Proposition 5, which would have sharply expanded the tax benefit for homeowners over 55 years old, the severely disabled and natural-disaster victims, has failed.
With 95.7 percent of precincts reporting, the “No” side has been declared the winner with 58.13 percent of the vote as of Wednesday morning.
According to findings of the state’s nonpartisan Legislative Analyst’s Office, Proposition 5 would have been a big drain on schools and local governments, which depend heavily on property tax revenue.
Under current law, seniors and near-seniors can transfer tax assessments if their new homes are worth the same or less than the ones they sell, and they can only do it only once. Also, counties can decide whether to accept out-of-county transfers; only 10 of 58 do.
The ballot measure would have allowed over-55 homeowners to transfer their assessments to any new home — no matter what it costs — anywhere in the state and as many times as they wished. It would have also increased the tax break for homeowners who move to less expensive homes.
The Legislative Analyst’s Office concluded that if Proposition 5 passed, schools and local governments would have each probably lost more than $100 million in property tax revenue a year initially and that, over time, those losses would have reached about $1 billion a year for each. About 85,000 homeowners over 55 who move every year without the tax break would pay much less.