Regarding California’s property tax laws this year, two propositions made their way into the voting elections. However, only one of these regulations got approved, namely Prop. 19. On Monday, 51.1% of voters favored Proposition 19 over Proposition 15. Due to the polling results, the Bay Area’s real estate business may be subject to changes regarding the provisions included in the previously mentioned measure.
Proposition 19’s regulations include two components. First, the approach offers citizens who are 55 years old and above to move their tax valuations to a new house. The previously mentioned statement is also applicable to people who lost their houses due to natural calamities such as hurricanes, earthquakes, flash floods, and the like. If the new home is more expensive than the previous one, homeowners’ tax values of the latest residence would add to the current tax appraisals. Additionally, the proposition can offer house owners two years to sell their present houses and buy a new one, including the permission to transfer taxes thrice a year.
The measure’s second part contains the elimination of house inheritance ability happening from a parent to a child or grandchild without conducting a home value reassessment. However, this piece of the measure does not apply if the house is a child or grandchild’s central housing accommodation. In case the child or grandchild chose to rent the house away instead of living in it, the home’s tax values are subject to re-evaluation.
Since Proposition 19’s official approval from the poll, lawmakers anticipate the plan’s help of increasing house sales within the state by reassuring people’s fear of rising tax bills concerning buying or renting new lodgings.
As of late, family members can turn over houses without the mandatory requirement for property value reappraisal. Additionally, members of a family could also exempt up to $1 million worth of a home’s assessed merit while the process of transferring commercial or rental properties is in progress. The newly approved proposal helps eliminate the previously mentioned concerns about housing.
With the official approval of Prop. 19, the measure would most likely urge real estate owners to decide on the ownership of their homes and chart future housing plans. Once the proposal takes effect, proprietors would run into more complications in the future.
However, the California Board of Equalization has yet to issue a clarification regarding the proposition while real estate transactions are in pending status.
Prop. 19 sets to operate on February 16 of next year. The previously mentioned date includes the implementation of families’ property tax transfer alterations. Moreover, property tax shifts for the disabled, elderly, and natural disaster survivors would apply to start on April 1, 2021. However, present homeowners seeking to take advantage of the legislation would either have to wait or can proceed with it immediately. As a result, several real estate holders should file for property tax transactions on or before April 1 of next year.
The state has yet to certify the proposal results once December 11 arrives. By then, the Board of Equalization can offer additional guidance concerning the new real estate rulings.
Additionally, Prop 19.’s new property tax revenue could help create the California Fire Response, an idea that aims to address the financial need for the state’s local and special districts to emphasize the importance of fire suppression. The plan’s funding would come from 20% of the Department of Forestry’s budget and 80% of the Fire Protection’s reserve.
Meanwhile, the other proposition included in the ballot called Prop. 15 aims to raise at least $3 million on commercial properties’ tax. However, this idea was rejected, with 52% percent of almost 8 million voters choosing “no” for said proposal.