Proposition 13 Winners and Losers

On November 30, 2016, Ralph McLaughlin reported for Trulia.com:

California’s Proposition 13 is the voter initiative that homeowners love, local governments hate, and politicians consider a third rail. On one hand, the state law caps both the property tax rate and the rate at which the assessed home value can increase. On the other, it reduces the long-term revenue stream that local governments rely on to fund public education, services, and infrastructure. But who is really benefiting from it?

Using public tax records, census data, and our own property-level housing value estimates, we calculated the effective property-tax rate – that is, the amount of property taxes homeowners pay relative to the current market value of their home – for each home and municipality in California. We found that: In 2015 alone, California homeowners received over $12.5 billion in savings from Prop 13, while local governments lost that same amount.

More than 40% of California property owners have an effective property tax rate of less than 0.5%, which is half of the 1% ceiling imposed by Proposition 13.

Trulia reached out to us to see if we would post this on our blog here. We felt the content was something our readers would appreciate.

For the full article: Proposition 13 “Winners and Losers”