We’ve seen some substantial changes in the world lately, mostly in regard things we are blatantly aware of and have affected our day to day life, such as the stay-at-home order, political changes, business regulations, etc. But there are also some pretty substantial changes relating to Propositions we voted on last year, that will take affect in 2021. They’re extremely important to be aware of and we hope to shed light on them below…

Being that we are Real Estate people, we figured we would focus on Proposition 19. Why is it important? Proposition 19 has essentially eliminated at least two other Propositions, Prop 60 & 90, and in our opinion severely altered Prop 58. All of which have been in place for over 30 years…

Prop 58: excludes from reassessment transfers of real property between parents and children

1. Allows parent to child or child to parent transfer of a primary residence with no consideration of value and prompted no tax re-assessment.
2. Although the transferor used the property as a primary residence, there were no restrictions for use on what the transferee would use it for.
3. For rental/investment/commercial properties. The transferor could transfer $1million in assessed value with no re-assessment.

Prop 19 changes:

1. There is a $1mil pad over the assessed value. If the market value exceeds the assessed value with the $1mil cap, the property is re-assessed and the difference is then added onto the original assessed value.
2. The person who inherited or was transferred the property is required to also use the property as their primary residence.
3. Rental/investment/commercial properties are now re-assessed.

Prop 60/90: allows the transfer of an existing base year value from a former residence to a replacement residence if certain conditions are met.

1. Applicant must be 55+ years of age or disabled
2. Replacement property must be in the same county or limited reciprocating counties
3. Replacement property should be of equal or lesser value.
4. This could be done 1 time

Prop 19 changes:

1. Adds victims of natural disasters to the list of applicants
2. Replacement property can be anywhere in CA
3. Replacement property can be of any value, however anything above 100% of the original value is added to the transferred value.
4. This can be done up to 3 times for those who qualify.

References: https://sfassessor.org/Prop19

*This information does not constitute legal or tax advice, consult with your CPA or Attorney.