Newsom backs ballot measure to raise commercial property taxes

Prop 15 could lead to nearly $4B in additional revenue for LA County; it’s among 3 property-related questions on November ballot

TRD LOS ANGELES /
Sep.September 14, 2020 10:00 AM
Gov. Gavin Newsom (Credit:  Emma McIntyre/Getty Images)
Gov. Gavin Newsom (Credit: Emma McIntyre/Getty Images)

Gov. Gavin Newsom has endorsed a November ballot measure that would increase taxes on commercial property owners.

Newsom called Proposition 15 “a fair, phased-in and long-overdue reform to state tax policy” in an email to supporters, according to the Los Angeles Times. It’s one of three property-related measures set for the ballot this November.

Prop 15 would institute what is commonly referred to as a “split-roll” property tax because commercial and residential taxes would be calculated differently.

The measure would revise a policy instituted in 1978 through Proposition 13. Under current law, commercial and residential property taxes are updated only in the case of a sale.

If a property hasn’t sold in several years, the owner’s bill is often dramatically lower than what it would be if assessments were more regularly updated, reducing tax revenue available to governments.

If Prop 15 is passed, taxes on some commercial properties would be based on the current market-rate value of a property.

The estimated $12.5 billion annual revenue generated statewide would go to schools and local government services. Los Angeles County could see around $3.8 billion in additional tax revenue.

Residential properties would still be taxed based on the value at the last sale. Commercial properties zoned for agriculture would be exempt, as well as properties owned by entities with holdings valued at $3 million or less, according to the Times.

Opponents of Prop 15 said it would “mean increased costs for the same small and minority-owned businesses [Newsom] has forced to close for the last six months” because of pandemic-related restrictions. [LAT]Dennis Lynch


Related Articles

arrow_forward_ios
Onni Group President Rossano de Cotiis, Decron Properties President & CEO David Nagel and Ocean Plaza

Decron is unloading CRE assets ahead of potential statewide property tax hike

Decron is unloading CRE assets ahead of potential statewide property tax hike
LA County Assessor Jeff Prang and the future NFL stadium in Inglewood in June 2018 (Credit: Ron Reiring/Flickr)

LA County properties assessed at record $1.6 trillion

LA County properties assessed at record $1.6 trillion
An amendment to Prop 13 is headed for the 2020 ballot

An amendment to Prop 13 is headed for the 2020 ballot

An amendment to Prop 13 is headed for the 2020 ballot
Tax changes to Prop 13 could bring California $10B a year

Tax changes to Prop 13 could bring California $10B a year

Tax changes to Prop 13 could bring California $10B a year
Three things to keep an eye on in LA’s housing market this year

Three things to keep an eye on in LA’s housing market this year

Three things to keep an eye on in LA’s housing market this year
More LA homes are going under the knife

More LA homes are going under the knife

More LA homes are going under the knife
Joshua Greer and the home (Credit: Kevin Winter/Getty Images)

Beverly Hills Flats home sells for $40M, reported record for area

Beverly Hills Flats home sells for $40M, reported record for area
Heidi Marston (Twitter, Getty)

LA to phase out hotel program for homeless

LA to phase out hotel program for homeless
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...