California Proposition 19 allows transfers of a family home or family farm between parents and their children without causing a change in ownership for property tax purposes. It is an exclusion from change in ownership. Allows transferee to retain the
taxable value of the transferor. “Taxable value” means the base year value plus inflationary adjustments, commonly referred to as the factored base year value.
Proposition 19 applies to a purchase or transfer of a family home between parents and their children if the property continues as the family home of the transferee. The transferee must live in the home as their primary residence within one year of transfer and file for the homeowners’ or disabled veterans’ exemption within one year of transfer to qualify for the exclusion.
• For a family farm, defined as real property under cultivation or which is being used for pasture or grazing or that is used to produce any agricultural commodity as used in Government Code section 51201, there is no requirement that the family farm contain a home that the transferee lives in to qualify.
• There is a limit to the value that can be excluded for a family home or each legal parcel of a family farm. The value limit is equal to the property’s taxable value (factored base year value) at time of transfer plus $1 million. If the market value exceeds this limit, the difference is added to the taxable value. (Note: The $1 million allowance will be adjusted annually by the State Board of Equalization (BOE) beginning in 2023.)
Additional information on the Proposition 19 Intergenerational Transfer can be found here on the California BOE Website
On February 16th, 2023 the California Board of Equalization increased the transfer exclusion benefit from $1,000,000 to $1,022,600. As a policy, every 2 years the Board of Equalization reviews the Proposition 19 benefit and will adjust it based on the Federal Housing Finance Agency house price index numbers. The goal of these modifications is to keep California Proposition 19 effective over time as the values of a home change. The next adjustment to the Proposition 19 parent to child transfer benefit and home property tax transfer benefit is scheduled to occur on February 16, 2025.
The following is the documentation from the California Board of Equalization on the increase to the Proposition 19 Benefit:
California Proposition 19 Benefit Increase for February 16th 2023
If you, a family member or client requires assistance with obtaining a California Proposition 19 Parent to Child Transfer benefit, please call us at (877) 464-1066.