4 Things To Watch For If California’s Prop 13 Gets Amended

A potential amendment to Proposition 13, California’s decades-old property law that governs property tax reassessment, would have some impact on the state’s controversial property tax system but would also create challenges for small businesses, additional costs for tenants and complexities for the state, lawyers say. Under the proposed amendment, currently before the Senate Appropriations Committee, a property would face reassessment if 90 percent of it or more changed hands, regardless of the distribution of buyers. But private real estate investment trusts, which include some of the largest landlords in the country, would have to meet the 90 percent test under the proposed amendment. “Rental rates … are already high in California,” said William R. Ahern of Allen Matkins Leck Gamble Mallory & Natsis LLP. “Some of the increases will be passed through to tenants through increased rental rates.”