Not all properties are created (or taxed) equally

Most citizens equate Proposition 13 with protecting homeowners from onerous increases in property taxes. While Prop 13 does a good job of protecting homeowners, the big secret about Prop 13 is that was actually a much bigger benefit for businesses than homeowners. Prior to Prop 13, commerical properties paid about 60 percent of all property taxes statewide. After Prop 13, the burden shifted to homeowners paying about 60 percent of all property taxes.

How did this happen? Very simply, it is due to the fact that commercial businesses change ownership far less frequently than residences. Since taxes are updated to market value every time a property is sold, residential properties are adjusted to market value far more frequently than commercial properties. In addition, commercial property owners have all sorts of loopholes wherein they can transfer a property without it triggering a reassessment. There are all sorts of tricks where the commercial business can change hands without requiring an update of its value.

The following article you can access here talks about this issue and some of the possible solutions being floated in the legislature. Given the strong business lobby, I don't hold out much hope of a change in commercial assessments, but changing the way commercial property is assessed could greatly assist every City and County in the State.