About Proposition 19 (2020)
In November 2020, California voters passed Proposition 19 , which makes changes to property tax benefits for families, seniors, severely disabled persons, and victims of natural disaster in our state. In response, our Office has consolidated resources, including video tutorials, frequently asked questions, forms and reference links, on this page (see separate tabs) to help you understand and prepare for the upcoming changes.
What is Proposition 19?
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. 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.
The new law will make important changes to two existing statewide property tax saving programs:
- Replace Proposition 58(1986) and Proposition 193(1996) by limiting parent-and-child transfer and grandparent-to-grandchild transfer exclusions ( See current Prop. 58/193 here) - Effective 2/16/2021
- Replace Proposition 60(1986) and Proposition 90 (1988) programs for home transfer by seniors and severely disabled persons (See current Prop. 60/90 programs here) - Effective 4/1/2021
(Recording from Digital Family Wealth Forum: Understanding How CA Prop 19 May Impact Your Family, January 5, 2021)
Changes to Parent-and-Child and Grandparent-to-Grandchild Transfer Exclusions (Effective February 16, 2021)
Current laws allow parents, grandparents and children to pass on the existing assessed values of their primary residence and other properties up to $1 million in assessed values without reassessment. 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 19.
For more information on the current programs, please visit Reappraisal Exclusion For Transfer Between Parent and Child and Reappraisal Exclusion from Grandparent to Grandchild.
Changes to Senior Replacement Home Transfers (Effective Apri1 1, 2021)
(Video tutorial recorded by Assessor Carmen Chu in January 2021)
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. See below for the chart developed by the State Board of Equalization to compare the current law and the effects of Proposition 19.
For more information on the current programs, please visit Transfer of Assessment to a Replacement Property By Senior Citizens.
Videos from the past:
(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)
When is the deadline to claim the parent-and-child transfer exclusion(Prop 58) and the grandparent-to-grandchild transfer exclusion (Prop 193)?
According to Proposition 19 (2020), changes to the parent-child transfer exclusion (Prop. 58) and grandparent-to-grandchild transfer exclusion (Prop. 193) will be effective for property transfers that occur on and after February 16, 2021. This means that the last day to transfer a property and still be eligible for either exclusion (Prop. 58 or 193) under the old law will be February 15, 2021. If you plan to transfer property by recorded deed, please note that February 15, 2021 is President’s Day, a legal holiday, and the Recorder’s office is closed. We are expecting a high volume of document submissions during that time, any discrepancies or errors found in the process may require additional time to clarify or correct, which may cause further delay on the recording timeline. Early recording is highly recommended.
Assuming that a property is transferred before February 16, 2021, the provisions of the old law still apply, including filing a claim with the Assessor within specified time limits. The claim forms for Prop 58 and Prop 193 are available under the tab "Forms/Attachments".
If a claim is not timely filed the exclusion will be granted beginning with the calendar year in which you file your claim.
For more information on the current programs before February16, 2021, please visit Reappraisal Exclusion For Transfer Between Parent and Child and Reappraisal Exclusion from Grandparent to Grandchild.
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. Although we would like to give you as much information as possible, under California law, we are PROHIBITED from providing legal advice or assisting in document preparation.
However, for general information on recording title deed to the following documents are required at recording:
Although we would like to give you as much information as possible, under California law, we are PROHIBITED from providing legal advice or assisting in document preparation. (Section 6125 of the Business and Professions Code). Questions regarding gift tax, capital gains, methods of holding title, and other financial advice should be directed to your financial advisor and the Internal Revenue Service.
Depend on the number of pages of the deed. Generally, for pages measure 8.5”x11”, it costs $14 for the first page and $3 for any additional page within the same document. However, if the grantee (also known as transferee, buyer, receiver) will not be occupying the property on deed, an additional $75 fee will charged due to the passage of SB2(Atkins) at the California Legislature in 2017. Vist here to learn more on recording fees.
If you are unsure of the number of pages within the document, you may write on your check, below the amount line, “NTE” for “Not To Exceed” and indicate a dollar amount. The Recorder staff will write in the exact amount in the dollar amount line and complete the second line on your check to indicate the exact amount to be charged to your bank account.
Does Proposition 19 have an impact if I place my property in a living trust with my children as beneficiaries?
Please contact your trust attorney to understand your terms as every family’s dynamic is different and every trust is different. The date you transfer the property to your children determines whether the transfer will be treated according to the old law or the new law (effective on February 16, 2021). Generally, a transfer of property into your own revocable living trust is not a transfer to your children under the old law.
I recorded a Transfer on Death Deed (TODD) on my property, so I can pass it on to my children after death. Will I be impacted by Prop 19?
Transfer on Death Deed allows you to avoid probate by indicating who you would like to inherit your property after death. However, it does not protect you from changes in property tax laws. Since the date of transfer will be the date of death, that date will determine if the transfer will be treated according to the old law or the new law (effective on February 16, 2021).
The child receiving the property would need to move into the unit that was previously the parent’s principal residence to take advantage of the parent-child exclusion from reassessment under Proposition 19. The rest of the property would be reassessed to 100% of fair market value. This process would not create multiple tax bills. The amounts would be added together to create 1 tax bill with the new amount going forward.