Prop 13, Prop 19 & Your Taxes: How New Rules Affect California Families in 2025

About this video

• Video Title: Prop 13, Prop 19 & Your Taxes: How New Rules Affect California Families in 2025
• Channel: California Insider
• Speakers: Susan Shelley, Sam Kurami
• Duration: 41:53

Overview

This video discusses the implications of Proposition 13 and Proposition 19 on California property taxes and the broader tax landscape. It explores how recent court decisions and legislative changes have created loopholes that allow for increased taxation, potentially impacting families and businesses. The discussion also touches on the history of Proposition 13 and efforts to preserve its original intent.

Key takeaways

• Proposition 13's Impact: Originally enacted in 1978, Proposition 13 significantly lowered property tax rates in California by capping increases and setting the tax rate at 1%. It also included protections to make it harder to raise other taxes, requiring a two-thirds vote for local special taxes.
• Erosion of Protections: Recent court decisions and legislative actions have created loopholes that undermine Proposition 13's protections. Notably, a 2017 court decision allowed citizen initiatives to raise taxes without a two-thirds vote, leading to increased taxes like a sales tax in Los Angeles County for homelessness services.
• Proposition 19 Changes: Proposition 19, passed a few years ago, has altered property tax rules for inherited properties. Previously, parents and children could transfer principal residences and up to $1 million of other property value without reassessment. Now, this exclusion is largely limited to the principal residence if the child moves in, and other inherited properties are reassessed to market value, potentially leading to significant tax increases.
• Consequences of Tax Increases: The video argues that these changes and loopholes can lead to higher taxes, making it difficult for families and businesses to remain in California. This can result in people leaving the state, impacting its economy and tax revenue, particularly from high-income earners.
• Preserving Proposition 13: The Howard Jarvis Taxpayers Association is working on an initiative to restore Proposition 13's protections, specifically by reinstating the two-thirds vote requirement for local special taxes and repealing existing transfer taxes that were enacted through loopholes.