Proponents and critics of Proposition 5, which will be decided by California voters Nov. 6, agree that the property tax transfer initiative is a symptom of a statewide housing shortage. They differ on whether the proposition can fix that.
Santa Clarita Realtors are advocating for the reform measure, which allows homebuyers age 55 and older and the severely disabled to transfer their tax assessments from a prior home to a new home, no matter the new home’s market value, location or number of moves.
Prop. 5 expands protections for Proposition 13, the law that helps property buyers estimate their future property taxes by fixing property tax rates according to their assessed value at the time of the purchase.
Nancy Starczyk and Bob Khalsa, who sit on the board of directors of the Southland Regional Association of Realtors, were part of the local push for the initiative. The measure garnered enough signatures to make it onto the November ballot, with support from state and national Realtor associations, Starczyk and Khalsa among them.
Khalsa said if a new home a senior is moving into is of a different value than the prior home, the initiative would also allow for an adjusted value between the old and new values. It ultimately would give them more freedom in purchasing a home, putting them less at the mercy of market rates, he said.
Current law only allows one property tax transfer for most counties. The fiscal impact to local governments, and the services they finance, has been cited as the largest impact by critics, who’ve cited a loss to such entities in the hundreds of millions, statewide, if the measure passes.
“Schools and other local governments each probably would lose over $100 million in annual property tax revenue in the first few years, growing over time to about $1 billion per year (in today’s dollars),” according to a report from the Legislative Analyst Office on the measure, which also noted a “similar increase in state costs to backfill school property tax losses.”
“We feel that this is very beneficial to our senior citizens and wish to see Prop. 13 expanded and made easier for seniors, primarily because of the financial burden that hits this facet of our population,” Starczyk said. “I think it’s a big win-win to allow seniors to do this and make room for new families. We have a lot of buyers for whom we need to free up properties and allow families to move in. A lot of seniors have homes that are too big for them.”
The Realtors said the impacts of Prop. 5 would be that seniors could move to smaller homes in a changing market at no risk and make room for newer families.
While they said Prop. 5 was necessary, both Khalsa and Starczyk agreed the shortage of housing influenced property prices, making it harder for seniors to switch.
That was part of the argument against the measure, according to the ballot statement against the measure.
Opponents said it would do little to help the many seniors out there who are struggling in the midst of the statewide housing crisis.
“As a retired teacher, I’m worried about paying my mortgage and holding on to some of my retirement to help my kids,” said former elementary school teacher Melinda Dart, in the ballot statement available at voterguide.sos.ca.gov. “Prop. 5 isn’t going to help me at all, and they shouldn’t say it will.”
In California, the deadline to register to vote for any election is 15 days before Election Day, which is Tuesday, Nov. 6. A registration must be postmarked or submitted electronically no later than Oct. 22.
