We need to team up to Defeat CRE Property Tax Measure Ballot 2020 in California
I am a commercial real estate property owner and I am trying to mobilizing statewide awareness to defeat an upcoming ballot measure that would allow California to reassess commercial properties to current market value, and continue to do so every three years.
I know the “split roll” initiative, which would start to tax us as owners of commercial property based on market value while leaving residential property under the existing system, is one of the biggest issues impacting commercial real estate owners in California. If it passes in 2020, there could be repercussions across the nation. “This is a very important issue for anybody that owns commercial real estate in California,”
I believe that “One thing you also have to understand is that these issues migrate throughout the country. … What happens in California is very important to what happens across the country.” Under California’s Proposition 13, which was passed in 1978, residential and commercial property taxes are reassessed upon the sale of the property to a new buyer. The state property tax is usually 1% of the property’s purchase price.
“Prop. 13 came about in 1978 as part of the taxpayer revolt,”
“At that time people were losing their businesses and homes because local jurisdictions were very arbitrary with local tax increases — this essentially put the power of property taxation on a state level and put some controls and placed certainties, which is very important for businesses.” Set for the 2020 California ballot, the California Tax on Commercial and Industrial Properties For Education and Local Government Funding Initiative, more commonly known as “split roll” would break commercial properties out of Prop. 13’s protective sphere, and it will look like 1983-1998 New York state that Cuomo put Commercial Property sell tax known as ‘Cuomo Tax’ which was 10 percent surtax on capital gains on property transfers of over $1 million.
There were no deals to be done and New York CRE was not attractive place to invest capital, real estate professionals were looking to other state to invest .
The levy or the tax, known almost universally as the “Cuomo tax,” was imposed by former Gov. Mario Cuomo and the Legislature in 1983 at a time when the real estate market was hot and seemed like a good source of funds for the state. During the good times it brought in more money than expected, making it harder for state officials to relinquish, although revenues have dropped sharply and the price of CRE went down, and was aggravated by the Cuomo tax, which was unique to New York State.
The levy, known almost universally as the “Cuomo tax,” was imposed by former Gov. Mario Cuomo and the Legislature in 1983 at a time when the real estate market was hot and seemed like a good source of funds to balance a budget. During the good times it brought in more money than expected, making it harder for state officials to relinquish, although revenues have dropped sharply in recent years. “The Cuomo tax was a disaster, because it discouraged transactions, “because “Transactions are important to a healthy real estate market because new buyers invest in properties. And the tax discouraged outside investors by telling them they had to pay a 10 percent exit tax.”
But since then the market has gone through a deep slump, one that those active in it say was aggravated by the tax, which was unique to New York State.
My grandfather AH and my Dad always said they believed “that from the first day this tax was discussed, it had a negative impact on commercial real estate.” In New York.
I believe by bumping up taxes, California would be in danger of forcing out the type of development that has kept the state’s economy humming. We must as taxpayer team up groups and will probably fight against the property tax changes.
“We don’t need more taxes in California,”. “ we commercial property owners and our Businesses already have a lot of reasons to move out of California, but one reason kept us to stay is that Prop. 13 provides us with the same amount of predictability and stability that homeowners have.”
I know California is already a high-cost state for businesses. Adding to our tax burden would further drive us and other businesses away, is that what people in Sacramento want!?
Our research shows that “Last year, California lost 1,800 businesses,”
. “Should this pass, the small businesses will go away.” And the landlords of these buildings would pass on the cost to tenants. “If you think of triple net leases, most folks that will be paying for these increased property taxes will be small businesses,” . “This will hurt California dearly.” This is the wrong way to raise money, some government officials and others “basically see commercial real estate as a piggy bank for whatever social ill needs to be fixed.” that is plain and simple WRONG.
Well Next year is also a presidential election. People may not be paying close attention to other issues on ballot and we need to educate them and talk about it so they VOTE NO on this ballot.
We need to start “To get a media campaign and to get ahead of this issue ASAP. I have a news to those people who think the split roll is a California-only issue are mistaken. “If this initiative wins in California, it’s going to throw gas on the fire on all these ordinances and initiatives [that impact commercial real estate] elsewhere,” .Just remember “What happens in California echoes to the rest [of the country] … if you think this is not your problem because you’re not here, I’m here to tell you that you are wrong. This is everyone’s challenge.”
Let’s VOTE NO on this ballot.
MOG E-Newsletters » Los Angeles Edition| Written By Mr. Kambiz Merabi’s editorial team | Posted By Gibran Escobar | June 30, 2019 8:22 AM PT
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Mr. Kambiz Merabi’s Article/s Re-Published again on June 30th, 2019 LA, has been Updated & posted at 8:01 PM PCT, July 1, 2019.
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