Posts by David Marino

Prop 15—The Tax Increase on Commercial Tenants You Don’t See Coming

on October 12, 2020

To understand how Proposition 15 would affect property taxes for commercial real estate, one must first understand how property taxes are assessed today. California commercial and residential property taxes are limited by Proposition 13, whereby property tax is fixed at 1% of the original purchase price, with annual increases thereafter capped at a maximum of 2% per year. Prior to the passing of Proposition 13 in 1978, local governments set property tax rates to fund local services, and the average property tax rate in California was 2.67 percent. Also prior to Prop 13’s limitations on property tax increases, California property tax rates were based on changes in market value, and annual increases were subject to the changing fiscal needs of local governments. The citizens “tax revolt” at the time was based on the notion that California property taxes were excessive, and their market increases were unrestricted and subject to abuse by legislators and county tax assessors.

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About this Author
David Marino

David Marino

David Marino is executive vice president of Hughes Marino, an award-winning commercial real estate company specializing in tenant representation and building purchases with offices across the nation. Contact David at 1-844-662-6635 or david@hughesmarino.com to learn more.