The Need to Transfer Parents CA Property Taxes, Saving Money & Pausing Property Taxes Until a Normal Economy Returns
Whenever America experiences an economic crisis people look for alternative solutions, and often reach “outside the box” for answers. Some activities outside the box that have been suggested for working families, that supposedly will help families spend less and save more, are an in-home project called “homesteading”, which is apparently affording some middle class California families a little relief in the midst of a challenging pandemic. State leaders are concerned, and are trying to achieve positive results with unconventional efforts.
“Homesteading” has some California residents relying on creative ways to spend less and save more… reuse and get every little bit of use from all household goods. For instance, maximizing scraps of vegetables into family size batches of vegetable soup. “Making more with less” is the message from some state leaders.
This sort of activity may help some middle class working families, but what is really required right now – as we deal with a pandemic impacted economy and unstable real estate environment, with many people concerned about the possibly of foreclosure – is lower cost of living, since increased revenue is still difficult in many quarters.
Approximately 30% of the companies impacted by shutdowns across the country are still inactive. With many employees still working at reduced compensation, from home, although thankfully many have returned to work under normal conditions. The website https://www.edd.ca.gov tells us that the number of Californians employed in April of 2021 was 17,378,100, an increase of 36,800 jobs from March’s total of 17,341,300 and up 1,753,700 employed workers in April of 2020. The number of unemployed Californians as of April 2021 was 1,576,100.
The state is working its’ way back up from the severe pandemic unemployment crisis that began a year ago. However, still severe enough to merit additional cuts in taxes, most notably property taxes as this would be the least problematic tax to pause until Covid has been completely stamped out, with everyone back at work in normal numbers and in normal fashion.
Minimizing or actually pausing or curtailing certain taxes is something the state government can actually continheriting-ca-property-the-proposition-19-parent-child-exclusion-irol, and implement without dramatically upsetting the economy. Therefore, the California government would do much better to minimize property taxes, for example, or put them off completely until the pandemic lifts and normalcy has returned to the work place; rather than proposing ineffective tax deferments, as they have done, that have to be paid within a few months anyway.
Property taxes are an example of taxation that the government can control, and survive without, for a year or two. Intentionally pausing residential and commercial property taxes for California property owners would most likely not offset the state government in any material way, and would help many homeowners in a major way.
However, if actually pausing property taxes is not a realistic hope as the pandemic lingers… then we can at least look to California leaders to better communicate property tax relief tools and solutions to the public. Californians still have an intact Proposition 13 to look to, and robust Proposition 19 property tax breaks to utilize, especially for those over 55 – as well as allowing new homeowners, and beneficiaries inheriting property, to be able to take advantage of parent-to-child transfer rights; to make use of a loan to an irrevocable trust, inheriting property while keeping a low property tax base; to transfer parents CA property taxes upon inheriting property taxes and keep parents property taxes as an outcome of a property tax transfer from dad or mom. And, naturally, the parent-to-child exclusion from reassessment at “fair-market”, or current, property tax rates.
State leaders must understand that California residents who are unaware of the power of property tax breaks like the ability to transfer parents CA property taxes should be made more aware of property tax savings obtained from Proposition 13 and Proposition 19 – through press releases, new media, YouTube, high-profile news sites, relevant real estate and personal finance websites, and blogs. For example like CA Assemblyman Kevin Kiley is doing, sponsoring urgent “Amendment 9” to protect property tax relief for working families in all 58 counties.
It is important that beneficiaries inheriting property from parents should also be made aware of trust lenders, and how irrevocable trust loans work with Proposition 19 to lock in a low Proposition 13 property tax base plus help to buyout siblings’ inherited property shares, with a sibling-to-sibling property transfer.
When the pandemic lifts and the real estate market levels off along with the overall middle class and upper middle class job-based economy (the real economy, not the stock market), we shall see where we are. However, for now this is perhaps the only way, along with other similar measures, to put more spending cash in Californians’ pockets, and slowly get the California economy back on track for middle class and upper middle class property owners, beneficiaries inheriting property from parents, and working families.