HJTA has tried twice to collect enough signatures to place the repeal of the intergenerational transfer provisions of Proposition 19 on the ballot. As you know, Proposition 19 repealed earlier initiatives (Propositions 58 and 193) that had, for more than thirty years, protected family property from reassessment to market value when passed between parents and children.
Proposition 19 changed the state constitution to eliminate this protection, and now all real property is reassessed to market value upon transfer between parents and children, with an exception for a parent’s primary residence that becomes the primary residence of an eligible child within one year. That narrow exclusion from reassessment is capped at an additional $1 million of market value above the current taxable value. With California’s sky-high property values, even inheritors who move into the property, as Prop. 19 requires in order to claim the exclusion from full reassessment, could face an unaffordable increase in annual property taxes.
To undo these provisions in Proposition 19, the state constitution must be amended. That means collecting more than a million signatures of registered voters on an initiative petition, or convincing the Legislature to pass a legislative constitutional amendment by a two-thirds vote in both the Assembly and the Senate. Either method would place the measure on the ballot for voter approval.
HJTA is continuously evaluating the possibilities for repealing the “death tax” provisions of Proposition 19. We believe that public support for this effort is growing year-by-year as more Californians sadly become familiar with the change to the tax treatment of inherited property.
In the meantime, HJTA has worked with Sen. Kelly Seyarto, R-Murrieta, on several bills that target some specific problems caused by Proposition 19:
PASSED AND SIGNED INTO LAW: Senate Bill 520 (2023) – This law clarified that a homeowner who moves into a care facility does not lose the Homeowners’ Exemption. If the homeowner passes away while living in a nursing home or other residential care facility, that individual’s children are eligible for the Proposition 19 exclusion from reassessment just as if the homeowner had continuously occupied the home as a principal residence.
PASSED THE SENATE, PENDING IN THE ASSEMBLY: SB 974 – Clarifies that Special Needs Trusts are recognized as meeting the eligibility requirements for the Proposition 19 exclusion. This means children or adults with special needs would not face reassessment of the inherited home in which they are living when their parents pass away, even though their parents did not live in the home as their principal residence.
PASSED THE SENATE, PENDING IN THE ASSEMBLY: SB 288 – Provides that for the purposes of the Proposition 19 intergenerational transfer, the one-year period for moving into an inherited home doesn’t begin until the probate process concludes, if the estate is in probate.
In addition to Senator Seyarto’s bills, HJTA is supporting Assembly Constitutional Amendment 4, introduced by Senator Bob Archuleta, D-Norwalk. ACA 4 would allow eligible veterans to claim the Homeowners’ Exemption without having to give up the Veterans’ Exemption or Disabled Veterans’ Exemption. Currently, only one exemption may be claimed, forcing veterans to choose between their present financial needs and their children’s eligibility for the Proposition 19 exclusion from reassessment. The Homeowners’ Exemption, a simple form filed with the county assessor’s office, establishes that the property is the principal residence of the parent and eligible for the Proposition 19 exclusion from reassessment.
HJTA will continue to monitor the progress of these bills, and we will continue to look for opportunities to fully reverse the damaging provisions of Proposition 19.
If you would like to contact your representatives in the state Legislature to let them know you are concerned about this issue, you can find their names and contact information at findyourrep.legislature.ca.gov. It’s an election year, and it’s a good time to reach out to the people who are seeking your vote.