Proposition 13: Not what it used to be.
On June 6, 1978, California voters overwhelmingly approved Proposition 13. Proposition 13 protected homeowners from ever-increasing property taxes. In 1986 Proposition 58 made it possible to transfer your property tax basis to children. Prop 58 allowed children to acquire their parents' home (and other real property) without having the property taxes jump up significantly.
Many families have been able to keep a home in the family after death because of Prop 13. Many families have been able to keep their businesses running profitable because of Prop 13.
Prop 19 changes the rules. Under California’s new Prop 19, California's will no longer be able to transfer all of their property to their children without affecting the Property tax. The deadline is February 15, 2021. Then Prop 13 benefits will be lost.
March and Homer Simpson purchase their property in 1989 for $100,000, with property taxes of $1,000 per year that slowly increased to $1800 per year in 2020. In March of 2021, Marge and Homer both pass away, and the home is now worth $650,000. When Lisa, Bart, and Maggie inherit it the property taxes will jump to $6500 per year. Unless they continue to live in the property, Lisa, Bart, and Maggie will end up paying 1% of the new accessed value.
What can you do? Right now, you have the opportunity to take advantage of the current law before the February deadline. There are options, and the right answer for your family depends on several factors, tax basis, family dynamics, long term property goals. Schedule a phone or Zoom meeting right away with Attorney Marty Burbank, JD, LLM at OC Elder Law to determine the best option for your family.
Remember, we only have until February 15. Our calendar is already filling up to help families keep their valuable Proposition 13 benefits.
You can schedule your appointment now by following this link or by calling 800-220-4205 and asking for an appointment to save your Prop 13 benefits.