Significant Property Tax Law Change to Come Later this Month

On November 3, 2020, California voters approved Proposition 19, The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act. Beginning on February 16, 2021, there will be significant property tax law changes, specifically for families transferring real property between parents and children, or between grandparents and grandchildren if the parents are deceased.

“We are about two weeks away before the new law goes into effect,” said California State Board of Equalization (BOE) Chairman Antonio Vazquez.  “Families who planned to leave property to their children should immediately evaluate their options and make a decision that’s best for their own circumstances.”

Once operative, Proposition 19 only allows for a parent’s primary residence to be transferred without a property tax increase if their child keeps the home as their primary residence.  In addition, Proposition 19 caps the transferable amount equal to the home’s taxable value at the time of transfer plus $1 million.  The $1 million allowance will be adjusted annually beginning in 2023.  Family farms can also be eligible but further clarification is expected from the State Legislature.

Taxpayers are strongly encouraged to visit the BOE website for the latest information on Proposition 19.

The California State Board of Equalization (BOE) is the only elected tax board in the country, and it is comprised of four Equalization District Members and the State Controller. Since 1879, the BOE’s constitutional and statutory duties include the oversight of the 58 County Assessors’ assessment practices to ensure statewide uniformity and consistency. In addition, the BOE directly assesses the property of regulated railroads and certain public utilities, collects the private railroad car tax, and is responsible for the Alcoholic Beverage Tax and Tax on Insurers.  BOE’s critical role in property tax administration by promoting fair and equitable assessments protects the tax dollars that schools, local communities, and the State of California depend on every day.