DOES COMMERCIAL REAL ESTATE PAY ITS “FAIR SHARE?”

Reports back from Delegates who met with Legislators that expressed support for doing away with Proposition 13 protections, said the most common misperception that was expressed was the notion that since the measure passed in 1978 that the ratio of taxes paid by homeowners and commercial properties has changed to the benefit of commercial.  This, in fact, is easily shown to be false.

A recent study  by CalTax  (“Proposition 13 Revisited” based on data from the State Board of Equalization) found that non-homeowner occupied property subject to Proposition 13 assessment limits accounted for 60.26% of the tax burden in 2011-12, up from 58.16% in 1979-80 (after passage of Proposition13).

In terms of total dollars, in 2011-12, all business and non-homeowner occupied property subject to Proposition 13 assessment limits had an assessed value of $2.49 trillion (an average increase of 7.5%), while homeowner-occupied property had an assessed value of $1.64 trillion (an average increase of 7.2%). Both of these increases surpass the rate of inflation, meaning that income collected from property taxes is actually increasing over time.

These numbers – provided by the State of California – clearly show that the property tax burden has not shifted to homeowners and in fact, the measure continues to greatly benefit them.

 

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