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November 2018 Election: California’s Proposition 5, explained

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What it is, who supports it, and who opposes it

Taxpayers Line Up To Pre-Pay Property Taxes Ahead Of New Tax Law Limits Photo by Chip Somodevilla/Getty Images

What’s Proposition 5?

Proposition 5 is a small but significant tweak to Proposition 13, a 1978 ballot measure that slashed property taxes statewide.

If passed, it would allow homeowners who are over the age of 55 or are severely disabled to continue paying property taxes based on the assessed value of their current homes when they sell and then purchase a new residence. The same goes for residents in areas affected by natural disasters.

That could translate into big savings for older homebuyers, given that under Proposition 13, Californians who have owned property for longer periods of time often pay far lower taxes than their neighbors.

Under current law, when people who have owned their homes for decades decide to sell and rebuy somewhere else, it often means taking on a much higher property tax burden.

Residents to whom the ballot measure applies can already take property tax savings with them if they buy a home of equal or lesser value in the same county. But they can only do this once. Proposition 5 would eliminate the one-time requirement and allow home buyers to shop around in counties across California.

Who’s behind it?

The measure was drafted by the California Association of Realtors. The real estate trade group has spent more than $4 million qualifying the initiative for the ballot and promoting it to voters.

What are the arguments for Proposition 5?

Supporters of Proposition 5 say it would allow older residents living on fixed incomes to downsize without worrying about enormous property tax increases, which they liken to a “moving penalty.” It would also allow residents whose homes have been damaged or destroyed in natural disasters to move on without getting hit with a big tax hike.

What are the arguments against Proposition 5?

The main argument against Proposition 5 is that it will almost certainly cost schools and local governments a lot of taxpayer revenue. Its potential effects on California’s housing market are less clear, but few predict it will bring down sky-high real estate prices.

To take advantage of Proposition 5’s benefits, residents also have to be homeowners. For this reason, critics say, it’s likely to disproportionately benefit the wealthy, while siphoning away tax dollars from services used by everyone.

Who supports it?

On top of the California Association of Realtors, supporters include the California Chamber of Commerce and the Howard Jarvis Taxpayers Association, which was founded in support of Proposition 13.

Who opposes it?

The measure is opposed by the California Democratic Party, the California Teachers Association, the Southern California Association of Nonprofit Housing, and other housing and labor advocacy groups.

Further reading