Summary: Proposition 5 allows homebuyers 55 and older and all disabled homebuyers to move in California and keep their existing property tax rate, with a possible adjustment. Schools and local governments would each lose more than $100 million in annual property taxes early on and about $1 billion per year as a result.
- For: People living in homes with empty bedrooms — often parents whose grown children have left the home, known as “empty nesters” — are currently dissuaded from downsizing because they could face a higher property tax, which typically happens when homes are purchased and get reassessed at current value. The California Chamber of Commerce endorsed Prop 5,, stating the measure removes a “moving penalty” that discourages seniors and the severely disabled from moving homes and, consequently, alleviates the housing shortage by freeing up modest-priced housing for young families.
- Against: The Middle Class Taxpayers Association, National Housing Law Project and Congress of California Seniors argued Prop. 5 would exacerbate the housing crisis because it gives a tax break to wealthy Californians and a windfall to the real estate industry. Instead, it would cut local revenue from public schools, fire, police, health care and other services.
Party support: California Democrats recommends a No on Prop 5. CA GOP recommends a Yes on Prop 5.
Stanford College Republicans oppose Prop 5 because it applies exclusively to older homebuyers, even though the political group generally favors low taxes: “It will result in increased debt for all taxpayers when only a few benefit from it. However, we would support such a cut if it were applied to all California homebuyers.”