Proposition 5: Good for Homeowners Over 55 and The Housing Market

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San Diego Union Tribune | The San Diego Union-Tribune Editorial Board | September 12, 2018

Proposition 13, the sweeping 1978 ballot measure that capped annual property tax increases at 2 percent until a property gets sold, is still supported by most Californians 40 years later, but it is often criticized by unions and others who claim it defunds government in California. The larger view is that it has helped families preserve their wealth through repeated housing bubbles. Proposition 13 has especially been a boon to retirees on fixed incomes. Yet it has also effectively trapped them in their homes.

Proposition 5 would change that. It would allow homeowners over 55 or who are severely disabled to transfer Proposition 13 property tax protections to newly bought homes anywhere in the state. A couple, for example, could sell a home assessed at $250,000 for $750,000 then buy another property for $750,000 and continue to pay property taxes at the $250,000 valuation. If the new home cost more or less, property tax would be adjusted based on simple formulas that continued the property tax breaks that residents enjoyed with their previous homes.

The sponsors of Proposition 5 — real estate agents — came up with the measure to pad their pockets. But it’s actually a smart idea that will both give older people more flexibility with their lives and introduce liquidity to a housing market that could badly use it. The revenue it would cost local government is relatively small. Vote yes on Proposition 5.

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I support Proposition 5, a Constitutional Amendment proposed for the November 2018 California statewide ballot. You may list me publicly as a member of the bipartisan Yes on 5 Coalition.

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California Association of REALTORS®. Committee major funding from:
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