A California parent passes away and leaves their primary residence to their adult child through inheritance. Under Proposition 19 (effective February 16, 2021), how does this transfer affect the property tax assessment?
Correct Answer
D) The child may retain the parent's assessed value only if the child occupies the property as their primary residence, and only up to $1 million of market value above the parent's existing assessed value — any excess is added to the assessed value
Under Proposition 19 (amending California Constitution Article XIIIA, §2.1), effective February 16, 2021, a parent-to-child transfer of a primary residence qualifies for a limited reassessment exclusion only if the child establishes the home as their primary residence. Even then, the exclusion is capped: if the property's current market value exceeds the parent's factored base year value by more than $1 million, the assessed value is increased by the amount of that excess. For example, if the parent's assessed value is $400,000 and the market value is $1.6 million, the $200,000 excess above the $1 million threshold is added, resulting in a new assessed value of $600,000.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Fair housing laws apply to a broad range of activities related to housing, including sale, rental, financing, and advertising.
A seller's disclosure statement is a form that sellers complete to inform buyers about the condition and history of the property, including known defects, past repairs, insurance claims, and environmental issues.
Many states and localities have fair housing laws that expand upon the protections offered by the federal Fair Housing Act.
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- → A property in a California Mello-Roos district has a base Proposition 13 property tax of 1% on its assessed value of $600,000, plus a Mello-Roos special tax of $3,200 per year. What is the total annual property tax bill for this property?
- → A California buyer's agent conducts a visual inspection of a property and observes extensive, recently applied caulking around all window frames and along the base of the exterior walls. What is the buyer's agent's most appropriate next step?
- → A California buyer's agent conducts a visual inspection and notices that the property's water heater is not strapped to the wall as required by California law for seismic safety. Under California Health and Safety Code §19211, water heaters must be braced. What should the buyer's agent do?
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