Pros and Cons of California's Prop 19 (2022)

Updated September 30, 2021

California Proposition 19 passed by a slight majority on Election Day 2020, forever changing the landscape of the Golden State’s housing market. In short, Prop 19 makes it easier for certain groups of homeowners to relocate within the state, but perhaps at the expense of homeowners who inherit property.

Pros and Cons of California Prop 19

PROS

  • Protects Property Rates for Certain Residents
  • Makes Upgrading/Downgrading Easier
  • Funds Needed Improvements

CONS

  • Restricts Property Transfer Tax Rates
  • Makes Retaining Inherited Property Difficult
  • May Create a Middle-Class Exodus from the State

What is Prop 19 in California?

Prop 19 was a ballot measure introduced to voters for a statewide referendum in California’s November 3, 2020 election. California’s Proposition 19, or Assembly Constitutional Amendment No. 11 as it’s also called, was widely supported by the California Association of Realtors and other real estate agent associations, along with the California Professional Firefighters. Previous versions of the ballot measure failed to garner sufficient support in 2018 under the guise of Proposition 5, but in 2020 Prop 19 passed with a 51 percent vote.

What this means for California voters moving forward is property tax savings for older homeowners, more revenue for fire districts, and greater mobility for wildfire victims. However, this tax break will not apply to every homeowner, as it significantly modifies the parent-child exclusion that previously allowed a property owner inheriting property to retain the tax rate of their principal residence instead of triggering a new property tax rate during the transfer.

What is the Effective Date of Proposition 19?

Prop 19 went into effect on February 16, 2021. There has been a flurry of estate planning activity between Election Day (when it passed by a narrow margin of one percent) and the day it went into effect. Today, Prop 19 is in full effect, at least until new legislation is passed. Prop 19 was proposed to change California Prop 13 (which passed in 1978), so it is entirely possible that the law could be modified at a future date.

One of the most important components of Prop 13 was limiting California property tax to one percent of a property’s assessed value, setting assessed values at their 1976 value unless the home saw a change in ownership or additional construction. The law also capped the annual increase of the assessed tax value at two percent per year. This is a huge boon for California residents, where home values were subject to increase by as much as 10 percent per year, in contrast to the national average increase of around three percent.

(Video) Prop 19 California - Pros and Cons - Explained

What Were the Goals of California Prop 19?

As mentioned, the overall goal of Prop 19 was to provide more comprehensive tax benefits to certain groups of California residents, namely, those 55 and older, victims of wildfires and other natural disasters, and disabled homeowners. Prop 19 helps California residents falling into these categories with relocation. Whether it’s because of unforeseen circumstances—like one of California’s increasingly ubiquitous summer wildfires—or personal life transition, such as an older couple wanting to move into a smaller, more manageable home.

In return for these benefits, other homeowners could pay a price—namely, individuals who inherit a home. However, as we will see, there is a way around this issue for California residents who want to hold on to inherited property, and it’s a legal vehicle that should be used by most homeowners anyway, especially those with valuable property or multiple properties.

California Prop 19 Pros

Protects Property Rates for Certain Residents

As mentioned, property values in California generally see a strong increase from year to year. This can make moving difficult. But for certain residents, moving into a different home is a necessity. Individuals over the age of 55 often want or need to downsize their residence to a more manageable property. Ironically, even though the property might be smaller, the move might increase annual expenses, especially if the owner has resided in the same house for decades. This is because Prop 13 capped ad valorem growth at two percent per year, regardless of market values.

Previously, transferring ownership would trigger a reassessment, which means that an elderly couple moving into a smaller home could still be looking at a sizable adjustment to their annual property tax bill. Now that Prop 19 has passed, these residents can transfer their tax basis (that is, the value of the property used to calculate taxes) to any other residence in the state up to three times.

Makes Upgrading/Downgrading Easier

Senior residents in search of an easier home to manage are not the only ones looking to make moves within the Golden State. Upwardly mobile professionals in the last few decades of their working life often want to move into a nicer home. In many areas around the country, this is a reasonable financial venture, even if it makes their annual tax bill go up. But in California, the cost of real estate can make this type of upgrade cost prohibitive. This creates reduced mobility for homeowners who would like to move to a better neighborhood.

Prop 19 makes it easier for residents over the age of 55, disabled homeowners, and residents impacted by natural disasters to relocate because they can keep the ad valorem tax rate of their old property. And as mentioned, these types of individuals seeking a downgrade for financial or property management reasons receive the same type of benefit.

Funds Needed Improvements

Another winner with the passage of Prop 19 is the State of California itself, as well as the residents that benefit from its infrastructure. According to some estimates, the additional revenue collected from inherited properties will generate as much as $2 billion annually.

Proponents of Prop 19 state that these funds will assist in funding fire prevention, affordable housing, cleaner drinking water, and other community ventures. In regards to fire prevention, some California news publications argued that Prop 19 would bring much needed relief to suburban communities impacted by California’s wildfires, which according to some estimates have doubled since the 1980s.

Wildfire victims displaced by these events would have an easier time relocating and moving into new property within the state, so that they wouldn’t need to uproot their lives and move to a state with more affordable property tax rates.

(Video) California Prop 19 explained: Property Tax Transfers

California Prop 19 Cons

Restricts Property Transfer Tax Rates

Prior to the passage of California Prop 19, parents could transfer property to their children, and the transferred property would retain its tax basis despite the change in ownership. But now with Prop 19, inherited property used as a primary residence will be reassessed for its ad valorem tax basis.

A slight upside in the matter is that up to $1 million can be excluded from the property’s assessed value, but this isn’t much use to a resident inheriting a home with a property value less than seven figures. Moreover, residents inheriting homes with market values more than $1 million are likely to see a bigger tax bill. Additionally, the $1 million exclusion is only for an inherited primary residence. Rental properties, vacation homes, or investment properties are subject to this exclusion. They will be reassessed at their market value up ownership transfer, resulting in bigger tax bills.

Makes Retaining Inherited Property Difficult

As you can imagine, these changes will give inheritors of personal and rental property something to think about in terms of whether or not they want to or can afford to keep the property that has been bequeathed to them.

Since 2010, more than 650,000 Californians have inherited property in the Golden State. This property was an attractive asset because the two percent cap on ad valorem increases created a very low tax bill in comparison to the property value. In the case of rental properties, this meant collecting more rent and paying less taxes. In the case of personal property, this might have meant a family residence or a desirable vacation home that was affordable to hold on to for future generations.

Tangentially, supporters of Prop 19 argued that many California residents who obtained a home with the desirable tax breaks afforded by Prop 13 did not actually live in these homes, but rented them out. Most notorious among examples of this situation was that of actor Jeff Bridges (The Big Lebowski), who inherited a beachfront Malibu home from his parents with panoramic views of the Pacific Ocean. Bridges did not live in the residence, but rented it out for $15,000 a month.

May Create a Middle-Class Exodus from the State

Not all inherited property is a beachfront home in Malibu. Many homes were passed on from middle class homeowners to their children, providing them with homes in areas that would otherwise be impossible for them to move into, such as the San Francisco Bay Area.

These homeowners are now looking at an increased tax bill that makes remaining in their current location financially difficult. These residents may choose to sell their property and head to a more affordable part of the state, but as it turns out, property values in most areas of California are pretty steep. This makes nearby states like Colorado, Oregon, Arizona, and Nevada (to name a few) more attractive. One unintended side effect of Prop 19 may mean that middle class families start leaving the state in search of more affordable living, only time will tell.

Is Prop 19 Fair?

Interestingly, supporters of Prop 19 point to an inverse dilemma, where homeowners moving into a new property feel trapped after just a few years of living there. Their tax bill would be significantly higher than it was in their old home, and if it became untenable to continue paying, the value of their new property might make it difficult to sell.

Additionally, Prop 13 created a strange demographic situation where someone who had just purchased a $2 million home would be paying $20,000 in taxes, while a next-door neighbor living in a similarly priced home for decades is only paying $2,000 for the same local government services like road maintenance, schools, and trash collection. Supporters of Prop 19 point to the fact that it will make it easier for middle class families to move around within the state, while making taxpayer contributions more equitable.

(Video) What is Prop 19? Pros and Cons of Proposition 19

Is Prop 19 Retroactive?

The good news is that Prop 19 is not retroactive. If you are residing in an inherited home, you can rest easy knowing that any homes transferred on February 15, 2021 or before will not be impacted by Prop 19. It is only on transferred property moving forward that Prop 19 will add to the already extant list of concerns aroundestate taxes. In regards to the ability of certain classes of residents to transfer their tax basis, that is also not retroactive.

Examples of Prop 19 at Work

Let’s say a couple in their late 50s lives in a home with an assessed value of $200k and wants to move closer to their grandchildren. The home they’ve found to facilitate such a relocation are priced at $800k. According to the old tax regulations, this would mean shifting from an annual tax bill of $2k to an annual tax bill of $8k—a 400 percent increase. To put things in perspective, that amount of cash might equal six annual vacation or a remodeled bathroom—it’s a sizable difference! More importantly, it’s an additional $500 per month for a couple entering a period of their life when they want to be on a fixed income.

Now, with Prop 19 in effect, this couple can transfer the tax basis of their $200k home to their new $800k one. Adding to that benefit is the fact that if this couple wanted to move two more times, in-state, for whatever reason, they could continue to carry that original tax basis with them.

One of the ideas behind Prop 19 is that now, in the above example, the elderly couple would have a similar tax bill as a neighbor who had lived in the neighborhood for decades. Proponents say the bill makes taxes more equitable, but what about a new neighbor (who doesn’t meet the requirements of Prop 19) that moves into a nearby $800k home and now faces a tax bill of $8k? Questions like these may be addressed in future ballot measures.

While Prop 19 certain has its benefits for certain types of eligible California residents, it can have drawbacks for others.

Consider a family who moved into a suburban home just outside of Los Angeles in the 1950s. As of 1976, the assessed value of the property was listed at $50k. Under the old tax laws, the tax base of that property would be set at the then-current fair market value of $50k with a two percent increase in its assessed value every year.

If this family gave the home to their children on February 15, 2021, they would be looking at a piece of property worth $95k. If, however, they gave their home to their children on February 16, 2021, it would be a different story.

Median home prices at the time of this article in Los Angeles County are roughly $700k. To keep our example simple, let’s use a one percent property tax rate. Property inherited before Prop 19 took effect would have a $950 annual tax bill. Property inherited after Prop 19 would have a $7k tax bill—a whooping 736 percent increase.

While our example was specifically drawn from a home in Los Angeles, a similar story is likely to play out in other areas of California. Median home prices in Sacramento hover around $400k, and the current median home price in San Francisco is around $1.625 million. As you can imagine, Prop 19 can make inheriting property unaffordable for some residents unless they work with their benefactor to transfer the property through a legal vehicle, like anirrevocable trust.

(Video) California Prop 19 Pros vs Cons | Info On The Go Ep 58

How is Property Held in a Trust Affected by Proposition 19?

You might be wondering if aland trustcan be used for circumvent the trigger on a property value reassessment. As it turns out, the answer is yes and no.

Revocable trusts will not work to bypass the reassessment triggered by a transfer, but irrevocable trusts will. To keep an explanation of the differences brief, the terms of a revocable trust can be changed by the grantor, while an irrevocable trust requires permission from the beneficiary to make changes. Facilitating management of the asset in question is the trustee, who is often a lawyer familiar with California laws around land trust creation.

On the other hand, if you have assets (like property) that you want to keep in the family without suffering punitive estate taxes and transfer taxes, you should really be using a land trust anyway. Though Prop 19 may seem to create an unappealing situation in terms of bequeathing real property to your heirs, for some property owners, it might provide a much-needed impetus to create a better legal structure and tax strategy around the property they own.

Does Proposition 19 Apply to a Transfer of a Rental Home?

Yes, it does. Moreover, prior to Prop 19, up to $1 million could be excluded from the newly assessed value of a rental property. That benefit is now gone, and any property that is not the primary residence of the inheritor will be reassessed for an entirely new tax basis based on the current market value of the property.

As you can imagine, in some cases, this will result in a much steeper tax bill. Speaking to someone familiar withreal estate asset managementmight provide you with ways to get around this issue, such as creating a corporation that is legally separate from the family and its personal assets.

Consult with a Financial Expert to Create a California Prop 19 Strategy

Prop 19 is here to stay, even if it just barely passed in the polls. While it may seem to make inheritance more difficult for California residents, these individuals should really be exploring the benefit of a land trust anyway, in order to protect their assets.

At the same time, Prop 19 will create greater flexibility for older residents to move to a more desirable location within the Golden State, since they won’t need to be afraid of an increased tax bill. Residents who lost their home in a California wildfire or other natural disaster will also have the opportunity to continue living in their communities.

Lastly, although most any tax advisor or lawyer familiar with the ins and outs ofreal estate taxeswould be able to advise on the benefits of using a trust, those who don’t leverage this type of vehicle may provide the state with additional tax revenue that will hopefully be allocated towards disaster and wildfire response, a measure that will ultimately benefit all homeowners who choose to reside in California.

Bonus Video

(Video) PROP 19 California 2021 Pros and Cons TONY

FAQs

Is Prop 19 good for seniors? ›

On November 3, 2020, California voters approved Proposition 19, The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act. To assist taxpayers, the following tabs provide general information on Proposition 19.

What are the benefits of Prop 19? ›

Proposition 19 is constitutional amendment that limits people who inherit family properties from keeping the low property tax base unless they use the home as their primary residence, but it also allows homeowners who are over 55 years of age, disabled, or victims of a wildfire or natural disaster to transfer their ...

How can Prop 19 tax reassessment be avoided? ›

As long as you do not transfer more than 50% of the LLC interests, no reassessment is triggered. Once you reach the 50% threshold, you can then distribute the property to the LLC members proportionately (as long as it is done proportionately per the membership interests, there is no reassessment).

Is Prop 19 good for homeowners? ›

Prop. 19 allows homeowners to purchase a replacement home of greater value than their original home and transfer their tax base with an adjustment to account for the value difference in cases of homes destroyed by wildfires or other natural disasters. The effective date of implementation is April 1, 2021.

At what age do you stop paying property taxes in California? ›

PROPERTY TAX POSTPONEMENT PROGRAM

This program gives seniors (62 or older), blind, or disabled citizens the option of having the state pay all or part of the property taxes on their residence until the individual moves, sells the property, dies, or the title is passed to an ineligible person.

How will Prop 19 affect my inheritance? ›

Prop 19 requires that if the home is not used as a child's personal residence within one year, it is to be reassessed at market value when inherited.

Do seniors get a property tax break in California? ›

The State Controller's Property Tax Postponement Program allows homeowners who are seniors, are blind, or have a disability to defer current-year property taxes on their principal residence if they meet certain criteria, including at least 40 percent equity in the home and an annual household income of $49,017 or less ...

What happens to property taxes when you inherit a house in California? ›

There is no California inheritance tax. In short, the beneficiaries and heirs will be able to inherit the property free of taxes. They will not need to pay an income tax on the property, either, because property inherited from someone else is not considered ordinary income.

How does Prop 19 affect inherited property in a trust? ›

Prop 19 stipulates that properties transferred from parent to children will trigger a property tax reassessment. This is unless at least one of the children will use the property as a primary residence. Also if the property has not gained more than one million dollars in reassessed value from its original assessment.

What triggers Prop 19 reassessment? ›

The first situation is what Proposition 19 directly affects: transferring direct ownership of real property by lifetime or testamentary gift (inheritance), or a sale deemed a “change in ownership” that would trigger a property tax reassessment.

Does a Trust Protect Against Prop 19? ›

Unfortunately, a typical trust will NOT bypass Prop 19. Wills and trusts are essential to avoid probate in California, but they won't prevent the full reassessment required by Prop 19.

How can I avoid property reassessment in California? ›

ACTION TO CONSIDER: To avoid property tax reassessment, do not transfer real property from individuals to a legal entity unless the individuals have the same proportionate interest in the legal entity as they did in the real property.

How does Prop 19 affect property taxes? ›

When Prop 19 goes into effect, you can buy a more expensive home and utilize a blended property tax assessment. The tax base formula subtracts the value of the old home from the value of the new home, then adds the old tax base.

How does Prop 19 Change family property transfers? ›

Summary. Effective February 16, 2021 Proposition 19 limits property tax increases on family homes used as a primary residence by allowing parents to pass on their family home to their children for continued use as a primary residence.

How much are taxes on a house in California? ›

California's overall property taxes are below the national average. The average effective property tax rate in California is 0.73%, compared to the national rate, which sits at 1.07%.
...
Overview of California Taxes.
New York County$4,8131.925% of Assessed Home Value
National $2,7751.110% of Assessed Home Value
1 more row

Who is exempt from paying property taxes in California? ›

You may be eligible for property tax assistance if you are 62 years of age or older, blind or disabled, own and live in your own home, and meet certain household income limitations. For additional information regarding homeowner property tax assistance, contact the California Franchise Tax Board at 1-800-868-4171.

Do seniors pay school taxes in California? ›

California homeowners 65 and older should check their property tax bills and make sure they are getting any senior exemptions on school parcel taxes to which they are entitled. These exemptions could reduce their tax bills by hundreds of dollars, or more than $1,000 in some wealthier districts.

What is California senior exemption? ›

If you and/or your spouse are 65 years of age or older as of January 1, 2020, and claim the Senior Exemption Credit, you may make a combined total contribution of up to $244 or $122 per spouse/RDP.

Can I give my house to my son to avoid inheritance tax? ›

The most common way to transfer property to your children is through gifting it. This is usually done to ensure they will not have to pay inheritance tax when you die. Inheritance tax starts at 40%.

How much can you inherit without paying taxes in 2022 in California? ›

How much money can you inherit before you have to pay taxes on it in California? California does not have an estate tax or an inheritance tax. If an estate is worth more than $12.06 million dollars for single individuals and $24.12 million dollars for married couples in 2022.

How much can you inherit without paying taxes in California? ›

Your inheritance of $65,000 for income tax purposes is tax free. The trustee or executor will have paid the federal and California estate taxes, if any, as part of the administration process. It is not your responsibility.

Do seniors over 70 pay taxes? ›

There is no age when a senior gets to stop filing a tax return, and most seniors are required to file taxes. The taxpayer's taxable income determines whether a tax return is required. The rules for seniors are slightly different than those for people under the age of 65.

Does California tax Social Security? ›

Social security benefits are not taxable by the State of California. Social security benefits may be taxable by the federal government. Railroad sick pay is also not taxable by the State of California.

Can you transfer Prop 13 to a family member? ›

Under Prop 19, the only Prop 13 tax base that can be transferred to your children is that of your principal residence to your child—and then your child themselves must live on the property as their principal residence.

How much can you inherit from your parents without paying taxes? ›

There is no federal inheritance tax—that is, a tax on the sum of assets an individual receives from a deceased person. However, a federal estate tax applies to estates larger than $11.7 million for 2021 and $12.06 million for 2022. The tax is assessed only on the portion of an estate that exceeds those amounts.

Does a surviving spouse automatically inherit everything in California? ›

Distribution of Your Estate in California

If you die with a surviving spouse, but no children, parents or siblings, your spouse will inherit everything. If you have a spouse and children who survived you, the spouse will inherit all of your community property and a portion of your separate property.

Do I have to pay taxes on a house I inherited in California? ›

California is one of the 38 states that does not have an estate tax. However there are other taxes that may apply to your wealth and property after you die.

How does Prop 19 affect family farms? ›

Proposition 19 provides that if the fair market value of a family home or a family farm is less than the sum of the base year property tax value plus $1 million, the new base year value would not be adjusted.

How do you calculate Prop 19? ›

How Does Prop 19 Calculate Taxable Value When the Replacement Property is of Higher Value? According to the California Association of Realtors, “The new taxable value is calculated by adding the difference between the full cash value of the replacement property and the original property to the original taxable value.

What is a factored base year value? ›

The factored base year value (FBYV) of real property is the market value as of 1975 or as established when the property last changed ownership or was modified due to construction. This amount is then increased by no more than 2% each year (ie: factored) to determine the FBYV.

Does Prop 19 affect capital gains? ›

This new law has nothing to do with the capital gains tax basis, which is a matter of Federal income tax law, and is not affected in any way by this new legislation. It also does not affect non-California real property.

Do property tax increase when you inherit a house in California? ›

So, the good news is that if your inherited property is in California, you won't have to pay any state inheritance tax on house at all, and on top of that, the few states that apply inheritance tax for asset recipients are already dwindling down due to its increasing unpopularity.

When you buy a house are the taxes reassessed? ›

Property taxes are not affected by the sale of a home. Property assessments change when there are town-wide reassessments. This is when every property's worth is re-evaluated. Your house may go up in value, down in value, or just stay the same.

Can a trust be a joint tenant in California? ›

A trust can be a joint tenant under Civil Code section 683(a), which specifies that a joint tenancy may be created by grant or devise to trustees as joint tenants.

Does Prop 19 apply to commercial property? ›

Under the newly passed Proposition 19 in California, property taxes on commercial real estate will now be reassessed upon any transfer from parent to child.

Does Prop 13 apply to trusts? ›

Transferring title into or out of a Revocable Living Trust does not impact a property owner's Prop 13 tax base. Another common exception is transfers between spouses. A husband and a wife may transfer real property between themselves without having to worry about triggering a reassessment.

How do I stop reassessment? ›

To avoid reassessment, the two cotenants must have owned 100% of the property for one year prior to the death, the property must have been the principal residence for both for one year prior to death, and the survivor must keep 100%. The surviving tenant will need to sign an Affidavit of Cotenant Residency.

What happens if my parents gift me their house? ›

Your parents can give their home to you as a tax-free gift if the transaction meets the Internal Revenue Service definition of a gift. Your parents must legally own the property and intend to give it to you as a gift. They must relinquish all rights and ownership of the house and retitle the house in your name.

Does adding a pool increase property taxes in California? ›

In the long term, adding an in-ground pool to your Los Angeles home will almost certainly increase its value; the average value bump for the addition of a pool is $100,000, according to a 2019 report from Redfin. In the short term, however, it will also increase your property tax bill.

Does Prop 19 affect Prop 60 and 90? ›

Description. Important Notice: Effective April 1, 2021, Proposition 19 provisions potentially affect the former base year value transfers for persons age 55 and over that were added by Propositions 60 (1986) and 90 (1988).

How does Prop 60 work? ›

Proposition 60 is a constitutional amendment that allows the transfer of the base year value of your current primary residence to your newly acquired property of primary residence.

Does Prop 19 affect LLC? ›

Even under Proposition 19, there is no reassessment for a transfer of 50% or less of ownership in a real estate holding. For this reason, parents can transfer real property to their children without reassessment if the real property is owned by an LLC, partnership, or corporation.

How does Prop 90 work? ›

Prop. 90 allows transfers from one California County to another. Prop. 110 allows transfers for severely and permanently disabled property owners within the same county and from one California County to another.

How can I avoid property tax reassessment in California? ›

ACTION TO CONSIDER: To avoid property tax reassessment, do not transfer real property from individuals to a legal entity unless the individuals have the same proportionate interest in the legal entity as they did in the real property.

Do seniors pay tax on capital gains? ›

Current tax law does not allow you to take a capital gains tax break based on age. Once, the IRS allowed people over the age of 55 a tax exemption for home sales. However, this exclusion was closed in 1997 in favor of the expanded exemption for all homeowners.

Does California freeze property taxes for seniors? ›

You asked for a description of laws in California and Florida that freeze property taxes for homeowners who meet age and income eligibility requirements. Neither state has a property tax freeze program.

Are old age pensioners exempt from property tax? ›

While there is no specific exemption from the requirement to pay LPT for pensioners under the Finance (Local Property Tax) Act 2012 (as amended), such persons may be entitled to an exemption on other grounds or may qualify for a deferral subject to meeting the qualifying conditions.

Does California give any tax breaks for seniors? ›

California offers a senior income tax exemption in addition to its personal exemption. More specifically, seniors receive an extra benefit that allows them to double the standard exemption. For the 2021 tax year, California increased the personal exemptions for all filing statuses.

Who is exempt from paying property taxes in California? ›

You may be eligible for property tax assistance if you are 62 years of age or older, blind or disabled, own and live in your own home, and meet certain household income limitations. For additional information regarding homeowner property tax assistance, contact the California Franchise Tax Board at 1-800-868-4171.

Can you avoid Prop 19 with a trust? ›

There is a way around Prop 19 by using an irrevocable trust for the benefit of your children. Used as a vehicle to transfer property before February 16, 2021 to preserve the low property tax basis. A trust could be a viable option for you.

Does a Trust Protect Against Prop 19? ›

Unfortunately, a typical trust will NOT bypass Prop 19. Wills and trusts are essential to avoid probate in California, but they won't prevent the full reassessment required by Prop 19.

How much can you inherit without paying taxes in 2022 in California? ›

How much money can you inherit before you have to pay taxes on it in California? California does not have an estate tax or an inheritance tax. If an estate is worth more than $12.06 million dollars for single individuals and $24.12 million dollars for married couples in 2022.

How much can you inherit without paying taxes in California? ›

Your inheritance of $65,000 for income tax purposes is tax free. The trustee or executor will have paid the federal and California estate taxes, if any, as part of the administration process. It is not your responsibility.

Does Prop 19 only apply to primary residence? ›

Answer: In order to transfer a base year value under Proposition 19, both the original primary residence and the replacement primary residence must be located in California. Thus, a base year value cannot be transferred from an original primary residence located in Georgia. 15.

Can I transfer my property tax rate in California? ›

California homeowners 55 and older can get a one-time opportunity to sell their primary residence and transfer the property tax assessment to a new home under Proposition 60. The caveat here is the market value of the new house generally must be lower or equal to the home being sold.

Videos

1. The BEST Prop 19 Explanation Video (2021)
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2. How California prop 19 may affect your property taxes - Proposition 19 - Prop 19 California 2020
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4. Pros and Cons of Prop 19
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6. Prop 19 Pros and Cons - New Rules Affecting Property Taxes and Inheritance [California 2021]
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