On Nov. 3, 2020, California voters approved Proposition 19, which, beginning Feb. 16, will significantly change property tax laws, specifically for families transferring real property between generations.
Calaveras County voters largely opposed Proposition 19 during the 2020 general election, with 60% voting “no.”
The complicated measure, also known as “The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act,” provides tax breaks for homeowners who are 55 and older or disabled, as well as those who lost a home due to a natural disaster.
However, Proposition 19 is bad news for children who inherit a home they do not want as their primary residence.
“Once operative, Proposition 19 only allows for a parent’s primary residence to be transferred without a property tax increase if their child keeps the home as their primary residence,” the California Board of Equalization (BOE) stated in a news release. “In addition, Proposition 19 caps the transferable amount equal to the home’s taxable value at the time of transfer plus $1 million. The $1 million allowance will be adjusted annually beginning in 2023. Family farms can also be eligible but further clarification is expected from the State Legislature.”
Now, the BOE is advising families to rethink their property transference plans before the new rules come into effect in two weeks.
“Families who planned to leave property to their children should immediately evaluate their options and make a decision that’s best for their own circumstances,” BOE Chairman Antonio Vazquez said in the release.
Taxpayers can visit www.boe.ca.gov for the latest information on Proposition 19.