California split roll tax measure challenges Prop 13

Prop 13, the iconic tax reform amendment, which passed on June 6, 1978, is being challenged by the California League of Women Voters and California Calls, a labor activist group.

California Property Tax is assessed based on the sale price of the property, residential or commercial. Currently the tax is assessed at 1% of the sale price with an increase of 2% per year. The new “split roll” tax measure is based on reassessing commercial property tax every three years commencing with new assessments in 2020. The residential property tax assessment format will not change.

Opponents believe that if the split roll measure passes, commercial property owners will lose financial certainty. How much a property was valued when it was purchased 10-20 -- or even 30+ years before -- will be irrelevant because the base property value will be assessed at 2020 rates. The proponents of the split roll measure believe it will raise $12 billion in new annual revenues.

The Attorney General and the State Legislative Analyst are expected to Release Title Summary for the measure on February 20, at which time the signature gathering process will begin.

ICSC, along with the California Business Properties Association (CBPA) and other commercial real estate associations in California have opposed these efforts for a number of years. 

“Creating split roll property tax could put thousands of tenants out of business, result in higher taxes and create uncertainty leading to the devaluation of all property values,” said CBPA Vice Chairman Doug Wiele.