a change in ownership.