On Nov. 3, 2020, California voters approved Proposition 19, The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act. As of Feb. 16, 2021, there will be significant property tax law changes, specifically for families transferring real property between parents and children, or between grandparents and grandchildren if the parents are deceased.
“We are about two weeks away before the new law goes into effect,” said California State Board of Equalization (BOE) Chairman Antonio Vazquez. “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.”
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. 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.
Taxpayers are strongly encouraged to visit the BOE website for the latest information on Proposition 19.