A lot has changed since 1978, when the state of California passed Proposition 13. Many homeowners who were the original beneficiaries of that landmark legislation limiting property taxes, now seniors, have been reluctant to downsize and relinquish their favorable tax basis. People renting out inherited family homes have been benefitting from substantial tax breaks conveyed with the properties and rampant wildfires are destroying massive swathes of housing stock throughout the state. On Election Day voters approved Proposition 19, significantly updating the property tax code to address these modern-day realities. The California Association of REALTORS® was the force behind the revisions, with help from the REALTOR® Party – and the California Professional Firefighters.
Rick Violett, Chair of the C.A.R. Prop. 19 Task Force explains that the recent success was very much a group effort, and years in the making. After a first attempt to update the property tax laws failed in 2018, disastrous wildfires and the global pandemic caused major revenue drains at all levels of government, making the timing favorable for a second try. “This is very practical legislation that will have a real, positive impact on so many of our state’s residents – not only homeowners – so we were able to gather a strong coalition supporting it. The Firefighters have been especially strong and high-profile advocates, and we are proud to have the partnership of the state Democratic Party, labor and housing advocates, taxpayer groups, senior advocacy groups, and many chambers of commerce around the state, as well.”
The revised law will enable homeowners over the age of 55 to transfer their property tax basis to a new home anywhere within the state, regardless of the cost, up to three times; it will also limit the property tax benefit to heirs who will personally inhabit the property. Tax portability is also available to people with disabilities as well as people who lost their home to a fire. C.A.R. estimates that hundreds of millions of dollars in revenue will be generated for local governments and schools, with a major portion going to the state’s fund for fighting wildfires and to under-funded fire districts. These changes are also expected to spur activity in the housing market.
The REALTOR® Party provided polling that revealed that housing costs and availability was the top concern for a vast majority of likely California voters in the 2020 election, a priority that remained consistent well into the pandemic. With major REALTOR® Party support augmenting significant resources of its own, C.A.R. took charge in drafting the legislation and collecting 1.5 million signatures to get the measure on the November 2020 ballot, and then mounted a massive “Yes on 19” public awareness campaign as well as an internal effort for its nearly 200,000 REALTOR® members. “We mobilized our Key Contact program, which connects members and legislators on a meaningful one-on-one basis during our legislative alternative option,” notes Violett, “and we had members phone banking and writing letters to editors of local papers. They were featured in campaign ads, and helped spread the word by leveraging their own social media contacts. Our members were our very best advocates!”
The passage of Proposition 19 means that California can look forward to a notable availability in existing housing stock in the coming years, and that REALTORS® will be able to help seniors move to homes that are better suited to their needs, and provide more options to younger aspiring homeowners. Members are thrilled, and clamoring for fact sheets about the tax portability, reports Violett. “We’re putting together a member education campaign and expect the new legislation to start having a positive impact throughout the state in the near future. There’s no way we could have done it without all the support from the REALTOR® Party.”
To learn more about how the California Association of REALTORS® helped revise property tax law to benefit seniors, stimulate the real estate market, and generate funding for local governments and victims of natural disasters, contact Julissa Gómez, C.A.R.’s Director of Member Mobilization, at JulissaG@car.org or 213.739.8380.