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Comment by jedberg | Hacker News Reader

There's a partial repeal of Prop 13 on our 2020 ballot. [0]

It would make commercial properties no longer subject to Prop 13.

[0] https://ballotpedia.org/California_Tax_on_Commercial_and_Ind...

The split roll initiative likely exempts many parking lots from reassessment at least until June 2025 since they can count as “small business” (fewer than 50 employees) (https://oag.ca.gov/system/files/initiatives/pdfs/19-0008%20%...)

Possibly yes. One catch might be that they are contractors so if the parking company has 50 overal it might not count. They’ll have to split up or something. Or litigate for a while. But either way it’ll sort itself out in a few years.

That's so stupid. I've never met a real estate concern that had ANY employees. The fact that a building is owned by 1 guy who outsources everything does not make it a "small business".

How do you define small business such that it excludes a one-person renting a house/apartment operation?

Why should it? What’s special about that case?

I don’t know; I think it is a small business. Ask @jumpingmice.

Revenue

Most landlords are taking in (far) less than a $30MM in gross receipts per year though, right?

(That’s the SBA cutoff for “small business” in property renting; NAIC business codes 5311x0.)

https://www.sba.gov/sites/default/files/2019-08/SBA%20Table%...

All residential property is already exempt from the split roll initiative (unfortunately), so residential landlords don’t need to claim the small business exemption. As for nonresidential property, if the split roll initiative passes, every single commercial landowner will want to classify themselves as a small business to get the exemption from reappraisal (unfortunately), so I imagine that this will be fairly contentious. As the initiative is written, a small business must (1) occupy the property, (3)(A) employ <50 employees, (B) be managed independently, and (C) own some real estate in California (but not necessarily the property in question?!)

> and (C) own some real estate in California (but not necessarily the property in question?!)

I think that's a protection against the business owning a Trust that owns the land. It's to force the business to own the land directly.

That's great! I'd image that could alleviate a ton of housing issues and government funding issues in California. Does anyone know the chances of it passing?

There's no polling on it yet. I suspect it will be close because there are a lot of very rich people who will lose a lot of money if this passes.

Property tax is basically a wealth tax. Most wealthy people don't want their wealth taxed. They'll pay millions to defeat this. I wouldn't be surprised if they made ads that straight up lie and tell people their property tax will go up and some BS about farms.

Though a lot of wealth is tied up in property, I see property taxes as more of a consumption tax. I see it as you are consuming the right to exclude others from that property for a year.

A fully paid house and a 97% mortgaged house pay the same property tax in most locales.

(I also think that tenants rather than landlords are paying “going rate” property taxes, even though landlords are the ones writing the check based on actual rates.)

Zero. So many cases of "poor grandma would lose her house" cases are going to be paraded around, and most of the big money in real estate prefers the status quo too.

Yeah they’ll straight up lie I suspect. This won’t even affect any single family homes.

Yeah, but they'll convince people it's just a matter of time til they overturn the benefits for houses of $10M, and then $5, and then before you know it, even you and poor old Grandma will have to pay! You have to take a stand now!

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