If you live in California then the Prop 13 Repeal will be on the ballot in 2020. Please make sure you educate yourself on Proposition 13 and how it may affect you as a homeowner in CA. In this video, we discuss prop 13 and how it benefits homeowners and investors in the state of California and we address the question “Will California Repeal Prop 13?”
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What is Prop 13?
Proposition 13 was approved by California voters in June of 1978 and limits the tax rate for real property (real estate) to 1% of the full cash value of such property. In layman’s terms, this keeps your property taxes from adjusting each year to the value of the home and instead limits the annual increases to a maximum of 2% per year.
What is Prop 13 Repeal?
The prop 13 repeal in California would remove the cap of annual increases to your property taxes on commercial and industrial property causing you to pay a tax rate based on the current value of the property and not a tax rate based on when you purchased the property that is currently in place. The prop 13 repeal will not affect the property taxes on your current primary residence. This will only affect commercial, industrial and investment properties.
Investment properties would fall under commercial property causing investors tax rates on their investment properties to rise to current market values. This will create problems not only for those investors but for the real estate market in general as those investors will likely sell and move their money to another tax friendly state or in-turn they pay higher taxes and make less money per month. Either way, it’s not a good scenario for investment property owners.
Do property taxes go up every year in California?
Traditionally property taxes goes up each year by the allotted 2 percent as long as property values are trending up. Prop 13 restricts more than a 2 percent increase each year.
Do you have questions about California Prop 13 Repeal? If so, please comment below or contact me directly.
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