The coronavirus pandemic has upended so much of California’s real estate, but one matter may remain the same: taxes for property owners are due this Friday, April 10th.
As with many other policy decisions in the state’s coronavirus response, Gov. Gavin Newsom controls whether to extend the deadline, and Newsom has indicated extension prospects are shaky.
“Millions of homeowners in the state are feeling that anxiety coming up April 10. We’re going to see what our options are,” the governor said during a press conference Friday. “But I don’t want to over promise in this space.”
Newsom’s non-action contrasts with an executive order last week to extend the deadline for filing state income taxes to July 15. It also varies from emergency measures putting a partial moratorium on evictions for residential tenants, and partly suspending foreclosures on residential mortgages.
Landlord groups are irate that the governor is not budging on commercial or residential property taxes, and they are pushing for an 11th hour executive order. At the same time, they’re lobbying for piecemeal extensions by some county treasury departments.
“Certainly, as renters struggle to make timely payments to landlords, property owners will find it difficult if not impossible to cover their property taxes on time,” said Tom Bannon, the executive director of the California Apartment Association.
The lack of a uniform tax extension could be attributed to the controversial space that property taxes occupy within the state’s larger political framework.
All commercial and residential real estate taxes have been capped at one percent of a property’s assessed value since California voters passed Prop 13 in 1978, and, per the famous anti-tax measure, county assessors cannot re-evaluate any property’s value unless the land changes hands or is significantly renovated.
It is almost cliche that Prop 13 is a third-rail issue in California, frustrating politicians (and some developers, given the incentive to hold onto property) who hope to reassess parcels in Los Angeles, San Francisco and other areas where values have skyrocketed.
Also, the money that does come from property taxes is predominantly funneled to county governments. “This is not the state’s money unlike a lot of other taxes that are collected,” Newsom said at the press conference. The governor alluded to the California State Association of Counties, which lobbies for county government, opposing a tax deadline extension.
In L.A. County, the total assessed properties are $1.6 trillion, which calculates to about $16 billion in property taxes, mostly to county coffers.
The Los Angeles County Treasurer and Tax Collector released a statement Friday that notes, “We have no authority to extend the April 10 deadline, as outlined by state law.”
“However,” the statement continued. “Beginning on April 11, the day after property taxes are due, people unable to pay on time for reasons related to Covid-19 may submit a request for penalty cancellation online.”
Advocates for extending the property tax deadline are dubious of county-by-county exemptions.
“It could be completely random and unfair who gets an extension if there are no state standards,” said Susan Shelley, a spokesperson for the Howard Jarvis Taxpayers Association.
Added Shelley, “At this moment everybody needs money. The counties are in no worse a situation than the taxpayer.”