Blog

Parent to Child Transfer of Property with California Proposition 19

By Jonathan Brooks

Preventing a property tax reassessment may save a beneficiary or heir thousands of dollars annually depending on the difference between the existing assessed value and the current reassessed property value. First Probate Loans is the originator of the property reassessment tax strategy loan and we are here to assist you and your clients to qualify for this exclusion.
California’s Proposition 19, became effective April 1, 2021 replaced California’s Proposition 58, which became effective on November 6, 1986. With certain limitations, Prop 19 allows for the exclusion for reassessment of property taxes on transfers between parents and children. Proposition 19 is codified by Section 63.1 of the Revenue and Taxation Code. In the State of California, real estate or real property is reassessed at market value if it is sold or transferred. Property taxes can sometimes increase dramatically as a result. If the sale or transfer is between a parent and their child, under limited circumstances, the property will not be reassessed if certain conditions are met and the proper application is filed in a appropriate amount of time. Proposition 19 allows the new property owner to avoid property tax increases when acquiring property from their parents. The new owner’s taxes are instead calculated on the established Proposition 13 factored base year value, instead of the current market value when the property is acquired.
There are some limitations to Proposition 19. For instance, on non-primary residences transfers of the first $1 million of real property. The $1 million exclusion applies separately to each eligible transferor. These transfers may be the result of a sale, gift, or inheritance. A transfer via a trust also qualifies for this exclusion.
For California Proposition 58, there are limitations for who is eligible. Here are the existing guidelines. A “child” for purposes of Proposition 58 includes any child born of the parent(s), any stepchild while the relationship of stepparent and stepchild exists, any son-in-law or daughter-in-law of the parent(s), and any adopted child who was adopted before the age of 18. Spouses of eligible children are also eligible until divorce or, if terminated by death, until the remarriage of the surviving spouse, stepparent, or parent-in-law.

About The Author

Jonathan Brooks
Jonathan Brooks, President of First Probate Loans Jonathan maintains highly specialized expertise in California real property, finance/lending, and trust and estate laws. He has completed nearly 10,000 financial transactions to estates and trusts in more than 25 years of probate loan management work. Jonathan is a trusted source for attorneys throughout California, as well as for mediation and arbitration judges. A recognized industry expert, he serves as a single source for estate mortgage borrowing needs. California Bureau of Real Estate Broker # 01881423 Nationwide Mortgage Licensing System and Registry NMLS # 307111 Paralegal

1 Comment

  • CRAIG GALLUP on August 3, 2020

    Trying to secure a loan and maintain Parent to Child Transfer of Property with California Proposition 58.

Leave a Reply

Encino Law Center
15915 Ventura Blvd.
Suite 203
Encino, CA 91436

How Can We Help? Contact Us Today

Send us an email via the form below, or call our office directly. We look forward to assisting you with your Probate and Trust Loan needs.

Contact Us