Proposition 15 was a 2020 California ballot measure that would have raised property taxes on most commercial and industrial real estate by reassessing those properties at current market value rather than their original purchase price. California voters defeated it, roughly 52 percent to 48 percent. Because it failed, the Prop 15 California property tax changes never took effect, and all property in the state continues to be assessed under the Proposition 13 framework.
What Prop 15 Would Have Changed
Prop 15 proposed what’s often called a “split-roll” system. Residential property would have kept its Proposition 13 protections. Commercial and industrial property would have been pulled out and reassessed at current market value, with reassessments occurring at least every three years.1California Secretary of State. Proposition 15 – Official Voter Information Guide
The one-percent tax rate cap from Proposition 13 would have stayed. Only the method for calculating the taxable value would have changed. Legislative analysts projected the measure would have generated between $6.5 billion and $11.5 billion in new annual property tax revenue, with the wide range reflecting uncertainty about how quickly reassessments could be phased in and how property values would move.
Which Properties It Would Have Covered
The initiative applied to commercial and industrial real estate: office buildings, retail centers, warehouses, factories, and similar properties. Residential property of every kind received explicit protection. Single-family homes, condominiums, and apartment complexes would have continued under the existing Proposition 13 rules regardless of size.1California Secretary of State. Proposition 15 – Official Voter Information Guide
Mixed-use properties got a specific carve-out. If a building was at least 75 percent residential, the entire property would have been treated as residential and exempt from reassessment. Below that threshold, only the commercial or industrial portion would have been subject to market-value reassessment. Property zoned commercial but actually used as long-term housing would have been classified as residential.
Small-Business and Farmland Exemptions
Owners whose total California commercial and industrial holdings were valued at $3 million or less were exempt. The threshold applied in aggregate, so an owner with three properties worth $1 million each would have exceeded the cap. Below it, properties would have stayed on the old assessment system.
Agricultural land zoned for commercial farming was also exempt, keeping those parcels under traditional Proposition 13 rules.
Prop 15 also would have eliminated the tax on business tangible personal property (equipment, machinery, fixtures) for qualifying small businesses, offsetting part of the broader tax shift.
Where the Money Would Have Gone
Revenue from the reassessments would have flowed into a new Local School and Community College Property Tax Fund. Roughly 60 percent was earmarked for local government services: county operations, city infrastructure, and special districts. The remaining 40 percent would have gone to K-12 public schools and community colleges.
The initiative specified that these dollars would supplement existing education budgets rather than replace current state spending. School funding guaranteed under the Local Control Funding Formula would have stayed untouched, with Prop 15 revenue layered on top. The State Board of Equalization was assigned oversight responsibility to ensure assessments across all 58 counties were equitable and uniform.1California Secretary of State. Proposition 15 – Official Voter Information Guide
The 2020 Vote
Proposition 15 appeared on the November 3, 2020 general election ballot as an initiated constitutional amendment. The campaign was one of the most expensive ballot measure fights in California history, with supporters backed by labor unions and education advocates, and opponents funded heavily by commercial real estate and business interests. Approximately 52 percent voted no and 48 percent voted yes. The margin was close enough that the Associated Press did not call the result until several days after election night.
What Applies Now Because Prop 15 Failed
Nothing changed. All California property, whether residential, commercial, or industrial, is still assessed under the Proposition 13 framework: taxed at one percent of the purchase price, with annual assessed-value increases capped at two percent.2Justia. California Constitution Article XIII A Section 2 – Tax Limitation Reassessment to current market value only occurs upon a change in ownership or new construction.
Commercial property owners who structure entity transfers so that no single transaction shifts more than 50 percent of ownership interests can continue to hold properties at their original base-year values indefinitely.3California State Board of Equalization. Change in Ownership – Frequently Asked Questions The effective property tax rate in California hovers around 0.70 percent when measured against market value, one of the lowest rates in the country.
Will Another Split-Roll Measure Come Back?
As of 2026, no new split-roll property tax initiative has qualified for the California ballot or appears to be actively circulating. The narrow defeat in 2020 suggested the concept had significant public support, but the political and financial costs of running another statewide campaign have so far discouraged a repeat effort. The core Proposition 13 framework remains untouched.