Keeping A Parents Low Property Tax Base on An Inherited Home

Property Taxes

Property Taxes

Property Taxes in California Are Subject to Change

We all know that nothing stays the same in life.  We know that everything, ever single advantage, and every fortunate upper hand or financial improvement given to us in life eventually changes. 

Naturally, we hope for the better… although it doesn’t always turn out that way. When it comes to taxes, lucky breaks, in a fluid state like California, coming from tax breaks or property tax relief laws… may come around once in awhile – but it doesn’t always stay the same.

For example, what was once the wildly popular parent-to-child property tax break in California called CA Proposition 58 – has now morphed into a property tax relief measure, with some nice advantages for a wider selection of people to avoid property tax reassessment, such as those over age 55, the elderly, folks who are disabled, and homeowners whose home has been damaged or even destroyed by a natural disaster – known to us as “Proposition 19”… active as of Feb 16, 2021.

Experts and Solutions That Can Help

Fortunately, there are professionals around, such as trust lenders, attorneys that specialize in trusts and taxes, specialized CPAs,  and property tax consultants… that can help homeowners like this, as well as beneficiaries inheriting property from parents, all who need help avoiding mistakes or missteps may trigger property tax assessment – which can be financially crippling for middle class and even upper middle class families.

One category of solution providers worth mentioning are property tax specialists that help buyout inherited property from sibling beneficiaries, frequently through an irrevocable trust loan – allowing beneficiaries to retain sole ownership of inherited property that would now cost ten times what it cost 2, 3 or 4 generations ago – plus cutting costs by avoiding property tax reassessment at current, or “fair market” rates.

These property tax experts can show beneficiaries how to keep parents’ property taxes on a property tax transfer; How to take advantage of a parent-child transfer or parent-to-child exclusion (from current tax rates). This helps families inheriting a home to transfer parents’ property taxes along with the home they are receiving… So they also end up inheriting property taxes, not just a home with four walls, a ceiling, maybe a pool, and some furniture.

Guidance From Property Tax Relief Specialists

Some California firms with property tax relief expertise have been encouraged to get creative, to meet new property tax challenges and obstacles with some effective new ideas and solutions. Firms that specialize in base year value transfers and parent-child transfers.

Experts like Commercial Loan Corp in Newport Beach specialize  in irrevocable trust loans, and teaches residents how to save on property taxes and how to locate new access for homeowners to CA State Board of Equalization & Property Taxpayers’ Bill of Rights,  among many other helpful, often critical, tax saving devices and avenues to key information.

This type of trust lender now offers beneficiaries inheriting a home from parents the ability to keep their parents’ low Proposition 13 property tax base; while also taking advantage of Proposition 19 inherited property transfer tax breaks, lowering or pausing CA property taxes… for example transferring your mom’s low property tax base via Prop 19

A Trust Loan / Prop 19 Funding Expert Weighs In

One of only a handful of experts in California, in this area, is irrevocable trust loan and Proposition 19 specialist Tanis Kluever – Senior Proposition 19 Property Tax Specialist at Commercial Loan Corporation (877) 464-1066, who shares her views on these matters…

Tanis tells us: Many older homes being inherited by beneficiaries in these scenarios are not carrying any debt. Which is fortunate. So let’s say in many of these middle class or even upper middle class families there is a house, maybe some land, and possibly a few valuables…

Here is a typical middle class inherited real estate scenario – let’s say, for example, there are three beneficiaries and no other assets being inherited except an older home. One beneficiary wants to keep the house, to keep parents property taxes; while the other two siblings prefer to get cash from an immediate house sale, probably through a nearby realtor. But – instead of selling to a buyer, here is where Proposition 19 and a trust loan comes into play, providing liquidity and compliance with the Proposition 19 tax system – furnishing the two siblings who prefer to sell, with enough cash liquidity as if they had sold their shares in the inherited property to a buyer…

With a loan to a trust there is the upside of less expense. Frequently, we’re talking about ten times less of an expense than would normally be involved in a house sale. Again, a process compensating beneficiaries through a trust loan, instead of a house sale or coming up with the cash yourself… versus a formal house sale through a realtor that would cost approximately ten times the amount to process the entire scenario, a house sale, with realtor commission and fees, taxes, ancillary costs, etc

And no one could express it better.