California’s Prop 19 explained

California’s Proposition 19, effective from February 16, 2021, significantly altered the rules for property tax reassessment in cases of property transfers between parents and children. Under the new regulations, the transfer of property from parents to children (or grandparents to grandchildren, under certain conditions) may result in the property being reassessed at its current market value.

Proposition 19 changed the previous benefits afforded to such transfers. Before Prop. 19, parents could transfer their primary residence and up to $1 million of assessed value of other real estate to their children without triggering a reassessment to current market value. However, under Prop. 19, these rules have been tightened.

Now, for a property to qualify for the non-reassessment benefits, it must be the primary residence of either the parent or the child. Moreover, the value limit for exclusion from reassessment has been modified. The current assessed value plus an additional $1,022,600 (a value that was increased from $1,000,000 in 2023) can be transferred without a change in property tax assessment. Any value above this limit would be reassessed at current market rates [[1†source]][[5†source]].

This change means that for many Californians, transferring property between generations can lead to significant increases in property taxes, depending on the current market value of the property. It’s essential for individuals considering such transfers to be aware of these changes and plan accordingly.

🌐 Sources

  1. – Parent to/from Child (on/or after 2/16/21- Prop 19)
  2. – Reappraisal Exclusion For Transfer Between Parent and Child
  3. – Assessor – Proposition 19
  4. – Assessor – Proposition 19
  5. – Proposition 19 Parent to Child Transfer Calculator
  6. – Changes to California’s Parent-Child Property Tax Reassessment