Proposition 5

Proposition 5 -- Property taxesWhat it does: Expands property tax breaks for homeowners, who are either 55 or older, severely disabled or a victim of a natural disaster. Current law allows them a one-time exemption to transfer the taxable value of their existing home to a new home in the same county if the market value is the same or less than the existing home. Proposition 5 would allow those people to transfer the taxable value to a home: In a different countyEven if it is more expensiveMore than onceThe measure also would allow these homeowners who purchase a home with a lower market value than their current home – but a higher taxable value – to transfer a lower taxable value to the new home.How much it costs: The Legislative Analyst’s Office predicts the measure would lower property tax revenue for local government and schools by about $100 million a year – eventually growing to $1 billion a year – because most of the estimated 85,000 homeowners over 55 who move each year would get a tax break. There would be an increase in income tax receipts because more people would move and have to pay income taxes on the profits from home sales.

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  • Yes - For the Measure

  • No - Against the Measure

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Statements for and against the measure:

Supporters: California Association of Realtors; Californians for Disability Rights, Inc.

What they say: The measure would give seniors and the severely disabled a tax break to move to safer and more practical housing. It would alleviate the housing shortage by encouraging more new home development. It would actually increase state revenue by encouraging the sale of older, lower-taxed homes to new owners, who would pay higher taxes.
Opponents: California State Association of Counties; California Teachers Association.

What they say: It would raise the cost of housing and do nothing to ease California’s housing crisis. It would lower revenue available for schools and other public services. It would be nothing more than a windfall for the real estate industry.