Jan 4, 2021
Prop. 19 Alert
If you own real estate in California, it’s important that you understand the details of Prop. 19 which passed with a 51.1% vote.
We are encouraging anyone potentially impacted by Prop. 19 to contact us. Our experts have been studying Prop. 19 in-depth.
Prop. 19 allows homeowners who are 55 or older or those who lost their home in a natural disaster to transfer their tax assessment to a new home.
The tax value of the new home will be added to the current tax assessment if the new home is more expensive. This type of transfer can be done three times and you have two years to sell your current home and buy a new one.
So far so good.
Here’s where Prop. 19 presents some big obstacles for homeowners…
Prop. 19 eliminates the ability for a home to pass from a parent to a child without reassessing the home value, unless it’s the child’s primary residence.
If the child doesn’t live in the inherited home and instead chooses to rent it out, the tax value can be reassessed.
This brings up multiple questions that need to be addressed.
- What if there are multiple kids?
- Does only one child need to live in the house?
- Or all of them?
Before the passing of Prop. 19, family members could transfer a home and the property value would not be reassessed.
You could also transfer other rental or commercial properties and exempt up to $1 million of the assessed value.
Prop. 19 eliminates this which could have devastating tax ramifications to homeowners and business owners alike.
The new changes to property transfers are set to begin on Feb. 16, 2021. Property tax transfers for the elderly, disabled and natural disaster victims will apply starting April 1, 2021.