New CA Property Tax Relief Transferring Low Property Tax Values

Transferring A Parents Property Tax Value In California

Transferring A Parents Property Tax Value In California

2022 Tax Relief: Inherited Properties & Replacement Homes

The 2021 CA constitutional amendment, Proposition 19, otherwise known as the “Home Protection for Seniors, Severely Disabled, Families and Victims of Wildfire or Natural Disasters Act”, expands a surprising number of tax breaks (with respect to “replacement residence” tax relief benefits) mainly for homeowners over age 55 or suffering from a severe disability… making it possible to transfer a low property tax base from an original home to a new residence, or “replacement home”.

Californians also able to take advantage of expanded property tax breaks are homeowners with a damaged or completely destroyed home, caused by a natural disaster such as a flood, earthquake, or wildfire, can now move to a replacement residence, up to three time – in any of California’s 58 counties, expanded from previous limits of only ten counties allowing the transfer of a low property tax base to a new residence. This is actually quite ironic, as senior and elderly Americans, and folks with disabilities, generally find themselves either ignored or on the short end of the stick, so to speak. So this represents a societal shift, for the better.

However, it is important to point out that Proposition 19 also imposes new limits on property tax benefits for inherited family property, limiting uses of the popular 1986 Proposition 58 “parent-to-child exclusion” from reassessed (i.e., increased) property taxes; limiting parent-to-child transfers of property by narrowing usage in various ways.

This necessitates primary or principal residence (as opposed to owning and renting out investment properties) for both parents and beneficiaries, along with some other, minor, limitations.  On the other hand, beneficiaries do have a full year to move into an inherited primary home, only requiring a minimum of one heir to move in.

Buying Out Siblings & Keeping a Low Property Tax Base

Moreover, beneficiaries still have the ability to keep their parents’ family home, with their parents’ low property tax base, while taking advantage of Prop 19’s parent-to-child exclusion;  always staying focused on inheriting property taxes from parents during a typical  property tax transfer. Avoiding property tax reassessment being a top priority at all times.  For many beneficiaries getting a loan to a trust is critical, generally to buyout problematic co-beneficiaries insisting on selling their inherited property shares.

This typically involves a 6-figure or 7-figure loan to an irrevocable trust from a trust & estate lender, for example like industry leader Commercial Loan Corp, working in conjunction with Proposition 19 – supplying beneficiaries who are selling their inherited property shares with more money than a conventional buyer is likely to offer.

Avoiding a realtor, bypassing their standard 6% commission, and side-stepping the usual legal fees and transaction charges, leaves a good deal more cash, from a trust loan, to equalize beneficiaries selling their share of inherited property.  Basically, a win-win transaction all the way around.

Property Tax Relief Forms

  1. BOE-19-B, Claim for Transfer of Base Year Value to Replacement Primary Residence for Persons at Least Age 55 Years[External PDF]
  2. BOE-19-C, Certification of Value by Assessor for Base Year Value Transfer[External PDF]
  3. BOE-19-D, Claim for Transfer of Base Year Value to Replacement Primary Residence for Severely Disabled Persons[External PDF]
  4. BOE-19-DC, Certificate of Disability[External PDF]
  5. BOE-19-V, Claim for Transfer of Base Year Value to Replacement Primary Residence for Victims of Wildfire or Other Natural Disaster[External PDF]
  6. BOE-60-NR, Notice of Rescission of Claim to Transfer Base Year Value to Replacement Dwelling Under Revenue and Taxation Code Section 69.5 (Propositions 60/90/110)[External PDF]
  7. BOE-502-A Preliminary Change in Ownership Report[External PDF]
  8. BOE-502-AH Change in Ownership Statement[External PDF]
  9. BOE-502-D Change in Ownership Statement Death of Real Property Owner[External PDF]

Base Year Value Transfers for Homeowners 55+ or Disabled

Proposition 60/90 and 110 allowed persons over 55 or severely and permanently disabled persons to transfer the taxable value of their existing home to their new replacement home, so long as the market value of the new home is equal to or less than the existing home’s value and located in one of ten tax relief portability approved counties in California.

That left 48 counties not participating with tax breaks allowing the transfer of a low property tax base from an original home to a new replacement residence. When dealing with damage from a natural disaster like the wildfires California has been contending with lately… Or simply because you’re over the age of 55,  or suffering from a serious physical disability.

Of course the good news is that Proposition 19 now allows eligible homeowners to transfer the taxable value of their existing home to their new replace, and wish to move to a replacement home, or to new residence – of any value, anywhere within the state, up to three times (rather than once, with limited county choices and limited assessed dollar values – as it used to be until 2021).

Age 55+ and Disability Tax Relief Forms

  1. Claim for Transfer of Base Year Value to Replacement Primary Residence for Persons at Least Age 55 Years: BOE 19-D[External PDF]
  2. Claim for Transfer of Base Year Value to Replacement Primary Residence for Severely Disabled Persons: BOE 19V[External PDF]
  3. Certificate of Disability: BOE 19DC[External PDF]

Disaster Relief

Proposition 50 stipulated that a base year value of a home or property that is legitimately destroyed, or damaged beyond the point of residing there, by a disaster or wildfire verified as legitimate by the Governor may be transferred to comparable property within the same county.

Proposition 171 stated that the transfer of the base year value of a principal residence to one of 10 counties that has adopted these tax breaks. However, Proposition 19 now permits homeowners to move to a “replacement home” of higher assessed value than a previous primary residence – and transfer the lower tax base with an adjustment for the value difference when a home is damaged or destroyed by a wildfire or some other natural disaster.

Proposition 19 is covered at California State Board of Equalization  
Natural Disaster and Replacement Residence Form



Changes to California Property Tax Relief in 2021

Changes to California Property Tax Relief in 2021

Changes to California Property Tax Relief in 2021

The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act (AKA: Prop 19)

For homeowners in California , it’s important to have a good general understanding of how property tax relief is changing. Fortunately, Californians finally do have a clearer understanding of what property tax measure Proposition 19, passed into law on Nov 3, 2020 by voters in the state of California, is really all about, as well as how Proposition 58 has changed, in terms of property tax reassessment.

A lot of property owners in California aren’t aware of the fact that Proposition 19 was also entitled, “The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act” – A peculiar, overly wordy title; indicating that seniors, severely disabled people and victims of wildfires or natural disasters will be able to transfer the taxable value of their “original residence” to a “replacement residence” up to three times during their lifetime – anywhere throughout all 58 counties within the state of California.

California State Board of Equalization Chairman Antonio Vazquez said, in regards to the new tax measure, Proposition 19: “Seniors, the severely disabled, and victims of wildfires or natural disasters can now move to a replacement home anywhere in California and avoid significant property tax increases if eligible.  Property tax relief can be beneficial for those especially on limited incomes or who have been affected by wildfires or natural disasters.”

What is the California State Board of Equalization (BOE)?

For all of us who have heard all about BOE for many years, yet have not really understood what the California State Board of Equalization was really all about – it would be a good idea to sit down for a moment and look more closely at the BOE, and see what it is that they do, and how they break down the new Proposition 19 tax measure. 

For starters, the CA State Board of Equalization is literally the only elected tax board in the United States. It contains four Equalization District Members, positioned by locale, plus the State Controller. BOE’s legal responsibilities encompass the management of 58 County Assessors to make sure assessment best practices are in order statewide, without deviating from the set rules and regulations.

Believe it or not, the State Board of Equalization also assesses the property of public utilities along with regulated railroads, and takes in revenue from private railroad car tax. BOE also manages “Alcoholic Beverage Tax” and “Tax on Insurers”; plus property tax administration, promoting “fair and equitable assessments” – protecting tax revenue that school systems, local communities, and the California Legislature depend on, year after year.

Dispelling Confusion Around Proposition 19

The BOE also clarifies some of the confusion surrounding Proposition 19 and its’ ability to help residents avoid property reassessment, in contrast to Proposition 58; confirming that middle class seniors, age 55 and older… often  living on a modest fixed income; or those severely disabled, must meet specific requirements to qualify for new property tax breaks.

Both an “original” and “replacement residence” has to meet special requirements in order to be eligible for the homeowners’ or disabled veterans’ exemption. An application has to be completed and filed with the County Assessor to enable transfer of any taxable value. Finally, a “replacement residence” must be purchased or newly constructed within two years of the sale of an original home. If the market value of a “replacement residence” is greater than the market value of the “original residence”, the difference will be added to the taxable value when transferred.

As far as victims of a wildfire or natural disaster are concerned, similar requirements apply but there are no age restrictions. In order to qualify, a residence has to be seriously damage by a wildfire or a legally verified (frequently “governor verified”) natural disaster.

Parent-Child Exclusion, Originally Under CA Proposition 58

It is true that CA Proposition 19 limits property tax relief under CA Proposition 58, most notably the parent-child exclusion.  This eliminates the $1,000,000 assessed value reassessment exclusion as in a parent-child transfer of residential property that is not a primary residence. This obviously limits the parent-child transfer exclusion from property tax reassessment to primary residences only. 

Yet as long as that criteria is met, Californians can avoid property reassessment, keeping a low property tax base when inheriting a home; as long as the parent leaving the property resided there as a principle residence as well, plus beneficiaries inheriting the property make sure they move in within that 12-month deadline, the California parent to child exclusion from property tax reassessment is protected by Proposition 19, formerly by Prop 58.  As long as this type of property tax transfer, Prop 19 property tax break, is used properly, and the move into an inherited home occurs within one year of inheriting property taxes from a parent.  To reiterate, taken over by the beneficiary, or heirs, as a primary residence; in order to avoid property reassessment.  And according to the new tax laws, as of Feb 2021,  this is the only method left to residents, after Proposition 19 limits are imposed, to be able to  successfully transfer parents property taxes – and keep parents property taxes, basically forever.                     

Transfer of Assessed Value to a New Residence

To review, the other major changes to property tax relief for California property owners, as we touched on a moment ago, is relief for homeowners age 55 and older, folks with a disability, or victims of a wildfire or natural disaster. These residents are now able to transfer assessed value of their primary residence in any county in California – to a home they have just bought, or a newly constructed “replacement residence” used as a primary home.

These new Proposition 19 measures apply to real estate anywhere in California, if you are a resident of the state or not.  Which is a positive change – plus, certain property tax breaks used be accessible only in certain counties.   Californians with vacation homes, residential homes that are for rent, or commercial properties (owned outside any corporations, partnerships, limited liability companies, etc.) may not be able to avoid property reassessment, and may have to face property tax reassessment burdens, and may want to seek legal counsel or help from a trust lender or property tax specialist or consultant.

Is a Parent to Child Transfer Still Relevant for CA Beneficiaries & Homeowners?

Parent to Child Property Tax Transfer

Parent to Child Property Tax Transfer

In a Pandemic depressed economy, with a tsunami of unemployed and under-employed workers floating around in every state… it’s obvious that middle class working  families need to save more… and spend less – on items not classified as necessary for survival.  Property taxes being one of those sort of artificial expenses imposed on citizens by the government.

One solution for this dilemma is property tax relief, which we talk about at length on this blog.  Why not institute genuine property tax relief, not tax deferment as the state government has suggested, moving payment dates around.  Clearly ineffective in a crisis like the one we’re in right now.  California needs expanded property tax relief that’s even more wide reaching than  what we have now.  

We should be building on what we already have – not watering it down!  Despite property tax breaks that no other state has, California could use expanded tax breaks from Proposition 19, to help homeowners establish an even lower property  tax base, saving residents even more during  a crisis like the pandemic we’re in right now.  With an even greater ability to resolve inherited property conflicts between beneficiaries as well. 

In other words, a beneficiary buyout of co-beneficiary property shares, while avoiding property tax reassessment, can be re-drawn so there is no 12-month deadline for beneficiaries to follow… Plus the ability to avoid property tax reassessment on certain investment properties that have revenue potential. 

Residents need more opportunities in a depressed economy like we’re in now to drive revenue, not less.  Solutions like inheriting property taxes in California 2021 need to be expanded statewide, and legally strengthened. Solutions and firms like that will help beneficiaries & homeowners buyout a sibling’s share of an inherited home as an investment property to rent out, not just to live in as a primary residence.

Every property owner should understand the details underlying Prop 19, and know what’s involved with a beneficiary buyout of sibling property shares, or “transfer of property between siblings”, and “lending money to an irrevocable trust“ – from an irrevocable trust lender.  Every California homeowner and beneficiary inheriting property should know how a sibling to sibling property transfer works; keeping yearly taxes on property at parents low rates; and inheriting property taxes in California 2021.

Only California allows this, so it’s worth taking a closer look, and taking full advantage of.  Take a look at the site managed by CA State Board of Equalization, at and research property tax breaks  and Proposition 19 property tax relief revisions at Loan to a Trust  and read up on updates to Proposition 19 at this blog, Property Tax News.    There are also property tax consultants to learn from  such as  property tax specialist Michael Wyatt Consulting who are experts at property tax breaks that save homeowners, commercial property owners, and beneficiaries inheriting property thousands of dollars if not tens of thousands of dollars every year.   

The well known president of Commercial Loan Corp, Kerry Smith is another expert to learn from, or to receive a trust loan from, if the need is there.  Trust and Estate Loans is another source of excellent material, if you want to learn more about establishing a low base property tax rate through a trust loan, and Californians ability to execute a transfer of parents’ property and transfer of parents property taxes when inheriting parents property and inheriting property taxes during a property tax transfer with your parents’ low property tax base. If you’re going to own property in California, it’s worth it to know about your ability to avoid property tax reassessment, and to keep parents property taxes.  Well worth it!