The San Luis Obispo Tribune | SLO Tribune Editorial Board, October 14, 2020
This would expand the tax break for older homeowners, people who are disabled and victims of a natural disaster by allowing them to sell a home and buy a new one without seeing their property taxes take a big leap. They could do that three times, instead of just once in a lifetime, as current rules allow. Plus, they could buy anywhere in the state. They’re now limited to staying within the same county.
The measure also would close what’s known as the “Lebowski Loophole” after actor Jeff Bridges, who inherited a Malibu property that he and his family rent out for $15,000 a month, while according to CalMatters, they pay less than $6,000 per year in property taxes. Prop. 19 would require that inherited property be reassessed unless the new owners plan to live in it.
Some tax revenue would be lost by expanding the tax benefit for seniors, but would be gained by closing the Lebowski Loophole. “Overall, property taxes for local governments and schools probably would increase,” says the Legislative Analysts Office. There also would be some additional revenue generated for the state, which would go toward fire protection.
Our recommendation: Yes
It’s time to close the inherited property tax loophole exploited by an elite few and let Prop. 19 revenue help cities, counties, fire agencies and people who need to downsize or move closer to loved ones.