We believe that at least one eligible transferee must continually live in the property as his or her family home for the property to maintain the exclusion. [7], The California Association of Realtors previously sponsored and financed an initiative measure known as 2018 California Proposition 5 on the November 2018 ballot that would have further expanded Proposition 13 property tax breaks for certain homeowners (primarily homeowners over age 55) by allowing them to transfer their lower property tax base to replacement property. Amend. Please check back often for updates. As one of the most complicated measures on the November 2020 state ballot, Proposition 19 would make significant changes to California’s residential property tax system. Proposition 19 was approved . [17], The primary differences between Proposition 19 and the 2019 initiative measure withdrawn by the California Association of Realtors are that Proposition 19 excluded the expanded business entity ownership provisions that would have resulted in commercial property reassessment under Proposition 13 (to appease major business interests who did not like the business tax increase component of the 2019 initiative) and that Proposition 19 added the partial firefighting revenue provisions as a political sweetener (to appease firefighting organizations that previously opposed 2018 California Proposition 5[18]). The additional revenue raised by this measure will be allocated to wildfire agencies and counties. 13 Rules on Inheritance. Amendments, June 25, 2020, p. 4. Initiative Constitutional Amendment and Statute. Proposition 19 is effective for transfers after February 15, 2021. 19 would allow a property owner to transfer their low property tax up to three times. What is Proposition 19? Proposition 13 also restricts the amount that taxable value can go up every year to 2%, even if … Therefore, these frequently asked questions (FAQs) are intended to help property taxpayers navigate those new provisions in light of Proposition 19's lack of clarity or silence. No, under Proposition 19, a homeowner may qualify for the base year value transfer under any one of the three categories listed; they do not need to meet all three categories in order to qualify. California Initiative AG No. The proposition would expand a property tax loophole for older, mostly wealthier homeowners, while covering the cost by narrowing another special tax rule for inherited properties – and would then require state and local governments … Jim the Realtor on January 3, 2021 at 7:27 am It’s usually the recording date but this wasn’t the best written proposition in history! Assem. 1 . Alert from California State Board of Equalization. The date of death is the date of change in ownership. California Initiative AG No. THE TRANSFER PROVISIONS IN PROPOSITION 19 WERE ALREADY REJECTED BY VOTERS. [1] Proposition 19 passed with just over 51% of the vote. California voters approved Proposition 19, Changes to Certain Property Tax Rules, with 51.1% of the vote (results to be certified by December 11, 2020). Opponents of Proposition 19 have raised approximately $45,000.[33]. As passed, the proposition increases the property tax burden on owners of inherited property in favor of providing expanded property tax benefits to homeowners ages 55 years and older, disabled homeowners, and victims of wildfires and natural disasters. This measure was placed on the ballot by the legislature. 2021/010 – Proposed Property Tax Rule 462.520, Proposition 19 – Initial Interpretational Questions and Answers, Senate Bill 539 (Introduced on February 18, 2021), Senate Bill 668 (Introduced on February 19, 2021), Proposition 19 Fact Sheet (as of February 1, 2021), Introduction to Proposition 19 Presentation (as of February 1, 2021), Listing of County Assessors, Auditors and Auditor-Controllers, Clerks of the Board, and Tax Collectors, Proposition 19 Analysis and Implementation Planning Matrix, California Department of Tax and Fee Administration, Residence and homesite (excess land may be excluded as "other property"), Principal residence of transferor and transferee, Value limit of current taxable value plus $1,000,000 (as annually adjusted), Transferor lifetime limit of $1,000,000 of factored base year value, Eliminates exclusion for other real property other than the principal residence, Parent(s) of grandchild, who qualifies as child(ren) of grandparent, must be deceased on date of transfer, No change:  parent(s) of grandchild, who qualifies as child(ren) of grandparent, must be deceased on date of transfer, File claim within 3 years or before transfer to third party, File for homeowners' exemption within 1 year of transfer, Revenue & Taxation Code section 63.1 (implements Propositions 58/193), Purchase or newly construct residence within 2 years of sale, 100% if replacement purchased/new construction prior to sale, 105% if replacement purchased/new construction in first year after sale, 110% if replacement purchased/new construction in second year after sale, Amount above 100% is added to transferred value, Exception:  After using once for age, second time for subsequent disability, Revenue & Taxation Code section 69.5 (implements Propositions 60/90/110), Purchase or newly construct property within 5 years of disaster, Amount above 120% is added to transferred value, Disaster for which the Governor proclaims a state of emergency, Wildfire, as defined, or natural disaster as declared by the Governor, Revenue & Taxation Code section 69 (implements Proposition 50), Purchase or newly construct principal residence within 3 years of disaster, Purchase or newly construct principal residence within 2 years of sale, 105% if purchased/new construction in first year after disaster, 110% if purchased/new construction in second year after disaster, 115% if purchased/new construction in third year after disaster, Revenue & Taxation Code section 69.3 (implements Proposition 171). Amend. 19-0003, June 25, 2020. The statewide taxpayers association received many calls from voters who said they were disgusted by the misleading radio ads and large direct mail pieces by the Yes on 19 campaign. Proposition 19, also referred to as Assembly Constitutional Amendment No. The Board of Equalization does not have the authority to extend or change Proposition 19's operative dates of February 16, 2021 or April 1, 2021. However, future legislation may impact the operation of Proposition 19 and any updates will be posted on the Board’s website. If Proposition 19 is approved by the voters, the changes will be effective on February 16, 2021 (for the parent-child exclusions), and April 1, 2021 (for the base year value transfer by … Proposition 19, which was passed by the California voters on November 3, 2020, became effective on December 16, 2020, the 5th day after the Secretary of State certified the election. It takes away one of the best tools parents have to help their children—the right, enshrined in California’s Constitution since 1986, to pass their home and other property on without any increase in property taxes. Refer to the guidance issued below in the form of Letters to Assessors and Chief Counsel Memos regarding Proposition 19. [15], Significant controversy arose because the legislative approval of ACA 11 missed the regular legal deadline for placing measures on the November 2020 ballot, and the Legislature also had to enact a separate statute calling a special election for ACA 11 that was consolidated with the regular November 2020 election. Highlights of the approved measure are as follows: Transfer of Base Year Value Homeowners who are over the age of 55, disabled, or victims of a wildfire or natural disaster are… It is not expected that base year value transfers that have already been processed under, It is anticipated that three transfers under Proposition 19 will be allowed regardless of whether a property owner transferred a base year value in the past under. No. The non-partisan Legislative Analyst’s Office projects that Proposition 19 could eventually cost California families about two billion dollars annually in higher property taxes. Stats. On November 3, 2020, California voters approved Proposition 19, t he Home Protection for Seniors, Severely Disabled, Families and Victims of … [27], It was reported[28] that the California Association of Realtors, the sponsor of Proposition 19, hired a former employee of a statewide taxpayer association for the sole purpose of using the former employer's job title to confuse voters to support Proposition 19. "[25], According to data from the Los Angeles County Assessor, the significant curtailment of the property tax inheritance exclusion under Proposition 19 would adversely impact many property owners in minority communities. Measure would change several facets of property tax rules in California", "California voters approve Prop. Under the current law, a property owner can leave their primary residence and up to $1,000,000 of assessed value of other real estate to their children, and the assessed value would transfer with the property to the child. Proposition 19 is effective on and after April 1, 2021, and also requires that a replacement primary residence is purchased or newly constructed as a person’s principal residence within two years of the sale of the original primary residence. 19 reinforces racial inequity within California's tax system. The value limit under Proposition 19 is the sum of the factored base year value plus $1 million. 26, effective June 30, 2020. However, the changes to the parent-child and grandparent-grandchild exclusion will become operative and apply to transactions on February 16, 2021, and the base year value transfer provisions will become operative on April 1, 2021. 19 Radically Altered Prop. [26] For example, significantly more property owners have claimed the property tax inheritance exclusion in the city of Compton than in the cities of Beverly Hills and Malibu combined. But David Yeung, deputy director of the California Board of Equalization’s property tax department, said, “If Prop. Prop. If the market value exceeds this limit, partial relief is available. [11] This initiative measure received sufficient signatures to qualify for the November 2020 ballot. Friday, July 17: Proposition 18, allowing 17 year olds to vote. Effective February 16, 2021, Proposition 19 will substantially restrict the availability of the parent-child exclusion from property tax reassessments. 2020, res. It is not intended to be a legal interpretation or official guidance or relied upon for any purpose, but is instead a presentation of summary information. 11, is a complex California ballot proposition that appeared on the ballot for the general election on November 3, 2020. If there is a conflict between the information presented and the text of the proposition or its implementation, the text of the proposition or legal interpretation will prevail. The effective date of proposition 19 is February,16, is this the recording date, or signing the document date? Proposition 19, also referred to as Assembly Constitutional Amendment No. TEXT OF PROPOSED LAWS PROPOSITION 19 CONTINUED subparagraph (A) plus one million dollars ($1,000,000), then zero dollars ($0). Initiative Constitutional Amendment. However, because the COVID-19 pandemic has created significant uncertainty for the state budget, the Legislative Analyst believes that the vast majority of the wildfire funding will not be available until 2025 at the earliest. 11, Concurrence in Sen. Prop 19 has passed, it will result in an increase in property taxes for transfers of California real property between parents and children. Unfortunately, Proposition 19 did not have companion legislation that would have clarified a host of issues. However, to generate a net increase in property tax revenue, the initiative also significantly narrowed Proposition 13 property tax reassessment exclusion rules for inherited properties and expanded the scope of business entity ownership changes that would result in commercial property reassessment under Proposition 13. Prop. Thursday, July 16: Proposition 17, expanding voting rights to include parolees. California Proposition 19, the Property Tax Transfers, Exemptions, and Revenue for Wildfire Agencies and Counties Amendment, was on the ballot in California as a legislatively referred constitutional amendment on November 3, 2020. Ballot Pamphlet, California General Election (November 6, 2018), argument against Proposition 5, p. 39. It does not require that both the primary residence be sold and the replacement primary residence be purchased on or after April 1, 2021. The Proposition 19 operative date for the base year value transfer provisions is April 1, 2021. The law in effect as of the date of death will apply. The proposition applies to transfers of residences occurring on or after Feb. 15, 2021. 19-0003 (2019). Proposition 19, which received 51% of the votes, is expected to produce additional revenue for schools, local governments and firefighting districts. It is anticipated that these FAQs will be updated periodically with additional questions, particularly if legislation is enacted or further guidance is issued by the Board. To assist taxpayers, the following tabs provide general information on Proposition 19. This memorandum, including questions and answers, represent the initial thoughts of the Legal Department and may be subject to change. 19, giving new property tax breaks to older homeowners", "California Proposition 19, Property Tax Transfers, Exemptions, and Revenue for Wildfire Agencies and Counties Amendment (2020)", "Proposition 19 Official Title and Summary | Official Voter Information Guide | California Secretary of State", "November 2020 Ballot Initiatives in California Aim to Change Policy on Commercial and Residential Properties", "Proposition 19: Creates a Complicated Property Tax Scheme and Reinforces Racial Inequities in California", "California Initiative Editorial Scorecard #3", "Campaign Finance Power Search, Ballot Measures Advanced Search (November 3, 2020 Ballot Measures, Proposition 19)", https://en.wikipedia.org/w/index.php?title=2020_California_Proposition_19&oldid=1010479417, Creative Commons Attribution-ShareAlike License, Allows homeowners who are over 55 years of age (without regard to wealth), disabled, or victims of natural disasters to transfer their existing property tax assessed value under. With Proposition 19’s approaching effective date, there is a limited window for transfer tax planning options. All this made Proposition 19 a huge departure from previous California law. Proposition 19 eliminates what has been dubbed the “Lebowski Loophole.” [8] That ballot measure failed statewide with 40% support, and also failed to receive majority support in all 58 California counties. 2020/061 – Proposition 19, Letter to Assessors No. If Proposition 19 passes, individuals owning real properties in California should consult an estate planning attorney to discuss their options, such as transferring real property to their children now or holding real properties in a legal entity. Prop 19 Zoom Seminar 12/22/2020 . By directing additional tax benefits largely to white homeowners, Prop. The amount exceeding the excluded amount will be added to the factored base year value. No, Proposition 19 limits the parent-child exclusion to a transfer of a family home that is the principal residence of the transferor and becomes the principal residence of the transferee. Significantly limits the existing property tax benefits under Proposition 13 for certain real estate transfers between family members, such as the transfer of property from a parent to a child following the death of the parent. Proposition 19 builds off of Proposition 13, passed in 1978, which limits property taxes to 1% of a home’s value, based on the year the house was purchased. To assist taxpayers, below are comparison charts reflecting the effects of Proposition 19. The enactment of Proposition 19 may have you reassessing your future plans as to buying, selling, or transferring ownership of property before the measure takes effect, which is set to begin on Feb. 16, 2021. 95–97. It was placed on the statewide ballot by the Legislature by March 9, 2021 Changes Requirements for Certain Property Owners to Transfer Their Property Tax Base to Replacement Property. [3] According to the California Legislative Analyst, Proposition 19 is a large net tax increase "of hundreds of millions of dollars per year. [22] The president of the California Association of Realtors has denied that Proposition 19 is about making money for the Realtors. 2020, Ch. What is the effective date of Proposition 19? Thus if the property is no longer your family home, it will receive a new taxable value. California Secretary of State, Chief Counsel Letter Re Conditional Acceptance of Conditional Withdrawal of Initiative AG No. Los Angeles County Assessor, Propositions 58 and 193 exclusion dataset (2017) [breakdown by cities]. 11 (ACA 11). To assist taxpayers, below you will find information on legislation related to Proposition 19. [2] As passed, the proposition increases the property tax burden on owners of inherited property in favor of providing expanded property tax benefits to homeowners ages 55 years and older, disabled homeowners, and victims of wildfires and natural disasters. Proposition 19, which was passed by the California voters on November 3, 2020, became effective on December 16, 2020, the 5th day after the Secretary of State certified the election. What is Proposition 19? According to the … [19], Thus, compared to the 2019 initiative measure, Proposition 19 retained the expanded Proposition 13 property tax breaks for certain homeowners (primarily homeowners over age 55) like those contained in the defeated 2018 California Proposition 5 ballot measure, retained the property tax increase provisions by significantly narrowing Proposition 13 property tax reassessment exclusion rules for inherited properties, and added the partial firefighting revenue provisions as a political sweetener. It is highly encouraged that you consult an attorney for advice specific to your situation. ch. [20], The California Association of Realtors sponsored the Proposition 19 constitutional amendment,[21] with the expectation of deriving significant profits from many more home sales under the ballot measure, including from both the expanded tax benefit portability provisions and from the significant narrowing of the inheritance exclusion provisions which will force more home sales. Our goal is to provide a good web experience for all visitors. (AP Photo/Noah Berger, File) ... 19. 31. Const. *** California Proposition 19: Property Tax Transfers, Exemptions, and Revenue for Wildfire Agencies and Counties Constitutional Amendment. Just over 51% of voters supported Proposition 19 when the Associated Press called the race Wednesday evening, when returns showed the measure had a … Proposition 19 will go into effect on February 16, 2021. California Secretary of State, Statement of Vote November 6, 2018 General Election, pp. Note: The information presented is intended to provide general and summary information about Proposition 19. "[4], According to the ballot summary, Proposition 19:[5], The proposition becomes effective on February 16, 2021. No. Prop 19 limits the availability of the parent-child exclusion for purposes of real estate tax assessments. Therefore, in most cases, as long as either the primary residence is sold or the replacement primary residence is purchased on or after April 1, 2021, the base year value of the primary residence can be transferred to the replacement primary residence under Proposition 19. [29], According to the California Initiative Editorial Scorecard, Proposition 19 was opposed by 16 major California newspapers and supported by 7 major California newspapers. For assistance or questions, please contact the Property Tax Department by phone at 1-916-274-3350 or by e-mail. The undersigned certify that, as of June 28, 2019, the internet website of the California State Board of Equalization is designed, developed and maintained to be in compliance with California Government Code Sections 7405 and 11135, and the Web Content Accessibility Guidelines 2.1, or a subsequent version, June 28, 2019, published by the Web Accessibility Initiative of the World Wide Web Consortium at a minimum Level AA success criteria. "What is Prop.19? Los Angeles County Assessor, Propositions 58 and 193 exclusion dataset (2017). California Secretary of State AP 20:040, New Measure Eligible for California's November 2020 Ballot, April 23, 2020.