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We May All Be Crying the Proposition 19 Blues!
Iby Gina Guadio-Grace and Bruce Mack, Platinum Trust Group
n November 2020, Californians voted to pass properties. These same rules also applied the Proposition 19 Constitutional Amendment, to a grandparent’s transfer of real property to a with a small margin of 51.1% of the voters grandchild, provided the grandchild’s parents are approving it. The new law went into effect on deceased.
February 16, 2021.
To understand the impact of Proposition 19 on apartment owners, it is helpful to recognize that it modifies Proposition 13 (which was originally passed in 1978),
Under Proposition 13, parents are able 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 of property taxes. In other words, prior to passage of Proposition 19, children could maintain the low assessments and property taxes their parents are able to enjoy in the event of a transfer of a primary residence or the first one million dollars of assessed value (which is usually substantially less than the current fair market value) of investment
Under Proposition 13, individuals over the age of 55 and those who are severely disabled had been allowed to sell a primary residence and purchase a property of equal or lesser value and receive the same low property tax rates they originally had, provided the new property is in the same county as the original property. However, Proposition 19 has changed these rules in several ways, including:
• The exemption from reassessment for up to $1,000,000 in assessed value of property other than a primary residence transferred from parent to child or grandparent to grandchild has been eliminated completely.
• While parents can still transfer their primary
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Gina Gaudio-Grace, PhD, JD is a retired attorney and a graduate of Notre Dame Law School. She is a former Lead Note Editor of the Notre Dame Law Review, and she holds a PhD in Entrepreneurship and Business Strategy. Gina is also the Operations Manager and Business Development Director of Platinum Trust Group. Bruce Mack, Licensed Financial Advisor and Co-Founder, Gina and their team of Trust Advisors and Tax Professionals are available to consult with you to determine if this proprietary Trust is a fit for your needs.
74 JUNE 2021 - APARTMENT MANAGEMENT MAGAZINE AMM1/6