Did you know that Proposition 19 regarding property tax re-assessment, becomes effective February 16, 2021? Proposition 19 is of specific importance if you plan to keep a property in the family long-term or if you own a property where your child already lives.
The great news is that under current California law, a parent may transfer the following types of California real property to a child without triggering property tax reassessment:
1. Principal residence of unlimited fair market value;
2. The first $1 million of assessed value of any other type of real property, not a primary residence;
3. Transfers in trust for a child or children can also qualify for the parent-child exclusion.
Proposition 19 requires property tax reassessment when a parent transfers real property to a child, except when a parent transfers their principal residence to a child, if the child lives in the residence - as their primary home, and the current fair market value of the residence does not exceed the current assessed value of the residence by more than $1 million. Therefore, parents who own real estate with low assessed value should consider whether a transfer of that property prior to February 16, 2021 makes sense. Transfers can occur by gift, sale or long-term lease, or to certain trusts.
As your trusted real estate adviser, I want to keep you informed about what is happening in the market NOW! Questions? Call me, I will help YOU!
Lisa Vomero Inouye
Big Block Realty