Real Estate Round-Up: Every vote counts

On Nov. 3, voters made their voices heard on two real estate related propositions.

Prop 15 would have changed how commercial properties and agricultural land have their property taxes assessed. Commercial property and agricultural land would have been re-assessed every three years, whether or not there was a transfer of title. In other words, the reassessment would not require a sale to occur but would instead become a calendared event.

The proponents argued that large corporations had been able to retain their property tax basis from the time of the original purchase, just like residential owners, and that these corporations “could afford” to pay a stepped up basis, based on an appraised value.

The thing is, Prop 15 would not have only affected the large corporate owned commercial property, but every commercial property, and all agricultural land that is currently producing a product. This change in how property tax is assessed would have impacted nearly every commercial property owner and owners of agricultural land across the state.

Thankfully, the people of California were smart enough to understand that all new taxes filter down and ultimately get paid by you and me. No business can sustain their business plan when unforeseen expenses occur, without tacking that expense on to their customer's bill. Prop 15 was defeated. Bravo California voters.

Prop 19, on the other hand, was approved by the voters. Prop 19 is the California Association of Realtors sponsored bill that provides seniors, the severely disabled and disaster victims the ability to transfer their property tax basis up to three times in their lifetime, to anywhere in California, on a property of any value.

Any increase in purchase price on the replacement property will simply have a blended property tax basis. Restrictions were added on transfers to heirs, so only heirs that chose to use the transferred property as their principal residence will be allowed to retain the property tax basis. If an heir decides to use the transferred property as investment property, they will receive a stepped-up property tax value, at a new reassessed value, based on the current value at the time of the transfer.

A few groups opposed Prop 19 over this compromise because, in their mind, no new tax is the only good tax. But the reality is the California Legislature had made it crystal clear that they were coming after that provision, so why not give it up to retain the balance of benefit received from the overall proposition?

Cities, counties, schools, and fire districts will receive financial benefit from this well thought out proposition and once again, the voters of California were smart enough to recognize that and passed Prop 19.

Locally, the Fallbrook Community Planning Group had eight seats up for election. The Fallbrook Community Planning Group splits their roster in odd and even seats with either the odd seats or the even seats running for election every two years.

With 11 people running to fill this election's eight open seats, four incumbents were reelected to the group and four new members were added. Two incumbents were not reelected to the group.

The Fallbrook Planning Group has oversight on design, parks and rec, land use, and circulation. The purpose of the group is to understand plans for new projects or developments within a community, provide a public forum where community input is welcomed, weigh public testimony against proposed benefits, enhancements and costs associated with a project, and make a recommendation that reflects the community’s position to county decision makers.

The recommendations made by the Fallbrook Community Planning Group affect residential and commercial property owners, as well as the vibrancy of Fallbrook.

All in all, it was a good week for property owners, tenants, consumers, and the village of Fallbrook. Real estate is woven throughout the fabric of everything we all experience.

The price of real estate, taxes on real estate, impediments or encouragements to our streets, our parks, our land use and the design of all these things, in their own way, affect all of us that enjoy living in Fallbrook.

Thank you for voting.

Kim Murphy can be reached at [email protected] or 760-415-9292 or at 130 N Main Avenue, in Fallbrook. Her broker license is #01229921, and she is on the board of directors for the California Association of Realtors.