What happens if prop 19 passes

Recording of our first webinar is available below. Visit here to register for future events. Proposition 19 is constitutional amendment that limits people who inherit family properties from keeping the low property tax base unless they use the home as their primary residence, but it also allows homeowners who are over 55 years of age, disabled, or victims of a wildfire or natural disaster to transfer their assessed value of their primary home to a newly purchased or newly constructed replacement primary residence up to three times.

T he new law will make important changes to two existing statewide property tax saving programs:. However, under Proposition 19 these programs will be limited with fewer tax savings opportunities. See below for the chart developed by the State Board of Equalization to compare the current law and the effects of Proposition Current laws allow seniors over 55 years old and severly disabled persons to transfer the taxable value of their existing home to their new replacement home, so long as the market value of the new home is equal to or less than the existing home's value.

The program was also limited to once in a lifetime, with additional restrictions where the replacement home is located usually within the same county or within some counties that allow for reciprocity. Proposition 19 will make these programs more flexible.

Recording: Assessor Carmen Chu explained Proposition 19 proposed changes to local media before the election for educational purposes. The SF Assessor's Office was neutral on the state ballot measure. In short, the assessment year serves as the original base year value for real property assessments.

Proposition 13 also limits annual increases in the base year value of real property to no more than 2 percent, except when property changes ownership or undergoes new construction. In that case, the base year is the year in which the real property or portion thereof is purchased, changes owners, or is newly constructed.

Read more about Proposition 13 here. What should I do if I want to transfer my property to my children and claim these property tax benefits? First of all, before making any decisions, please talk to your family members and seek professional advice to understand the consequences and tax implications of transferring property ownership. Please visit the webpages on title deed and recording requirements for more information.

If the transfer is a gift, then there generally is no transfer tax. On the Preliminary Change of Ownership form, be sure to mark the gift box in part 2. In addition, on the Transfer Tax Affidavit, mark the Gift box in question 8 and completely fill out and sign the Transfer Tax Affidavit form.

If there is consideration paid, the transfer tax basis generally is the consideration paid by the buyer. Please note that the Assessor-Recorder may transmit deeds and tax affidavits for all claimed gift exemptions to the Internal Revenue Service. Our staff may not give you financial or legal advice. Questions regarding gift tax should be directed to the Internal Revenue Service or your financial advisor. A few noted the measure was written in a convoluted way.

Dal Poggetto insisted the proposition may very well benefit seniors who are moving within the state from one house to another, by allowing them to keep the lower tax rate they had. But Dal Poggetto added, when it comes to planning their estates, especially passing down their property to heirs, the proposition was somewhat confusing.

For example, the initiative increases restrictions for homeowners seeking to transfer their estates to their children by requiring the heirs live at the premises unlike old property tax rules. Josh West, a Smith Dollar attorney who handles estate planning, said the matter becomes trickier for parents with more than one child who are trying to pass down their primary residence.

Proposition 19 has forced parents to make decisions on their estates now, opposed to later on in life. Proposition Letters to Assessors Letter to Assessors No. Rulemaking Below you will find information regarding the rulemaking process related to Proposition Proposed Adoption of Property Tax Rule What is the effective date of Proposition 19?

Proposition 19, which was passed by the California voters on November 3, , became effective on December 16, , the 5th day after the Secretary of State certified the election.

However, the changes to the parent-child and grandparent-grandchild exclusion will become operative and apply to transactions on February 16, , and the base year value transfer provisions will become operative on April 1, The Board of Equalization does not have the authority to extend or change Proposition 19's operative dates of February 16, or April 1, Proposition 19 requires the transfer of the base year value to occur on or after April 1, It does not require that both the primary residence be sold and the replacement primary residence be purchased on or after April 1, Therefore, in most cases, as long as either the primary residence is sold or the replacement primary residence is purchased on or after April 1, , the base year value of the primary residence can be transferred to the replacement primary residence under Proposition As answered in the prior question, as long as either the primary residence is sold or the replacement primary residence is purchased on or after April 1, , the base year value of the primary residence can be transferred to the replacement primary residence under Proposition For example, a person over age 55 years old who has already sold their original home and expect to purchase a replacement home on or after April 1, would qualify for Proposition 19 base year transfer.

The Proposition 19 operative date for the base year value transfer provisions is April 1, Yes; however, if the full cash value of the replacement home is greater than the full cash value of the original home, the difference in full cash values will be added to the transferred factored base year value.

Proposition 19 is not dependent on the date of disaster. No, under Proposition 19, a homeowner may qualify for the base year value transfer under any one of the three categories listed; they do not need to meet all three categories in order to qualify. No, Proposition 19 is clear that Proposition 58 applies to transfers that occur on or before February 15, , and that Proposition 19 applies to transfers that occur on or after February 16, We believe that at least one eligible transferee must continually live in the property as his or her family home for the property to maintain the exclusion.

Thus if the property is no longer your family home, it will receive a new taxable value. The new taxable value will be the fair market value of the home on the date you inherited it, adjusted each year for the inflation factor, which is published by the BOE annually. No, Proposition 19 limits the parent-child exclusion to a transfer of a family home that is the principal residence of the transferor and becomes the principal residence of the transferee.

Therefore, as long as the claim is filed with the County Assessor within three years of the date of transfer or before a transfer to a third party or within six months of the date of notice of supplemental or escape assessment. Thus, the claim does not need to be filed by February 16, If the market value exceeds this limit, partial relief is available.