Proposition 19 Boomerang On The Backside of the Head?
Or is it to be litigated to grinding halt?
The Advertisements sold us on helping those families
from Paradise displaced by wildfires.
Remember Kristy, “Our homes were burned to the ground.
We couldn’t move because of taxes… vote yes.”
And the ads from The California Association of Realtors
backed the bill because, ‘geeze it will open up all those listings…
the market will become open again,
and a chicken in every pot for every
Realtor…
However now numerous county Assessors and
Tax Collectors are stumped at the loopholes
and work left for them to litigate.
Prop 19 builds more tax revenue for California.
It does not protect homeowners.
The previous law allowed parents (and some grandparents)
to transfer their primary residence, of any value,
to their children and the assessed value for
tax purposes would remain unchanged.
Wealth could be passed to your heirs in the form
of your primary residence and one investment property
with the investment property not to exceed a million dollars.
Children or grandchildren were not required to
live in the property to keep the basis.
Under Proposition 19 homeowners who are over age 55,
disabled, or victims of natural disasters
may transfer their property tax base
(current assessed value) when they sell their home
and purchase a new one anywhere within the state.
They can also transfer that tax base to a home of greater value.
Under the old law (Prop’s 60/90),
homeowners could transfer their property tax rate
to a home of equal or lesser value in certain counties.
Only twelve of the fifty eight counties in California in the past
“cooperated” in transfers (mostly the richer higher cost counties).
The new law allows homeowners to transfer their property tax
assessment up to three times, where previous law allowed them to
transfer it once. Prop. 19 goes into effect on April 1st, 2021,
just weeks from today.
The piece that is still unclear is how family transfers
and inheritance will be handled.
The real estate is required to be the primary residence of the parent,
and the child inheriting the property must move into the home as their
primary residence within one year of the transfer in order to avoid a
reassessment.
Who is going to check and verify owner occupancy?
Counties with reduced revenues don’t have investigators who can door
knock to check.
They can only check where the bill is mailed (often to the lender for
impounds).
Parts of the Bill are under repeal, and the courts
will decide all the ins and outs which were
left open to interpretation.
The suits
win.
