Proposition 19 is the modification of rules surrounding the inheritance of property. Here's how it works: Parent-to-Child Transfers: Under Proposition 19, the parent-to- child transfer exclusion is significantly limited. Previously, children could inherit their parents' property without a property tax reassessment. Now, only primary residences are eligible for this exclusion, and even then, there are restrictions. If the child does not use the inherited property as their primary residence or its value exceeds a specific threshold, a partial reassessment may occur. Other Property Transfers: For non-primary residence properties, such as second homes or rental properties, Proposition 19 eliminated the parent-to-child exclusion. This means that when children inherit such properties, they will likely face a property tax reassessment based on the current market value, potentially resulting in higher property taxes. Implications and Considerations Understanding the implications of Proposition 19 when inheriting property is crucial for Californians. Here are some key considerations: Primary Residence Requirement: To retain the parent-to-child transfer exclusion, the child inheriting the property must use it as their primary residence within one year of the transfer. Failure to do so could lead to a reassessment. Value Threshold: Proposition 19 sets a value threshold for primary residences. If the inherited property's value exceeds this threshold, a partial reassessment will occur, and property taxes may increase.
Planning and Consultation: Estate planning is now even more
76
Powered by FlippingBook