Residents of South Lake Tahoe will vote on a controversial measure known as Proposal N in the upcoming November election. This proposal aims to impose a tax on homes that have been unoccupied for more than six months. Many homeowners in the area utilize their properties as vacation homes, investment properties, or Airbnb rentals, and the potential tax increase is likely to generate significant backlash.
According to a report from KCRA3, the 2022 U.S. Census revealed that 44% of homes in South Lake Tahoe are vacant for most of the year. A home is classified as “vacant” if it remains unoccupied for more than 183 days within a year.
If Proposal N is passed, homeowners will be subjected to an initial vacancy tax of $3,000 during the first year, with the tax rate increasing over subsequent years, potentially reaching $6,000 or more.
The tax revenue generated from this vacancy tax is earmarked for housing, road maintenance, transportation, and administrative and legal expenses. Should the proposal gain approval, the new tax is set to take effect in 2026.
The introduction of Proposal N has resulted in a divided opinion within the community. The main opposition comes from local business organizations such as the Tahoe Chamber and the South Lake Tahoe Lodging Association. These groups have formed a coalition called “Stop the Tahoe Vacancy Tax” to advocate against the proposal.
Steve Teshara, co-chair of the “Stop the Tahoe Vacancy Tax” coalition, contends that South Lake Tahoe has long been a popular choice for second homes and vacation properties. He argues that homeowners should not be forced to rent out their properties to avoid higher taxes.
Teshara emphasizes the detrimental impact this proposal could have on second homeowners and community development. He points out that these property owners are significant consumers for local businesses, contributing to economic opportunities in the area.
Additionally, Teshara raises concerns about the fairness of the voting process. Many individuals targeted by the tax may not even be eligible to vote in South Lake Tahoe, as they might be registered to vote at their primary residences, calling into question the equity of this decision-making process.
On the other side of the debate, supporters of Proposal N, organized under the “Yes on Measure N” banner, argue that this tax is crucial for addressing the housing crisis facing South Lake Tahoe. Amelia Richmond, a member of the supporting organization, states that vacant homes are significantly impacting the ability of local residents, families, and young people to secure housing, which in turn threatens the vitality of local businesses.
Richmond explains that the goal of Proposal N is not to drive away second homeowners but to encourage more families to move into the community, thereby fostering economic growth.