Potential Impact of California’s ‘Split Roll’ Ballot Initiative on Property Values

Dale Kim, partner with EY, participated in a video interview at Nareit’s REITwise: 2019 Law, Accounting & Finance Conference in San Antonio.

Kim was on a panel at REITwise focused on state and local tax issues. He discussed the issues REITs face regarding the anti-dividends paid deduction legislation in Hawaii as well as combined reporting in New Jersey.

Kim also discussed California’s Proposition 13, in effect since 1978, which limits property tax increases to up to 2 percent per year. He said that California’s “split roll” ballot initiative, which could be determined by voters in 2020, would remove the 2 percent limitation for commercial and industrial properties and adjust them to fair market value.

“That could have a very significant impact on a company’s potential property tax liability,” he said.