By Gina Gaudio-Grace, Platinum Trust Group
In November 2020, Californian voters passed Proposition 19, a State Constitutional Amendment, with 51.1% of the voters approving it. The new law goes into effect on February 16, 2021. This means that you have a short window of time to act under the existing law.
The Way We Were: How It Works Today
To understand the impact Proposition 19 will have on apartment owners, it is helpful to recognize that it modifies Proposition 13 (originally passed in 1978). Under Proposition 13, parents are permitted to transfer: (i) their primary residence, and (ii) up to $1 million in assessed value of other properties, to their children without triggering a reassessment for property tax purposes. This means that children can keep the low property tax assessment from their parents following a transfer of a primary residence or the first one million dollars of assessed value (which is usually substantially less than fair market value) of investment properties.