Effective February 16, 2021, Proposition 19 went into effect and made sweeping changes to property tax reassessments. Here are the current property tax exemptions available in California:

1. Homeowners’ Exemption

The California Constitution provides for the exemption of $7,000 in assessed value from property tax assessment of any property owned and occupied as the owner’s principal place of residence. This results in annual property tax savings of approximately $70-$80.

2. Parent-Child/Grandparent-Grandchild (Prop. 19)

Effective February 16, 2021, Proposition 19 was enacted, which is a Constitutional Amendment that imposes new limits on property tax for inherited family property. Under Proposition 19, a child or children may keep the lower property tax base of the parent(s) (grandparent(s)) ONLY if the property is the principal residence of the parent(s) and becomes the principal residence of the child or children within one year. This exclusion also applies between grandparent(s) and grandchild or grandchildren. A full exclusion is allowed for principal residence reassessment if the fair market value is less than the sum of the current assessed value plus $1,000,000. A partial reassessment exclusion is allowed for principal residence if the fair market value is more than the sum of the current assessed value plus $1,000,000. The example below illustrates a partial reassessment.

3. Transfer of Assessment to Replacement Property (55 and Older and Disabled) and for Transfers Due to Wildfire or Natural Disaster

Proposition 19, effective April 1, 2021, modified previous Propositions and now allows eligible homeowners to transfer the taxable value of their existing primary residence to a new replacement primary residence. The replacement residence can be of any value, subject to conditions, and anywhere within the state. The exclusion can be filed up to three times by a property owner during their lifetime, however for wildfire or natural disasters the exclusion can be used more than once.

The original taxable assessed value without any adjustment will transfer to the new residence if the fair market value of the replacement principal residence does not exceed the fair market value of the original principal residence. However, if the fair market value of the replacement principal residence does exceed the fair market value of the original principal residence the difference between the two market values will be added to the taxable assessed value. The example below illustrates this reassessment:

All exemption forms can be obtained online through your local county assessor’s website. Before transferring property, please contact our office for consultation or assistance in completing these forms to avoid unexpected property tax reassessments.

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Our estate planning team assists with the transition of family wealth and estate succession. Our team of experts has over 90 years of combined experience working with family-owned and privately held companies, as well as high-net-worth individuals. Our primary goal is to assist individuals and their attorneys to effectively transfer wealth while minimizing unnecessary estate, gift, and generation-skipping taxes. In addition, we can coordinate all of your Trust, probate, and estate planning needs to ensure a smooth transition while minimizing emotional, tax, and administrative burdens.

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About the Experts

Richard UmanoffRichard Umanoff, CPA, MBA, Principal
Tax, Estate & Gift, Trust and Probate
Richard Umanoff is an Estate & Gift, Trust and Probate Principal at KROST. Richard’s career spans over 45 years, with a concentration in taxation. His primary emphasis is estate and trust tax compliance, planning, estate administration, and probate court accounting. Richard currently serves in the role of trustee for numerous clients. » Full Bio

Douglas VenturelliDouglas A. Venturelli, Esq., Principal
TaxEstate & Gift, Trust and Probate, Sports & Entertainment
Douglas A. Venturelli is an Estate & Gift, Trust and Probate Principal at KROST. He has over 45 years of experience in tax, estate, and business services. His main focus is federal estate and gift taxes. Doug consults with clients in the entertainment, legal, real estate, and medical industries. » Full Bio

So Sum Lee, CPA, PrincipalSo Sum Lee
Tax, Real Estate, Hospitality, Estate & Gift, Trust and Probate
So Sum Lee is a Tax Principal at KROST. So Sum has over 25 years of experience in public accounting and has a wide range of experience in Taxation, as well as servicing high-net-worth clients. So Sum’s area of expertise includes industries such as wholesale, real estate investments, and restaurants. » Full Bio

Kimberly Hoang, CPA, Senior Manager
Tax, Estate & Trust, Gift and Probate
Kimberly Hoang is a Senior Manager in the tax department at KROST. She has been in the public accounting profession for over four years. Her areas of focus include tax planning and compliance for small to medium-sized businesses – sole proprietorships, partnerships, corporations, and high-net-worth individuals. » Full Bio