By Brian Johnson
2021 President
Santa Barbara Association of Realtors
What a difference a year makes right? It’s only been just over a year since voters defeated Proposition 15 at the polls and its proponents are back again with a new idea to raise property taxes. Proposition 15, also referred to as the Split Roll Tax, was a proposition on the 2020 ballot in California that sought to remove Proposition 13 tax protections from commercial properties. This would require all commercial properties be reassessed every three years and property taxes adjusted upward at that time. This would have put a huge tax increase onto property owners and commercial tenants, as they are often the ones that pay for property taxes.
In September, a new proposal submitted to California state officials seeks to place a new version of Split Roll onto the 2022 ballot. Titled the “Housing Affordability and Tax Cut Act of 2022” the bill seeks to split the tax rolls differently this time around. Whereas last time the initiative’s backers sought to single out commercial versus residential, this time they seek to pit any property worth $4 million or more vs those worth under $4 million. For properties valued at $5 million or more, an additional 1.2% “surcharge” each year would be added onto the regular property tax. For a $5 million home, apartment complex or commercial property that’s an extra $60,000 per year. For properties between $4 million and $5 million, a formula is used to compute the additional tax. An example would be a $4.5 million property would see an additional $27,000 per year in taxes.