What is a split roll property tax?

Split roll property tax is a system of taxing property that assesses commercial or industrial properties differently than residential properties. Under the split roll system, industrial and commercial properties are assessed at market value, while residential properties are subject to an annual cap or, in some cases, a flat rate. This means that commercial and industrial properties are more heavily taxed than residential properties. In California, split roll property tax is based on Proposition 13, a voter-approved initiative from 1978 that limits the annual tax rate of residential properties to 1% of the value of the home and limits the annual increase in value to no more than 2% each year. For commercial and industrial properties, the annual tax rate is based on the market value of the property. The split roll system was designed to reduce the tax burden on homeowners and to create a more equitable system in which businesses pay their fair share of taxes. Additionally, it ensures that homeowners are not left with an overly burdensome tax bill when their home value increases due to a strong market. While the system has its advantages, it has also been criticized for hurting businesses, as they may be paying a higher rate of taxes than is necessary.

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What is a split roll property tax?

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