Visualizing the Huge Cost of Proposition 15
Proposition 15, still not approved by voters, could cost property owners millions.
In short, Proposition 15 seeks to end Proposition 13 protections for property owners. Under this tax regime, commercial property owners would be taxed based on market value, which is constantly increasing every year. As such, building owners would be taxed at much higher rates - likely in the millions.
In this article, we hope to quantify the significant toll Proposition 15 will have on property owners.
Calculating the cost of Proposition 15
In the document provided below, one can see the exponential increases property owners will have to deal with. In one example, an office building with a current tax of $473,352 will be taxed $1,169,325 after Proposition 15. Certainly, this 147% increase can’t be taken lightly.
In another example, an industry property taxed $13,194 annually would end up paying an exorbitant amount of $111,951 - a 748% increase in property taxes.
It's also important to point out that property owners and businesses are already struggling due to COVID-19. With eviction moratoriums and reduced economic activity, property owners are already suffering significant financial losses. Property owners, who are already struggling through operations, should not be considered an additional source of revenue.
While every property owner would have different taxes based on their building’s assessed value, building owners will still likely have to expect exponential increases in immediately. If you'd like an estimated forecast of your taxes after Proposition 15, click HERE.