Starting in 1978 with the passage of Proposition 13, California voters have repeatedly tried to protect their homes and businesses from excessive taxation by imposing limits on property taxes and requiring two-thirds voter approval for other local taxes that disproportionately burden homeowners and businesses. Despite the clear intent of the voters, California courts have sided with the government and its special interest benefactors by creating loopholes that significantly weakened these protections.

Taxpayers are fighting back. The Save Prop. 13 Act of 2026 will reverse these court-created loopholes and restore the tax relief first started with Proposition 13.

In 2017, the California Supreme Court’s decision in California Cannabis Coalition v. City of Upland created an ambiguity as to whether the state constitution applies to local citizens’ initiatives in the same way it applies to measures placed on the ballot by a government body. Since that time, all kinds of unconstitutional taxes – backed by tax-and-spend special interests – have been imposed on Californians costing billions of dollars that they would not have had to pay if the courts followed the letter and the spirit of the law.

Virtually all the appellate courts have used the Upland loophole to allow unconstitutional new taxes to take effect. Despite our efforts to have the Supreme Court resolve the issue definitively, it has not. This statewide initiative will not only restore taxpayer rights, but it will also provide clarity in the law upholding the two-thirds vote protection.

Since Upland, several local initiative tax increases have been declared “approved” despite falling short of Proposition 13’s two-thirds vote requirement for special taxes (taxes dedicated to a specific purpose). The Upland loophole has allowed special interest groups to write initiatives that raise taxes, direct the money to themselves, and pass them with just a simple majority. The same tax increase proposed by a City Council or County Board of Supervisors would require a two-thirds vote of the electorate to pass. The Save Prop. 13 Act will amend the state constitution to restore and reinforce the taxpayer protections that voters adopted when they passed Proposition 13.

Of particular concern to all property owners is the explosion in higher real estate transfer taxes. For decades, even before Prop. 13, taxes on the sale or transfer of real property were limited to $1.10 per $1,000 of property value. However, since Prop. 13’s passage, many cities began imposing real estate transfer taxes in excess of $45 per $1,000 of value. Even worse, because of the infamous Upland decision, local governments operating under the guise of “citizen groups” can propose “special taxes” by initiative, evading the requirement of a two-thirds vote of the electorate to pass. And while the courts originally said transfer tax revenue must go into a municipality’s general fund, special taxes under Upland can be exclusively directed to whatever the local government, or special interest group, wants. The worst abuse of Upland occurred in Los Angeles where, because of Measure ULA, high-value properties are now subject to very high transfer taxes.

Because transfer taxes impose a form of “equity theft,” Prop. 13 was intended to prohibit transfer taxes and expressly stated so. But in another judicial ruling, the courts concluded that Prop. 13 only prohibited “special” transfer taxes intended for a specific purpose. For that reason, most cities choose to stay within the pre-existing state limit of $1.10 per $1,000. But the real abuse occurred when some charter cities imposed transfer taxes that exceed the state limit, especially those which exploited the Upland loophole, such as the ULA tax.

The Save Prop. 13 Act prohibits the Charter City loophole from being used in the future and also invalidates general transfer taxes that exceed the state limit, ending Measure ULA.

While there is much for taxpayer advocates to do to achieve comprehensive tax relief, the Save Prop. 13 Act of 2026 closes the major loopholes punched in California’s most important and iconic taxpayer reform — Proposition 13.

Jon Coupal is president of the Howard Jarvis Taxpayers Association.