– Crystal Vagnier – Select Group – Writer/Editor
For most Californian’s, it’s an obvious fact that the housing market is unwieldy and overwhelming. The numbers alone for the Bay Area demonstrate that: homes sold between 2013 and 2018 dropped from 104 to 29 while the average price increased from $601,000 to $940,000. Some say this issue is a result of not enough affordable housing to meet the current demand and others suggest that Proposition 13, California’s landmark property tax legislation, is a source to target. This November, Realtors® are hoping to address this less-than-obvious issue.
This 40-year-old Proposition entails a limit of property taxes to 1% of the purchase price of a home and a restriction of a consequent annual property tax increase to no more than 2%. This means that today’s homeowners can pay an extremely different amount in property taxes for a similar-valued home than their new next-door neighbor. This also means that older homeowners hoping to downsize or relocate are stuck in place out of concern for having to pay triple in what would be their new property tax bracket.
A solution that the California Association of Realtors® (CAR) has proposed is Proposition 5, “The People’s Initiative to Protect Proposition 13 Savings,” and will enable homeowners 55 years and older to maintain their current property tax rate when purchasing a new home in any county. Opponents of the proposed bill fear that property tax revenue will drop, reducing the funding for local government and school districts. Meanwhile, supporters of the initiative believe it will help unfreeze the current housing market as well as bring about more sales and listings.
Read more about Prop 5 and November 6th’s ballot here.