CA Prop 15 – A Non-Political Viewpoint
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Let’s talk a little bit about Prop 15 today. I’ve always promised no politics in my updates, and I feel like this is an appropriate topic because I don’t see it as a political thing. For anyone who doesn’t know, Proposition 15 is proposing that we would split residential properties from commercial properties in terms of taxation.
For commercial real estate, instead of their assessment being based initially on the purchase price, it’s going to be adjusted to marked value for the duration. Of course, that means that property taxes are going up for commercial properties – if this passes.
Why I Don’t Agree
Since I’m in real estate, you can guess what I’m thinking on this… it’s a hard “no” from me. Let’s think it through: the commercials make it sound like it is about closing loopholes for the rich people. I can’t buy into this mentality, especially in this situation.
Follow the money, and the reality is that more than the property owner will be affected. The owner’s taxes go up, so they will pass the costs onto their tenants… then the shop owners and businesses need pass the increased costs onto consumers.
I understand there is a budget deficit, but it seems like there should be another option to find the money. This approach is just going to trickle right through to individuals.
Higher Taxes in a COVID-19 Era?
The notion of doing this right now seems like a bad idea, especially when commercial property owners are getting hit so hard with everything that is going on with COVID. I don’t see how this proposition will pass. But I recently read the results of some polls, and it looks like the data is leaning towards this prop passing.
Of course, this is just my opinion – I’m not being political with this update, it’s just simple math for me. I’d love to hear what you have to say, whether you have a differing opinion or you agree with me. Let me know what you think! Also, don’t hesitate to reach out to me at bprovost@franklinlc.com if you have questions about mortgages or refinancing your home.
Bill Provost
Franklin Loan Center
