From the 2/3 vote needed for all new tax measures, to the commercial investment property tax loophole, ENVISION SAN DIEGO will be covering it all.
Listen to the shows:
RAND (Caller, La Jolla): Thank you for taking my call and thanks for this discussion. I would just like to put two issues on the table. The main one is something that really shocks me, never comes up in these types of discussions, which is the distinction between commercial properties and homes. Of course, nobody wants homeowners to be taxed out of their homes but Prop 13 also holds down the property taxes paid by shopping malls, office buildings, all kinds of commercial properties. And they have a loophole that homeowners don’t have, which is that they can sell the holding company that owns the property and then someone else can take ownership of that property but, theoretically, it hasn’t changed hands, just the company has changed hands. And so there’s many commercial properties in the state that have not been reassessed for many years and they’re not paying the cost of the essential services that they need to stay in business. And I think that that aspect of Proposition 13 is very unfair and needs to be changed.
CAVANAUGH: Rand, my two guests are nodding furiously to your comments, and they both want to get in. So go ahead, Isaac, first.
MARTIN: Sure. I want to thank Rand for bringing this up. It’s a very important issue and it’s one that Californians don’t know about. There’s actually a survey, research on people’s opinions of Proposition 13 that shows, of course, a vast majority of Californians like Proposition 13 very much but a small minority of those people who like Proposition 13 actually know that it also applies to commercial property. Rand’s absolutely right that it does. The other interesting thing to note is that when you ask people, okay, what parts of Proposition 13 might you be willing to reform, this is one that actually a majority of some people in polls say that they’d be willing to rethink. When they’re told about this, people are really eager to keep the protections on homes but, you know, a little less concerned about protecting the leases of longterm commercial businesses.
CAVANAUGH: And, Joanne, what have you found out about that…
FARYON: Well…
CAVANAUGH: …dichotomy?
FARYON: …our caller will be happy to know we’re looking at those numbers. In fact, in San Diego County, commercial property, it’s less than 8% in terms of how many still retain their original 1978 property tax base. And commercial property is changing hands in this county at the same rate as residential, which is actually not the norm. In the state, commercial tends to change hands less frequently. Yes, there is a loophole. If you are a corporation and you sell your corporation and there’s no majority interest, yes, you can keep that same property tax base. How often is it happening in our county? We don’t know. The assessor really doesn’t know also. It’s something they look for. It does happen in the state and there’ve been some highly publicized cases up in Northern California. Is there a move to suggest, hey, why don’t we split the tax roll and, like Isaac says, why don’t we keep Prop 13 for homeowners but maybe commercial you get reassessed or why don’t we just change the tax rate. It’s 1% for residential, maybe it’s one and a half percent for commercial. Those things are being talked about in Sacramento right now. That’s come up with the assessor here in San Diego County and you can look forward to some of our reporting, which will address this issue as well.
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