You may have read recently about the proposed Prop 13 split roll tax. This split roll doesn't change tax structures on homeowners. But the initiative changes the way the state taxes commercial property. If you are unfamiliar with the proposed changes, Allwest Properties, an Orange County commercial real estate firm, wants to keep you updated.
This change is far from set in stone.
Backers of this split roll tax will need to get one million signatures to make sure the effort qualifies for the November 2020 ballot.
What is Prop 13?
Most commercial real estate owners are very familiar with Proposition 13. With additional younger and foreign investors here in California, some may not know what this tax is.
Voters approved Proposition 13 in 1978. This vote regulated taxation of property. Prop 13 states that California property taxes are assessed at one percent of the purchase price. These taxes can only increase annually by two percent or the rate of inflation, whichever is lower.
Californians who keep these properties over the years benefit from the investment. They pay far less in taxes than what new buyers would pay.
What is the Prop 13 Split Roll?
The split roll would keep the homeowner property taxes intact but would change how the state calculates commercial property taxes.
Commercial property owners would face set taxes for commercial and industrial properties, including vacant land, based on their current market value.
Which Property Owners Would be Exempt?
The measure still needs to collect enough signatures to make the ballot. Then, voters would have to approve it in November 2020. Even if it passes, the change would not impact certain commercial property owners.
Those exempt include businesses whose California property holdings are worth less $2 million or operate as companies with 50 or fewer full-time employees.
Need More Answers about Split Roll Initiative?
While this is a fluid situation, we have been operating in Southern California for decades with detailed experience on the changing conditions of the commercial real estate industry.
If you need more answers, give us a call. Allwest Properties, Inc. offers a full range of real estate services for commercial, industrial, and multi-family apartment properties throughout Los Angeles, Orange, San Diego, Riverside, and San Bernardino counties.
With over 25 years of industry experience, we offer a comprehensive suite of solutions. This suite includes sales, leasing, tenant representation, landlord representation, investments, site selection, and consulting services. Our goal is to exceed our clients’ expectations with each and every transaction.
Contact us today by calling 949-287-3291 or emailing firstname.lastname@example.org.