What does the passage of Proposition 19 mean for the general housing market in California, one of the nation’s most expensive states to live in? Although the state will run into an increase in revenue due to a property tax hike, some residents who reside in inherited properties might discover that living in California is becoming more and more difficult and unaffordable.
Nick Solis, a well known real estate professional, and president of One80 Reality said recently in an interview, “California is a state where blue collar working class folks generally pass down their home to their children or other family members.”
Of course this is where trust lenders, for example like Commercial Loan Corp, are going to get busier, helping beneficiaries to get approved for Proposition 58 and California Proposition 19. Naturally, Prop 58, Prop 19 & a trust loan lets us buyout siblings, or co-beneficiaries. Trust lenders are going to become more popular as this type of transaction becomes even more in demand than it already is now. Siblings who are looking to sell out, and often leave the state, will actually walk off with more money from a trust loan than they would if they sold out to a third party that is not a family member.
Mr. Solis explained, “Not everyone who inherits a home form their parents is wealthy. Many blue collar workers and working class families bought property in previous decades when homes were affordable, and are passing them down to their kids…”
It took a quasi civil war to get property taxes to this point. The overzealous, fanatical opponents of property tax relief in California never gave up, despite 42 years of trying and failing to remove property tax relief from the California tax system. They gritted their teeth and attempted to push through proposition after tax measure after tax bill to accomplish that. For 42 years, Proposition 13, which successfully limited property tax increases, helping beneficiaries, homeowners and commercial property owners avoid property tax reassessment. Hence, Prop 13 remained untouchable. A political third rail.
Proposition 13 weathered and rebuffed numerous legislative and legal attacks… Even including one at the Supreme Court. And nothing stuck. Prop 13, and subsequently the 1986 Amendment, Prop 58 & a trust loan lets us buyout siblings, with it’s sacrosanct Parent–to-Child Exclusion (or Parent-to-Child Exemption), this all seemed to be more or less indestructible.
As far as Proposition 19 is concerned, the forces behind it steered clear of disabling the right to transfer parents property taxes or inheriting property taxes from parents with the ability to keep parents property taxes. Beneficiaries still had confidence in the fact that Prop 58 & a trust loan lets us buyout siblings and lock in a low Proposition 13 tax base. Property tax transfer, parent to child transfer, parent to child exclusion and the transfer of property between siblings all remained safe…
>> Click Here to Continue to Part Two…