California Has an Unfair Moving Penalty
Under current California law, property taxes are set at 1% of the assessed value of the property when purchased. This becomes known as the property’s “tax base.” In addition, the assessed value can only increase annually by 2%. Often, when a homeowner sells their home, they lose this tax base. For seniors and the severely disabled, particularly those that have owned their homes for a long period of time, a move to a new home can mean a massive increase in their property tax base in what amounts to a “moving penalty.” The Property Tax Fairness Initiative protects these vulnerable Californians who are often on fixed incomes and can’t afford large property tax increases by allowing them to maintain a lower, fairer tax base when they need to move.
THE PROBLEM
- MANY SENIORS CAN’T AFFORD TO MOVE
- MANY SEVERELY DISABLED TRAPPED IN INADEQUATE HOMES
- ARBITRARY AND LIMITED PROPERTY TAX PROTECTIONS
Seniors often live in homes that no longer fit their needs because their homes may be too big or too far away from their families. When seniors want to downsize or move closer to their children, they could face property tax increases of 100%, 200%, or even 300%.
Severely disabled people may live in homes that are no longer safe or practical for them. Buying a more suitable home is often impossible because they could face significant property tax increases if they want to move, even if they move to a less expensive home.
The current law requires severely disabled people, seniors and victims of natural disasters to navigate a confusing patchwork of county laws. Severely disabled people and seniors can currently transfer their tax base when they move, but only once and only within their own county or in 11 of California’s 58 counties that specifically allow it.
THE SOLUTION
- GIVE ALL SENIORS AND SEVERELY DISABLED THE RIGHT TO MOVE WITHOUT PENALTY
The Property Tax Fairness Initiative eliminates the moving penalty to protect seniors (55+) and severely disabled people who want to move to safer, more practical homes or closer to their families. This initiative limits the property tax penalties they could face if they purchase another home in any county of the state while still ensuring they pay their fair share of property taxes.
SUMMARY
A “YES” vote would allow homebuyers who are older than 55, severely disabled or who have contaminated or disaster destroyed property to transfer their tax assessments from their old home to their new home, no matter the value of the new home, its location, or how many times the buyer has moved.
Current law only allows eligible buyers to transfer a tax assessment if their new home is of equal or lesser value of their old home and only once per lifetime.
Get more information:
https://www.car.org/aboutus/mediacenter/news/yeson5
https://www.samcar.org/posts/protect-homeownership-this-november-1036.htm