Prop 19, with 18.5 M of realtor funding, has no paid opposition and voters don't know the facts. Marketed as benefitting seniors and wildfire fighting and only taxing the rich, Proposition 19 will increase property taxes for every home/property-owning family in California. It will eliminate protections granted by prior constitutional amendments (Propositions 13, 58 and 193) that allowed the transfer of a limited amount and value of property between parents/grandparents and children/grandchildren. It will push average Californians out of their homes and family properties.
· Will require reassessment at the date of death of all California real estate transferred to or from parents/grandparents;
· Parent/child exclusion requirements are so restrictive that few families will qualify, even when children/grandchildren live in family homes or intend to;
· Amount of tax increase is unknown until a retroactive reassessment bill comes from the assessor!
· Firefighting funds have few standards, little oversight and no end date, a recipe for government waste and misspending.
1. Proposition 19 will increase taxes on every California property owning family, to unknown levels, from date of death
Voters need to know their tax bills go up the day Mom dies!
California law has a "general principle that transfers by reason of death occur at the time of death." (See CA Rev. & Tax. Code § 63.1(g)). Proposition 19 ensures that all transfers between parents and children that do not qualify for an exclusion (described below) will be reassessed to current market value at the date of death. Family members will receive a retroactive tax bill for property taxes incurred when the family is grieving and settling an estate, or trying to sell real estate, which can take years. Will families have funds to pay?
2. Proposition 19 Designed so Few Families Qualify for Exclusion from Reassessment with Multiple Exceptions requiring Reassessment
Exclusion Limited to Principal Residence of Parent/Grandparent. All other real properties are reassessed at current market value at date of death/purchase/transfer.
Beneficiary of Exclusion Required to Live in Principal Residence at Death/Purchase/Transfer or Within 1 Year. Failing to do so would result in a reassessment of principal residence at current market value, even if parents or siblings live in home.
Owner-Occupier Declaration Filing Required Within 1 year of Death. The Proposition 19 exclusion requires a child (or qualifying grandchild) to file a homeowner's exemption (an owner-occupier declaration) within one year of purchase/transfer/death. How many estates will be able to meet this requirement? From 2016-18, per California Court Statistics, up to 41% of CA probate cases are still pending after a year, and no one files the day Dad dies!
Value Limitations. Even when all other exclusion requirements are met, the parent/grandparent's principal residence is still reassessed to current market value. Any amount over $1 M plus the established Proposition 13 basis will be subject to additional taxes.
Land Under Principal Residence May Require Reassessment. Even assuming qualification for the parent/child exclusion, an exclusion for the "principal residence" doesn't necessarily apply to the entire property containing the principal residence, and some of the land may need to be reassessed. (That is one reason the old rule, allowing a limited value of other property to be transferred without reassessment, makes sense.) Again, another tax families can't predict, with standards that change over time!
Everyone who inherits, purchases or transfers a family property will be subject to tremendous uncertainty: What is the new tax bill? Will my family qualify for the exclusion? To what extent? Will we be able to meet deadlines? Will the estate have enough money to pay unknown property tax bills?
None of these requirements burden the wealthy! Proposition 19 was drafted to maximize taxes on average Californians, intending to drive them from family homes and properties, so realtors get more sales/commissions.
Please join me in getting active and communicating the real story to news sources, opinion makers/influencers, friends and family, neighborhood and network. Every voter and property owner needs to understand Proposition 19. It will take all of us to defeat nearly $18.5 Million in deceptive advertising, because no one is funding an opposition but we can do it.
Here's some additional background, analysis and links to further resources: