Do you know how it changes the tax rules on primary residences? Proposition 19 will have potentially severe financial consequences for children inheriting property from their parents. Approved by California voters in the November election, Prop. 19 marks a landmark change to Prop. 13, the 1978 law that aims to limit property taxes.
Eligible homeowners may now transfer their tax basis anywhere within the State and to a property of greater value, whereas previously homeowners were limited to transfers within certain counties and to homes of the same or lesser market value. Prop. 19 increases the number of times that certain people may transfer their tax assessments. If a person is 55 years or older, has severe disabilities, or lost a home in a natural disaster, the person may transfer their tax assessment up to three times now (up from one). The new law also requires market-value reassessments for inherited properties that are not used as the heir’s principal residence.
The intergenerational transfer rule went into effect this month and the tax portability portion begins April 1. If you would like a copy of the California Association of Realtors’ Quick Guide to Prop 19, just let me know — jf@JoanneFishman.com.