COMMERCIAL AND INDUSTRIAL PROPERTY OWNERS COULD BE HIT WITH A HUGE TAX INCREASE
TENANTS WILL ALSO BE FINANCIALLY IMPACTED
- Proposition 15 Split Roll Tax is headed to tje ballot in the November 3,2020 California General Election as the Deceptively named “California Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative,” with the purported goal of funding education and local government.
- The measure would base annual property taxes on “fair market value” of commercial property as determined by the Office of the Assessor instead of purchase price.
- Longtime owners of commercial real estate in California would see a massive spike in property taxes and tenants will be financially impacted too. While some of these increases could be passed through to tenants ,and ultimately the consumer,most will not be able to absorb drastic increases in operating costs which will lead to some business shutting down.
- The tax reform would greatly increase operating expenses for these properties,substantially devaluing them by increasing vacancy and reducing lease rates.
Case Study- Annual Property Tax Comparison for an 82,000 SF Industrial Property Purchased in 2003.