Property tax: change in ownership: residential rental property.

This bill would provide that a transfer of a real property containing dwelling units occupied by tenants to a limited-equity housing cooperative, as defined, formed by the tenants of the real property for the purpose of purchasing the real property at which they reside, provided that the individual tenants who were renting at least 51% of the units in the real property before the transfer participate in the transaction through the ownership of an aggregate of at least 51% of the voting shares or membership interests in the entity that acquires the real property, as specified, is not a change in ownership. The bill would also provide that a transfer of a real property containing dwelling units occupied by tenants to a community land trust, as specified, is not a change in ownership. The bill would require a community land trust utilizing the above-described exclusion to indicate that use on a preliminary change of ownership report or change in ownership statement filed with the county recorder. The bill would authorize the county counsel to require a limited-equity housing cooperative claiming the above-described exclusion to provide specified documentation, including the Articles of Incorporation of the limited-equity housing cooperative. By adding to the duties of local tax officials with respect to the determination of whether a change in ownership has occurred for purposes of taxing real property, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Existing law requires the state to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation.

This bill would provide that, notwithstanding those provisions, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill.

This bill would take effect immediately as a tax levy.