This law goes into effect February 16, 2021.
California Proposition 19 passed in the November 2020 election. It eliminates the parent to child exclusion for property tax reassessment when the beneficiary does not use the gifted or inherited home as their primary residence and limits the property tax transfer to $1 Million of the fair market value. It also eliminates the $1 Million assessed value of investment property such as vacation homes or rental properties.
Under Proposition 19, properties which are gifted or inherited from parents to their children will be reassessed at the current market value at the time of the transfer for property tax purposes. For many people, this will likely result in a HUGE tax bill on inherited homes if they are not used as a primary residence. This could create a financial hardship for many children who inherit a home from a parent and may force them to sell the property even if they intended to keep it.
To learn more about how Proposition 19 affects your family, please contact Heather at (650) 463-1550 to schedule a consultation with attorney, James Chisel.