By Eric Engelbert
Understanding the Impact of Proposition 19 on Tax Assessment Transfers
In California, Proposition 19 has brought about significant changes regarding tax assessment transfers for eligible homeowners. Previously, those aged 55 and above, individuals with severe disabilities, or victims of wildfires and natural disasters could transfer their tax assessments to another home within the same county, of equal or lesser market value, enabling them to relocate without facing higher taxes. However, with the implementation of Proposition 19 starting from April 1, 2021, eligible homeowners can now transfer their tax assessments to any location within the state. Furthermore, this proposition allows for the transfer of assessments to more expensive homes, albeit with an upward adjustment.
Analyzing the Impact of Proposition 19 on Inherited Property Taxes
Proposition 19 in California introduces a significant change to the way parents or grandparents can transfer their primary residence to their children or grandchildren while avoiding a reset of the property's tax assessment to market value. However, it's important to note that this exemption from reassessment only applies when the property being transferred was the primary residence of the qualifying parent(s) or grandparent(s), and the child or grandchild continues to use it as their primary residence. To benefit from this exemption, homeowners must apply for a homeowners exemption within one year of the qualifying transfer. As of February 16, 2021, Proposition 19 eliminates the parent-to-child and grandparent-to-grandchild exemption when the inherited property is not used as the primary residence by the child or grandchild. Consequently, properties inherited but not used as primary residences are now subject to tax reassessment at market value and can no longer be transferred without undergoing this reassessment.
