For decades, California parents could pass a home to their children and keep the low, Proposition 13 property-tax basis, even on a second home or rental. Proposition 19, effective February 16, 2021, changed that.
Under Prop 19, the parent-child exclusion from reassessment now applies only when the child makes the home their primary residence, and even then the protection is capped. Inherited second homes and rentals are generally reassessed to current market value, which in our area can mean a dramatically higher property-tax bill.
There is a related benefit for owners. Homeowners who are 55 or older, severely disabled, or victims of a wildfire or natural disaster can transfer their existing tax base to a replacement home anywhere in California, up to three times.
Prop 19 is one of the biggest reasons Conejo Valley families revisit their plans. Depending on your goals, there may be options worth discussing before a transfer happens, because some choices are hard to undo afterward.
This is general information, not tax or legal advice. The county assessor administers these rules, and we can help you understand how they apply to your family.
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This article is general information, not legal advice, and does not create an attorney-client relationship. Estate and business law change and depend on your specific situation. Speak with Donald W. Flaig before acting.