Even without California’s ill-advised Split-Roll property tax measure looming over every renter and residential as well as commercial property owners’ head throughout the sunshine state — California has already been grappling with lopsided expenditures such as over-spending on state & local government salary increases, healthcare benefits, and lavish vacation time… Rather than budgeting properly for public works that would actually be beneficial for regular every-day Californians rather than folks with elite government positions.
Residents of this state are already dealing with unusually high taxation (other than property taxes), and other challenging regulations that make it difficult as it is for California businesses to compete effectively in a number of important and popular industrial and commercial playing fields.
Let’s face facts… an $11 billion Split-Roll property tax increase on business and commercial property owners would, without question, prevent businesses based in California from hiring new employees; and would make it more difficult to retain existing employees.
And you can forget about Christmas bonuses and/or timely raises, not to mention maintaining proper levels of health coverage! It’s obvious that stability and predictability provided by 1978 Proposition 13 property tax relief has helped businesses in California to compete on a national level regardless of the fact that doing business in California is expensive to begin with!
Even if correctly managed, tax assessments will mirror the ups and downs of the real estate market in California— resulting in volatility, the way things were prior to 1978 when Proposition 13 was passed into law. During low economic times this would most likely end up leading the state into an even more severe loss of revenue.
If you think back… during the 2008— 2009 recession, commercial property values dropped by over 35%, mainly due to the economic recession. These abrupt and unpredictable economic shifts are what motivated unease and unhappiness among California property owners before 1978, and ultimately led to the big win pushed by the Howard Jarvis Taxpayers Association and others, leading ultimately to the passage of Proposition 13 in the first place.
Proposition 13 stabilized the property tax revenue system by capping property taxation at 2% plus nailing down property owners’ right to avoid property tax reassessment… with other stabilizing influences, rules and iron clad regulations favoring the taxpayer for the first time.
Much to most beneficiaries’ surprise, it also became possible for estates to entertain certain options, where none existed previously; such as beneficiaries who were intent on retaining inherited property from parents now being able to buyout siblings that wanted to sell their property shares… Through a loan to an irrevocable trust, working alongside CA Proposition 58.
Trust loans have become popular throughout California, to resolve heated sibling “inherited-property conflicts”, working in tandem with CA Proposition 58, once those beneficiaries looking to keep inherited property actually qualified – enabling their co-beneficiaries to buyout siblings’ shares of a home usually… typically called a “beneficiary buyout of sibling property shares”.
While at the same time the siblings keeping the home were now able to legally avoid property tax reassessment, by using a trust loan to buyout a sibling’s share of an inherited house – or, as realtors call it, “a transfer of property between siblings” or “sibling to sibling property transfer” – whereas regular middle class folks simply refer to the process as “getting cash from a trust loan to buyout siblings’ shares in inherited property”. Most people prefer to keep things simple. As we do.
It was unthinkable that the bad old days would even have a remote chance of returning… Until now.