By closing corporate tax loopholes, Prop 15 will expand the tax base and reduce homeowners’ taxes.
The analysis shows that Prop. 15 expands the tax base by requiring commercial and industrial property worth more than $3 million to pay fair market value taxes, which would lower debt override tax rates that pay for debt service on local, voter-approved bonds.
This benefit to homeowners comes as the property tax burden has shifted onto homeowners, away from corporations. In 1978, according to the Legislative Analyst’s Office, residential properties accounted for 55% of assessed value, while commercial, industrial and agricultural properties accounted for the remaining 45%. By 2018, residential properties accounted for more than 72% of assessed value, while the share for commercial, industrial and agricultural properties had declined to just under 28%, according to data collected by the Board of Equalization.
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