Proposition 19 is a constitutional initiative passed by California voters (pending certification on 12/11/2020) that changes the rules for tax assessment transfers. In California, eligible homeowners can transfer their tax assessments to a different home of the same or lesser market value, which allows them to move without paying higher taxes. Homeowners who are eligible for tax assessment transfers are persons over 55 years old, persons with severe disabilities, and victims of natural disasters and hazardous waste contamination.
It allows eligible homeowners to transfer their tax assessments anywhere within the state and allows tax assessments to be transferred to a more expensive home with an upward adjustment. The number of times that a tax assessment can be transferred would increase from one to three for persons over 55 years old or with severe disabilities (disaster and contamination victims would continue to be allowed one transfer). These expanded special rules will become effective as of April 1, 2021.
In California, parents or grandparents can transfer primary residential properties to their children or grandchildren without the property’s tax assessment resetting to market value. Other types of properties, such as vacation homes and business properties, can also be transferred from parent to child or grandparent to grandchild with the first $1 million exempt from re–assessment when transferred. Prop 19 eliminates the parent–to–child and grandparent–to–grandchild exemption in cases where the child or grandchild does not use the inherited property as their principal residence, such as using a property as a rental house or a second home. The property tax bill for an inherited home or farm would go up if the price the property could be sold for exceeds the property’s taxable value by more than $1 million (adjusted for inflation every two years).
These special rules regarding inherited properties will become effective as of February 16, 2021.
Prop 19 creates the California Fire Response Fund (CFRF) and County Revenue Protection Fund (CRPF). It requires the California Director of Finance to calculate additional revenues and net savings resulting from the ballot measure. The California State Controller would be required to deposit 75% of the calculated revenue to the Fire Response Fund and 15% to the County Revenue Protection Fund. The County Revenue Protection Fund would be used to reimburse counties for revenue losses related to the measure’s property tax changes. The Fire Response Fund would be used to fund fire suppression staffing and full–time station–based personnel.
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Corinthian Title Company is locally owned and operated with corporate headquarters in San Diego, California. We are currently licensed to issue title insurance policies in 28 Counties within the State of California. This allows us to provide our services to approximately 90% of the population in California and covers most major metropolitan areas. Corinthian Title has developed a reputation for providing the very best service and products in the industry. We have office locations throughout Southern California and have attracted the best title and escrow professionals in the industry. This is why, “Our Employees Make the Difference.”
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All information contained herein is for informational purposes only and is not intended to offer advice -- legal,
financial or otherwise -- about specific real estate transactions. Information is deemed reliable but not guaranteed.
Always consult a real estate professional, attorney and or tax advisor before making decisions about your real estate transaction or situation.
