New Split Roll Tax Initiative Fails to Make Ballot!
Late last year, a law firm representing SEIU-UHW submitted a proposal to California state officials seeking to place a split roll tax proposal on the November 2022 ballot.
This proposed initiative has officially failed to qualify for the ballot.
In application, this new proposal was dramatically different from Proposition 15, a tax initiative that was defeated last year.
Preliminary titled as the "Housing Affordability and Tax Cut Act of 2022", the proposal would tax many types of California properties, including commercial properties. Effectively, it dismantled Proposition 13's property tax safeguards.
Proponents had until the end of April 2022 to gather the required number of signatures, but failed to do so.
Given the destructive nature of this tax initiative, this is a major victory for the commercial real estate industry. To read more about the win and what it means for property owners, read below.
What the new Split Roll property tax would do:
For properties with a full cash value of $5 million or more, an annual surcharge of 1.2% would have been applied as a property tax surcharge. Further, this rate could have increased to as much as 1.4% if additional funding was needed to reimburse local governments for lost revenue from the homeowners’ property tax exemption and renter’s tax credit.
Additionally, properties with a value of between $4 million and $5 million would also have been assessed a surcharge of 1.2 percent divided by $ 1 million multiplied by the full cash value of the property minus $4 million.
The proposed law would have also prohibited landlords from passing these charges onto tenants.
Covered properties included:
- Vacant land with a full cash value of more than $4 million;
- Parcels where one portion of a single residence or commercial structure has a full cash value of more than $4 million;
- Parcels created by subdividing another parcel for purpose of avoiding the surcharge.
Covered properties excluded:
- Commercial agriculture;
- Parcels, where the full cash value divided by the number of owner-occupied households, is $4 million or less;
- Parcels with utilities and transport subject to state assessment;
- Deed-restricted low-income housing;
- Vacant land being used for open space or a park.
With that being said, there are still a number of costly taxes and ordinances being considered heading into this new election cycle, such as vacancy taxes and the eviction moratorium. BOMA/GLA will continue to be vigilant and ensure that our members are represented through robust advocacy initiatives and outreach.