A new voter initiative that would allow Baby Boomers in California to avoid what’s been called the “moving penalty” when they buy a pricier home has qualified for the November ballot.
The measure, which is sponsored by the California Association of Realtors, would give California homeowners 55 and over a property tax discount when they buy a more expensive home. But it could also wipe away millions in revenue for local governments.
The property tax on the new home would be discounted in connection with the sales price on the home they are leaving.
That, in turn, could ease the state’s housing crunch by freeing up inventory for younger buyers, said Christopher Carlisle, a lobbyist for the realtors association.
“It would allow those seniors who are seeking to downsize to do so — or to move closer to grandkids or a second career. It will make that easier,” Carlisle said. “That then allows a younger family to buy that home.”
California’s Proposition 13, the 1978 ballot measure, has prevented some homeowners from buying pricier homes because a property’s assessed value is based on its most recent sales price.
But for local governments, the measure could mean the loss of an initial $150 million in revenue each year, according to a report by the California Legislative Analyst’s Office.
“Over time these losses would grow,” the LAO report continued, “likely reaching between $1 billion to a few billion dollars per year (in today’s dollars) in the long term, with schools and other local governments each losing $1 billion or more annually.”