A new opinion piece by columnist Virginia Postrel says California's popular property-tax limitation Proposition 13 "wasn’t meant to establish a perpetual privilege," but has done so.
June 2018 marked the fortieth anniversary of the passage of Prop 13, and 57 percent of residents still say that it has been mostly good for California. The proposition limits local property taxes to 1 percent of the purchase price or assessed value in 1975, and further limits ensuing increases at 2 percent annually. As Postrel explains, writing for Bloomberg, "The law enjoys continued support because it gives homeowners predictable expenses. You can’t get forced out of your home simply because it’s become valuable. You move when you’re ready."
An initiative on this November’s ballot, Proposition 5, aims to reduce the incentive to stay put. It would remove the limits on the new home’s price, let homeowners transfer their assessment every two years rather than only once, and allow them to take their old assessment anywhere in the state. Someone could sell a $500,000 house with a $200,000 assessment, buy a new home for $600,000, and have a new assessment of $300,000 — the old one plus the difference.
