Taking Advantage of Every Key Property Tax Break

Taking Advantage of Every Key Property Tax Break

Taking Advantage of Every Key California Property Tax Break

As a CA homeowner – how do you ensure, as with a parent-child transfer,  that you’re not paying more property tax than you should?

California homeowners are hit with some of the highest property taxes in America.  So the key question we face every year is – how can we legally decrease our property taxes?  As we all know – although it’s worth a second look due to the various confusing changes imposed as of 2020,  2021 – two most popular systems we can utilize to lessen our property tax burden involve tax breaks, contained in the 1978, 1986 and 2021 property tax measures entitled  Proposition 13, Proposition 58 and Proposition 19.

To clear up some of the most confusing issues associated with Prop 19 which now implements the classic parent-child transfer or parent-child exclusion (to avoid paying current property tax reassessment, or “fair market” rates), we’ll have  to examine the updated key tax breaks associated with this type of property tax relief in California, as confirmed by the CA State Board of Equalization (BOE).

To review what most of us probably already know – if you inherit a home to be used as your primary residence from your parents or from your children, who used the property as a primary residence,  you can successfully avoid property tax reassessment at fair market rates. This special treatment also applies if you acquire the home from your grandparents (avoiding property tax reassessment through the Proposition 193 grandparent-to-grandchild exclusion), but only if both of your parents are deceased.  Naturally these processes include any basic property tax transfer designed to avoid property tax reassessment, to transfer parents property taxes when inheriting property taxes from a dad or a mom, or from grandparents.  The point being to keep parents property taxes at all costs, through a parent-child transfer.

As of February 16, 2021, an inherited home must be used as your primary residence if you wish to avoid property tax reassessment upon it. Additionally, if the difference between the property’s assessed value and fair market value is more than $1,000,000 at the time of transfer, the new assessed value will be the fair market value minus $1,000,000.

Irrevocable Trust Loans & Proposition 19 Property Tax Exclusion

Changes to CA Proposition 58 property tax breaks became active Feb 16, 2021 due to Proposition 19 – trust lenders all across Southern and Northern California are busier than ever, helping Californians who are  inheriting a home from parents, as well as beneficiaries inheriting residential property – establishing a low Proposition 13 property tax base for all inherited property going forward.

On top of all that, beneficiaries who are intent on keeping an inherited home are given, through Proposition 19, formerly Proposition 58, the ability to buyout co-beneficiaries, typically siblings, who are looking to sell their shares in the same inherited property… Only with a lot more cash in hand than a non-family outside buyer would pay for the exact same property.  

In fact, the need for middle class families to establish a low property tax base  for newly inherited property has become so urgent that well known estate & trust lender Commercial Loan Corp in Newport Beach is now offering heirs and beneficiaries inheriting a home from parents a free consultation on parent-child transfer preparation, as well as an estimate of property tax savings overall – to keep their parent’s low property tax base.  This Free Consultation for Property Tax Savings helps evaluate the benefit of a loan to an irrevocable trust, specifically for beneficiaries who want to keep inherited property at their parents’ low property tax rate, with the formerly Prop 58 [now Prop 19] parent-child transfer – to avoid current market reassessment.  This often involves an unusually fast and inexpensive buyout of siblings looking to sell their share of the same inherited home and/or land.

So to reiterate – by originating loans to trusts and estates in probate, a trust lender like Commercial Loan Corp helps to maximize the distribution of funds to a trust or estate; allowing beneficiaries to buyout inherited property from co-beneficiaries, while keeping a low property tax base when inheriting a home.  When providing mortgages to trusts or estates in probate, a good trust lender helps clients  avoid the re-evaluation of property at current tax-rates – enabling families to retain a parent’s low Proposition 13 tax base – by obtaining a parent-child exclusion, with a  parent-child transfer… saving on average $6,200+ per year in property taxes. If you need assistance with a trust loan in order to equalize a trust distribution to qualify for Proposition 19 or Proposition 58, we highly recommend you call Commercial Loan Corp at 877-756-4454. 

The Trust Loan Process From the Inside Out

Tanis Alonso, senior account manager at the Newport Beach trust lending firm, offers an experienced inside viewpoint on the trust loan transaction in conjunction with the Proposition 58 and Prop 19 exclusion from paying high current property tax rates:   

Let’s say a property value is currently one million dollars and the current tax base is $1,200. If they were to get reassessed at current value that would be around $11,000 annually.  By someone keeping the property and obtaining a trust loan to properly buy out their siblings that allows the beneficiary that is keeping the property to keep parents property taxes, to retain 100% of the Proposition 13 tax base that was paid by their parents and keep that low property tax base of $1,200.

This of course creates much greater affordability than if they were to improperly buy out their siblings and have that property reassessed. The loan to trust goes hand in hand with the Proposition 58 [now Proposition 19] property tax transfer system, creating enough liquidity to equalize distributions, not sell, and allow a beneficiary to keep their parents property with their low property tax base. It does sound counter intuitive – yet it’s true…

A Property Tax  Appeal Can Lower Taxes on Your Home

County property tax assessors in all 58 California counties assess every homeowner’s property tax by multiplying each home’s taxable value by existing applicable tax rates.  The taxable value is typically based on purchase price, generally referred to as “base-year value”.  However, tax authorities do have the right to increase taxation by up to 2% every year in tandem with inflation, plus reassess the tax value of most real properties under certain specific circumstances. 

For example, if a property owner makes changes to his or her property, such as home renovations, or  adding a large swimming pool, or perhaps building an additional wing or modernizing a kitchen or bathroom, whatever – the county tax assessor who gets a copy of that property’s building permits, might possibly reassess, if a decision to do so is made at that time. And this is when discrepancies or errors sometimes occur, when a tax assessor is also able to initiate a separate base-year value on any new renovations or re-constructed areas attached to a home. Mistakes are often associated with these reassessments.   

Therefore, one effective way to lessen your property tax burden is to reduce the assessed value of your home by filing an appeal stating that  the home’s assessed value is less than the value the tax assessor assigned to it.  

The appeal might prove that the home is in much worse condition than the assessor factored into his or her assessment… or perhaps prove that newly constructed changes to the home were not nearly as extensive as the final property tax assessment showed. Tax reduction firms typically handle county tax assessor challenges of this kind, tax appeals, and this is generally the direction most residents go in, in order to submit a successful appeal, in keeping with the CA State Board of Equalization Property Tax Dept.

California State Board of Equalization County Assessor Directory

The BOE publishes a helpful online guide that explains property tax exclusions in detail. For further information about applying an exclusion to your property inheritance, home or living situation, and any required forms you need to complete the deadline for filing these forms, contact your local tax assessor by consulting the BOE county assessor directory.

Proposition 19 Impact on CA Homeowners

Proposition 19 Impact on Property Taxes in California

Proposition 19 Impact on Property Taxes in California

Proposition 19 Impact on Property Taxes in California

Now that the popular Proposition 58 tax break system has changed into tax measure Proposition 19 – these are some of the key issues specific to modern Proposition 19 property tax relief.

These changes cover real property parent-to-child transfers after Feb 16, 2021. Whether key outcomes are based on the death of a parent before Feb 16, 2021, or based on deeds filed after Feb 16, 2021, is still questionable, whether Proposition 19 would apply, or if California parent to child exclusion from property tax reassessment, derived from Proposition 58, will apply – with respect to parental property tax transfer.

We believe the bottom line is simply to continue applying political pressure on those in power in this state – to make sure the California property tax system continues to provide genuine property tax breaks for residents, with the ability to avoid property tax reassessment via  Proposition 19 (formerly Prop 58 and its’ parent-child exclusion) in concert with a loan to an irrevocable trust – keeping a low property tax base when inheriting a home, when buying out property shares from co-beneficiaries through a trust loan; with the ability to keep parents property taxes, with the right to transfer parents property taxes, getting the most out of Prop 13 and Prop 19 property tax breaks upon the transfer of a home, when inheriting property taxes. 

Positive Changes Affecting Heirs & Homeowners From Prop 19

1. One major change is that Proposition 19 eliminates the parent-child and grandparent-grandchild exclusion from reassessment for properties other than a primary residence.

2. California homeowners over the age of 55 or with severe disabilities (which is still not defined as to what the exact definition of “severe” is) will have the ability to transfer their current property tax assessed value (i.e., “base year value transfer”) of their primary residence to another primary residence anywhere in California.

This change eliminates the problem of not being able to take advantage  of Prop 58 and its’ parent-child exclusion in all 58 counties in California – in terms of being approved, or not approved, for a base year value transfer. 

In other words, Proposition 19 is strictly statewide, without obstacles blocking your ability to avoid property tax reassessment in some counties, while there is no problem avoiding property tax reassessment in other counties!  That type of bias towards homeowners and beneficiaries in some counties caused a lot of problems in California.

This change enables residents to purchase a more expensive home rather than a more inexpensive home to keep tax the relief benefits of the base year transfer.  If a more expensive primary residence is purchased, there is now a rather complex formula to  minimize the increase in base year value.  Moreover, Proposition 19 now increases the number of times the exclusion may be used, up to three times in a lifetime.

Prop 58 Parent-Child Exclusion Has Morphed Into Prop 19 Property Tax Breaks

Prop 19 Property Tax Breaks

Prop 19 Property Tax Breaks

The Proposition 58 parent-child exclusion and other tax  breaks have now  changed into the Proposition 19 Parent to Child Property Tax Transfer

As most Californians are aware, a home undergoes reassessment at “market value” if it’s transferred, inherited, sold or gifted – and, in turn, taxes on the property often increase significantly. Yet, if the sale or gift or transfer is between parent and offspring, in certain situations, the home won’t undergo reassessment once specific requirements are met and the relevant application is filed properly.

California’s unique Proposition 58 tax break enables new homeowners or beneficiaries to avoid property tax reassessment when inheriting real estate and liquid assets; upon receiving a home or other real estate from a parent – or vice versa. When a home, for example, is sold, given as a gift, transferred as an inheritance, or transferred through a trust.  However, the fact remains – inheriting property taxes from Dad or Mom is now more limited than it was before.

As we know, a new homeowner’s property taxes are calculated through the time honored, low Proposition 13 base year value, typically what parents had paid… as opposed to so-called “fair market value” or “current market value” when new property is acquired – gifted, bought, generally inherited… As most homeowners know by now, real estate transfers excluded from property tax reassessment by Proposition 58 or Prop 193 have to be used as a principal residence (with no value limit). 

For those of you who are extra detail oriented – Proposition 58 is established in section 63.1 of the Revenue and Taxation Code.  It’s also worth mentioning that, with respect to  Proposition 193,  parents of a grandchild do have to be deceased prior to property transfer from grandparent to grandchild.  Alternatively, the grandparent’s child can be deceased, with the surviving parent-in-law being remarried prior to the transfer event.

The below bullet points may untangle some of the confusion that has formed around some of these property  tax breaks.  We need to take note that property tax relief limitations built into Proposition 19 are presently serving as a replacement to the pre-Feb 2021 Proposition 58  parent-to-child exclusion, also referred to as a “parent-child exemption” (from property tax reassessment).

Some of the new Proposition 19 tax breaks are a work in progress,  however most have been given a stamp of approval by the BOE

• Proposition 19 was more or less rushed through the political and electoral process, passed by the CA Legislature in under a week, and placed onto the Nov 2020 ballot, changing the California state constitution without implementing the appropriate statutes. Homeowners’ ability to transfer parents property taxes, in other words the right to keep parents property taxes on any parental property tax transfer, inheriting property taxes from Dad or Mom… and enabling heirs to keep parents property taxes are sill in place as valid tax breaks, allowing beneficiaries or heirs to avoid property tax reassessment – the process is just more limited than it was previously. 

Moreover, establishing a low property tax base along with the transfer of property between siblings, sibling-to-sibling property transfer – buying out a sibling’s share of inherited property through a trust loan, in conjunction with Prop 58, is still firmly in place, however inheriting property taxes from Dad or Mom is now limited somewhat by Proposition 19. Similar limitations are now in place as well concerning the process of inheriting property taxes from a parent, the parent to child transfer and exclusion for reassessment of property taxes, or parent-child exclusion (from property tax reassessment at current market rates).

• Sections of the approved documentation and revisions to various sections are vague at best and often unclear

• To correct these issues, Santa Clara County Tax Assessor Larry Stone was appointed by the California Assessors’ Association (CAA), with four other tax Assessors, to a hastily formed CAA “committee” to try to provide some clarity to the new Proposition 19 implementation process.

• The CAA “committee” has enlisted supposed specialists and tax lawyers throughout California, and is working with the Board of Equalization (BOE) to furnish guidance and where necessary recommend passage, on an urgency basis, towards implementing appropriate statutes.

• Homeowners over the age of 55 (or “who meet other qualifications” which remains vague) would be eligible for property tax savings when they move. To avoid property tax reassessment at current or “fair market” rates, beneficiaries inheriting property from parents must move within 12-months into an inherited home, using this property only as a primary or principle residence.

• Likewise, the parent leaving the home to beneficiaries must have been residing in that home as a principle or primary residence. Apparently, going forward into 2021 and beyond, there will be no exceptions to these new rules and regulations.

• Only inherited properties used as primary homes or farms would be eligible for property tax savings. Those who are “severely disabled”, or whose homes were destroyed by wildfire or a “natural disaster” can now transfer their primary residence’s property tax base value to a replacement residence of any value, anywhere in the state.  This was considerably more limited prior to Feb 2021.

• Eligible homeowners can now take advantage of “special rules” to move to a more expensive home. Their property tax bill would still go up but not by as much as it would be for home buyers that are “not eligible”.

• Eligible homeowners may use these “special rules” three times in a lifetime. (for declared disaster victims, there is no limit on the number of times these benefits can be used.)

Filing Requirements

A claim form must now, as of Feb 2021, be completed and signed by the transferors and transferee and filed with the Assessor. A claim has to be filed  within three years after the date of purchase or transfer, or prior to the transfer of the real estate to a third party, whichever is earlier.

If a claim form has not been filed by the date specified above it will be timely if filed within six months after the date of mailing of the notice of supplemental or escape assessment for this property. If a claim is not timely filed the exclusion will be granted beginning with the calendar year in which you file your claim.

Inheriting Property While Keeping a Low Property Tax Base

Keeping a Parents Low Property Tax Base

How tp Keep a Parents Low Property Tax Base on an Inherited Home

2020–2021 Slowest Growth Rate in California’s History, While Real Estate Values Soar

As average sale prices of single-family homes in California approaches $800,000 the state’s population fell by more than 182,000 people, to less than 39.5 million people in 2020; signaling the first year America’s most populated state experienced such a slow growth rate, abc7.com tells us. As experts and analysts continue to debate the reasons why… 

Economic Conditions in California Call for Property Tax Relief, Not Tax Hikes

In May, 2021 Adam Beam from ABCnews.go.com & Associated Press told us, “In recent years, more people have left California for other states than have moved there, a trend Republicans say is a result of the state’s high taxes and over-prices real estate. The average sale price of a single-family home in California hit a record $758,990 in March, a 23.9% increase from a year ago.” (2)

Ben Christopher at CalMatters.com declared on May 7, 2021 that “The number of Californians declined in 2020 for the first year since at least 1900. The COVID-19 pandemic has done what more than a century of past plagues, recessions, crime waves, droughts and earthquakes couldn’t. It shrank California’s population.” 

“The numbers don’t lie. People are leaving our state because it’s not affordable to live here…” tweeted Mr. Kevin Faulconer, former mayor of San Diego. Without knowing it, they are all correct. 

Property Tax Specialists in California Are Trying to Make a Difference – to Help Residents

To help middle class families that have been impacted by these problems, several financial services companies have been focusing on lowering property taxes for new homeowners and beneficiaries of trusts and estates – such as Michael Wyatt Consulting in Corona and the leaders of the trust lending industry, Commercial Loan Corporation in Newport Beach, who is offering a free consultation to residents on transferring parents property taxes to keep a low property tax base on an inherited home.

Trust lenders help families get approved to work with tax measure Proposition 58 and 19. They originate loans to estates and irrevocable trusts; allowing beneficiaries who are inheriting real estate and liquid assets to buyout inherited real property from co-beneficiaries; equalizing distribution of funds to beneficiaries who are selling.

Working With CA Proposition 58

CA Proposition 58 was approved by voters on Nov. 6, 1986, as a constitutional amendment; excluding from reassessment transfers of real property between parents and their children, typically  transferring parents property taxes – providing a loan directly to a trust, thereby avoiding any risk of triggering property tax reassessment. Loan proceeds are then used to pay off beneficiaries who are selling their real estate assets in line with a parent-child transfer, or “parent-child exclusion”.

Oddly enough, funding through a trust helps co-beneficiaries receive more cash than they are likely to receive from a buyer directly. The title of the property can then be transferred from the name of the trust into the name of the beneficiary who is retaining inherited property.

Utilizing Prop 58, Prop 19 & Trust Loans to Resolve Cash Flow and Family Property Conflicts

Property tax relief oriented firms in California are now working more closely with families inheriting property, alongside their attorney, or family accountant – assisting co-beneficiaries to avoid property tax reassessment at current market rates.  Beside sibling to sibling property transfer, families these days need to get as familiar as possible with their right to be transferring parents property taxes when inheriting a home and while subsequently inheriting property taxes.  Middle class families’ ability to keep parents property taxes and the property tax transfer process in general should be second nature to all middle class families. 

Frankly, all working families and beneficiaries in California should take full advantage of a free consultation from a trust lender like Commercial Loan Corp, in terms of transferring parents property taxes to save money on property taxes; plus resolving sibling conflicts over keeping or selling inherited property, with respect to how much a family can expect to save on property taxes, this year and every year thereafter!  Families can look at saving $6,000 and up every year in property taxes.

A loan to an irrevocable trust allows beneficiaries to keep an inherited home with their parent’s low Prop 13 tax base, while beneficiaries who prefer to sell receive an equal portion of cash, in fact a good deal more than an outside buyer would typically offer.

It’s also important to note that a good trust lender will help beneficiaries learn exactly how to take advantage of Proposition 19 or Proposition 58 to avoid property tax reassessment.  And by avoiding expensive realtor fees, beneficiaries on average receive an additional $15,000; and those keeping inherited property save an average of $6,200 per year in property taxes. 

CA Property Tax Specialists Clarify Their Process

Tanis Alonso, account manager at Commercial Loan Corp, discussed trust loan solutions in a 2021 interview with this blog – with respect to selling an inherited home versus keeping it. She told us:

We don’t view each trust loan as simply a ‘financial transaction.’ Nor do we see the home they’ve lived in for decades as just a ‘piece of real estate’. To us, this a ‘piece of family history’ in the making. And the process a ‘family decision,’ not a ‘transaction’. We see our clients as real families we’re assisting, financially and emotionally, not just as clients signing a contract for a trust loan. We enjoy helping people… getting them money when they really need it – saving them on the cost side in the bargain, with a trust loan.

Ms. Alonso also elaborates on the firm’s process: Besides lowering property taxes the key issue for families is selling as opposed to keeping inherited property. By someone keeping the family property, everyone receives more money than if they were to sell the property to an outside buyer. Because with a loan to a trust there is the upside of less expense. We’re talking about much less 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 ten times the amount to process the entire scenario, a house sale, with realtor commission and fees, taxes, ancillary costs, etc…

Trust Lenders and the CA Parent-Child Exclusion 

Property tax consultant Michael Wyatt formed Michael Wyatt Consulting 25 years ago to help advisors and their clients avoid inadvertent tax consequences, to achieve success and achieve their goals. Mr. Wyatt told us in a recent interview:

By and large, trust lender terms can be a lot more flexible than an institutional lender like Wells Fargo or Bank of America if they are self funded, which few are. They can extend easier terms to clients. Commercial Loan Corp is one of the few self-funded trust lenders with parent-child exclusion expertise, which is why I deal only with them, when my clients need a large loan to buyout property form siblings, and establish a low property tax base going forward.

Compliance for commercial and residential property owners is far less strict with them, due to their being self funded. They don’t charge any fees up-front, another great benefit. Plus, they don’t require paying loan interest in advance. Most trust lenders do.

There is never a “due-on-sale” clause… that requires the mortgage to be repaid in full when sold; or that all or some of the interest owed must be paid up-front to secure the mortgage. No “alienation clause” during property transfer, stating that the borrower has to pay back the mortgage in full before transferring property to another person. It’s fast, 5 to 7 days; and all costs are offset. It makes more sense for new homeowners, and beneficiaries, to take this trust loan approach … when inheriting property from parents.” 

We couldn’t have expressed it more clearly ourselves!

If you need assistance with a trust loan or questioned answered regarding if you might be able to keep a parents low property tax base on an inherited home, we recommend you contact either Michael Wyatt at (951) 264-6152 or Commercial Loan Corporation at 877-756-4454.

Propositions 58 & Proposition 19 Trust Loan

Proposition 19 Trust Loans How To Keep a Parents Low Property Tax Base On An Inherited Home In California

Proposition 19 Trust Loans
How To Keep a Parents Low Property Tax Base On An Inherited Home In California

Trust Loans: Keeping a Low Property Tax Base

California trust loans are commonly used to establish a low property tax base for beneficiaries inheriting a parent’s home, working in conjunction with California tax break Proposition 58 and California Proposition 19. 

This process, often involving a loan to an irrevocable trust, also sometimes resolves inherited property conflicts between siblings by providing needed cash for a trust distribution. In case you didn’t know, after Feb 2021 the popular Proposition 58 parent to child exclusion (from property tax reassessment at high, current market tax rates) is now essentially the Proposition 19 parent to child exclusion. It has basically morphed into the new  Proposition 19 property tax measure – yet still enabling most  beneficiaries to buyout their co-beneficiaries’ shares of inherited property and avoiding property tax reassessment for themselves, retaining a parents low property tax base going forward.

In other words, it’s still possible to buyout  a siblings portion of an inherited home and keep a parents low property tax base using California Proposition 19.  The process is sometimes refer to as “a transfer of property between siblings” or “sibling to sibling property transfer” – funded by an irrevocable trust loan – from a trust lender specializing in the trust loan and CA Proposition 58, Prop 19, and Prop 13, process. 

Moreover, it’s still possible, thankfully, to transfer parents property taxes when inheriting property.  The ability to continue inheriting property taxes, to keep parents property taxes basically forever on any property tax transfer through the parent to child transfer and parent-child exclusion, is still intact and protected by Proposition 13 and to a more limited degree by Proposition 58  and now Proposition 19.  Exactly for how long, we’re not sure — which is why voters must keep a close watch on critics of property tax relief in California, on the realtor community, and on the CA Legislature.

If you are interested in taking advantage of your California Proposition 19 property tax benefit and avoiding property tax reassessment on an inherited home, we suggest calling Commercial Loan Corporation at 877-756-4454 when a third party loan might be needed to provide the funds needed to equalize a trust distribution and buyout siblings. You may also complete the online California Proposition 19 Parent to Child information request form located here.

When a child is inheriting a home from a parent and would like to use Prop 58, or Prop 19 to keep a parents low property tax base it is still entirely possible to do so!  You may be inheriting a home from a parent, in trust, yet if there are not sufficient cash assets in the trust to make an equal distribution, then a loan against real estate in the trust will be needed to qualify for the parent to child transfer to avoid property tax reassessment – and this can still easily be done, with the right property consultant or trust lender, such as Commercial Loan Corp in Newport Beach, CA or Michael Wyatt Consulting in Corona, CA; despite some imposed limitations from California Proposition 19.

Strengthening Proposition 19 Property Tax Relief During a Pandemic

California Prop 19 Property Tax Transfer

California Prop 19 Property Tax Transfer

In the midst of a relentless Pandemic, causing untold economic carnage, unemployment and financial damage  to middle class Californians, it would be advisable for the state to provide middle income and working class residents with the ability to not only make more money, if that were to be possible,  but to be able to spend less.

One proposed solution to accomplish this – proposed by respected real estate analysts and property tax consultants – would be expanded property tax relief; despite certain limitations and obstructions from special-interest groups and changes to Proposition 58.   Proposition 19 property tax breaks should most likely be strengthened in favor of property owners, with a robust initiative led by the Governor – rather than an unhelpful deferred property tax payment plan, such as he has already suggested.

Forward thinking tax consultants such as property tax consultant, Proposition 13 specialist, Michael Wyatt Consulting have proposed property tax breaks that save homeowners, commercial property owners, and beneficiaries inheriting property more money from property tax breaks than are currently in place.   

Well known Trust and Estate Lender  Commercial Loan Corp, furnish trust beneficiaries with irrevocable trust loans, working in conjunction with Proposition 19 benefits, can establish a low Proposition 13 property tax base for homeowners, and save inheritors thousands of dollars every year in property taxes.

These property tax reduction measures – as long as homeowners make good use of them and keep inherited property, or allow other siblings or co-beneficiaries to buyout their shares  of inherited property through a trust loan working with Prop 58 tax breaks – will avoid property tax reassessment.  This process will, in fact, create a low property tax base for the singular owner or owners of this shared inherited property.  And there indeed is one solution to enable homeowners to spend less.  

This helps middle class property owners and working families to not only spend less, but also to retain more cash in  their bank and investment accounts. Most importantly, this type of trust loan financing also helps trustees and beneficiaries resolve disputes  over assessor stated property values – as well as resolving often heated conflicts over whether they should sell to an outside buyer, or profit more by allowing a co-beneficiary to buyout their property shares while avoiding property tax reassessment of this family property altogether. As realtors call it, “transfer of property between siblings” or “sibling to sibling property transfer” – lending money to an irrevocable trust, for trust loan financing  – can resolve various squabbles and infra-family problems between estate heirs and trust beneficiaries. 

Noted originator of trust loan financing, Commercial Loan Corp President Kerry Smith; and other outspoken supporters of property tax breaks for the middle classes, such as Property Tax Relief Consultant Michael Wyatt,  Jon Coupal, President of the Howard Jarvis Taxpayers’ Association; and Paramount Property Tax Appeal President Wes Nichols, have all stated, repeatedly, that Proposition 13 and Prop 58 should be better protected and expanded; That Proposition 19 should be expanded to better serve homeowners; and at the same time strengthened in the courts so Amendments that can potentially wipe out property tax breaks like Proposition 58 for example, in a single vote, will be impossible to advance without a great deal of trouble and expense.

California, since 1978, is the only state where you can avoid property tax reassessment at current rates; but the state does need to better protect, not water down, residents’ property tax relief options; to keep parents property taxes… and to transfer parents property taxes as well as inheriting property taxes at a low base rate for even a secondary inherited property.

Avoiding property tax reassessment is a crucial tax relief element, and therefore should be better  protected, for new homeowners and beneficiaries inheriting a home and/or buying out a sibling’s share of inherited property   the transfer of property between siblings, sibling to sibling property transfer, the right to transfer parents property taxes when inheriting property taxes – so beneficiaries can keep parents property taxes at its’ original low base rate… which applies to every  property tax transfer,  meaning every parent to child transfer and family parent to child exclusion.

Helpful information on Proposition 13 & Prop 58 as well as property tax appeals and property tax reduction solutions can be found at niche Websites like the CA State Board of Equalization and here at Property Tax News.  Or look carefully at various sections and articles at Loan to a Trust or at  detailed, more sophisticated trust loan info-websites.  Every property owner should know what’s involved with inheriting property taxes at a low rate, or a beneficiary buyout of sibling property shares, or “transfer of property between siblings” – with new, revised Proposition 19 basic property tax relief opportunities that are available to Californians, come rain or shine.

Working With An Irrevocable Trust Lender

Irrevocable Trust Lenders

Irrevocable Trust Lenders

First, let’s go back over the key elements involved in the most popular trust loan beneficiary-conflict solution available in California.  It’s worth mentioning that California is still the only state in America where you can avoid property tax reassessment at current rates; capped at 2% taxation basically as long as you own property inherited from parents… thanks to 1978 CA Proposition 13. 

And this is where we get into trust liquidity – something a lot of folks in California don’t really understand. California business property and residential property owners, in addition to having the right to keep parents property taxes, and transfer parents property taxes upon inheriting property, and then inheriting property taxes at the low Proposition 13 two-percent tax rate maximum – can maintain a low property tax transfer rate basically forever, through a parent to child transfer, or “parent to child exclusion”, as long as all tax relief requirements have been met, usually with the assistance of an experienced irrevocable trust lender.  

Additionally, Californians even have the right to apply for the same tax break on a secondary property inherited from parents.  Approval is a formality only. No only that, as a California property owner you can buyout as many siblings as you like; that is to say, as many co-beneficiaries as there are who wish to sell their inherited property shares – as long as you are approved for the appropriate amount of funding to a trust loan, from your trust lender… And as long as the co-beneficiaries are fully committed to selling out through a trust loan, rather than accepting less money from a third-party outside buyer – while you keep the same inherited property from your parents, financed through the trust loan, avoiding property tax reassessment for that point on, establishing and maintaining a low Proposition 13 property tax base.

Elements that drive this process are worth researching, to understand the subject better and simply to be able to work more effectively with a trust lender… Many of these process elements are covered in detail on the California State Board of Equalization website, focusing on various relevant components within Proposition 58 among others.  Or you can research heavily detailed business sites such as Commercial Loan Corp, the brainchild of forward-thinking CEO Kerry Smith;  or info-blogs such as Medium.com,  or perhaps  the Trust and Estate Loans micro-site; or the Property Tax News blog…  Trust loans working in accord with Proposition 19 make it possible for heirs and beneficiaries to sell their shares of inherited property, a co-beneficiary buyout of sibling property shares – as realtors put it, “the transfer of property between siblings”, and “lending money to an irrevocable trust“ – typically from an irrevocable trust loan lender.

Commercial Loan Corporation in Newport Beach, CA appears to be the “favorite flavor” of the decade, where trust lenders are concerned, as they specialize in taking full advantage of all Proposition 19 property tax relief benefits for clients; helping beneficiary siblings avoid property tax reassessment, while making sure they transfer parents property taxes correctly, when inheriting property taxes from parents, a business facility, home and/or land; abruptly inheriting property taxes that have to remain low, simply to free up some needed cash; in order to keep up a reasonable lifestyle, what with the cost of living in California these days.  

You also want to be careful, to work with a trust lender that has a great deal of experience with this process… To make sure that beneficiaries and  property owners take full advantage of the right to keep parents property taxes, with a low Proposition 13 tax base.  No other state in America even comes close to providing this sort of property tax relief. And property taxes in this country, for the most part, are high for a middle class and working class families. No other state gives residents the ability to use a CA Proposition 58 or California Prop 13 type of property tax transfer, with parent to child transfer, or as lawyers like to call it, “parent to child exclusion”.

The fact is, we need to know how to work with a professional trust lender to be able to use tax breaks as efficiently as possible, that as Californians we are fortunate enough to have access to.  Moreover, every property owner in every state should know how to work with an irrevocable trust lender to buy out a beneficiary’s share of inherited property; and basically understand how a sibling-to-sibling property transfer or co-beneficiary buyout of sibling property works in California.

Bottom line, every state in this country should have trust lenders to work with  to take advantage of residential and commercial property tax relief solutions similar to Californian property tax breaks such as CA Proposition 13, and now Proposition 19 – enabling property owners to keep parents property taxes, at a low 2% capped tax base from Prop 13… along with property tax transfer benefits still in effect from CA Proposition 58; enabling the transfer of property between siblings, or, more specifically, allowing a co-beneficiary buyout of sibling property, paying them cash to not sell out, while you get to keep your parent’s house and/or land at that super low Proposition 13 protected tax base.

If you are in need of a loan to an irrevocable trust, please completed this form and we will have a representative from Commercial Loan Corporation contact you; or you may call them at 877-464-1066:

Inheriting a Home and Keeping the Property Tax Base Low with Proposition 19

Inheriting a Home and Keeping the Property Tax Base

Inheriting a Home and Keeping the Property Tax Base

It looks like we’re back again to a proposed “wealth tax” in California. There is certainly nothing wrong with getting rich, and more power to anyone in that position, or with that ambition. However, Californians that are privileged and fortunate enough to have amassed billions or hundreds or tens of millions, really should not be complaining too mightily with any modest “wealth tax” being proposed… As long as the tax is reasonable and doesn’t go too far.

Indiana University law professor David Gamage, who has helped develop wealth tax proposals, said recently, “All around the world you see increasing awareness of growing wealth and income inequalities, combined with growing awareness that our tax system is not up to dealing with this problem.”

As a Pechter Baking company heir, a New York millionaire himself, once said – “Don’t feel too sorry for these folks. They’ll still be eating in the same restaurants!” Supposedly, the wealthiest 1% pay 46% of all state income taxes in California. With the tax cuts that were delivered to the country’s wealthiest families, this number seems unrealistically high.

Nevertheless – if you were the California State Legislature and you decided you needed more cash reserves to pay off  unfunded state government pensions – it would make a lot more sense to take that extra property tax revenue from households with way more cash than they know what to do with – rather than create and implement a middle class property tax hike.  A tax hike, for example, as California is dealing with right now – with voters often not comprehending what the details are all about.

Fast-forwarding into the near future – as soon as middle class beneficiaries are in the position of inheriting a home from a Mom or a Dad, they’ll begin to  understand certain limitations with the existing property tax breaks now in affect – and at the same time will see, usually after consulting with a trust lender, that it is almost always more profitable to sell an inherited home through an irrevocable trust, as a sibling-to-sibling property transfer, than to sell it directly to an outside buyer – collecting the property sale funds from an irrevocable trust that was opened up by co-beneficiaries through a trust lender.  A process we have discussed elsewhere in this blog.

Moreover, despite certain limitations imposed by existing property tax breaks, California still has property tax relief options that beneficiaries and homeowners in other states can only dream about, thanks to still-healthy property tax relief furnished by Prop 13; and Prop 19 – which  is now functioning as an updated Proposition 58 for all intensive purposes.  

To reiterate, it would make more fiscal sense, as well as more common sense, to extract that extra property tax revenue from billionaires and multi-millionaires, than taking it from working families, middle class beneficiaries and homeowners living on $50,000 or $60,000 per year – grappling with an updated Proposition 58, or Proposition 19. The State Legislature and their friends at the CA Realtors Association attempted a   virulent tax hike with a commercial property  tax hike called Proposition 15… but alas that failed to pass.  In the midst of a Pandemic no less – Proposition 15 would have raised taxes on apt building and office building landlords, commercial shopping center owners and store properties being rented out to hundreds of thousands of commercial tenants all across the state…

As we all know, this would have caused commercial and business property owners to increase rents on their residential and business tenants – which would have, in no time at all, forced store merchants and the like to raise prices on all goods and services, to keep up with their higher rent. Moreover, this would most likely have been the beginning of the final unraveling of the 1978 Proposition 13 tax relief package. The door to worse things to come, so to speak, would have been opened, had it passed… and the keepers of the anti property tax relief community would have marched through.  However, it did not pass.

However, property owners should first study up on the property tax breaks protected by Prop 13 and Proposition 58.  Every property owner and heir or beneficiary inheriting property from parents should be fully aware what is involved with the process that trust beneficiaries and probate heirs have access to, working with a trust lender, through a trust loan working in tandem with Proposition 19, to buyout shares of property inherited by co-beneficiaries; plus establishing a low property tax base, in line with Proposition 13 tax breaks – frequently referred to as a beneficiary buyout of sibling property shares, or as realtors call it, “the transfer of property between siblings”, and “sibling-to-sibling property transfer”.

Every homeowner in the United States should know how to buy out beneficiaries’ shares of inherited property; and how a sibling-to-sibling property transfer works; how a loan to an irrevocable trust can help co-beneficiaries get more cash and pay lower taxes than if they were selling their shares of an inherited home to an outside buyer. Everyone who is inheriting property should be familiar with sibling-to-sibling property transfer and how to transfer parents property taxes when inheriting a home, while inheriting property taxes…understanding why the ability to keep parents property taxes, and the right to a property tax transfer under all circumstances, is so crucial to property tax relief in California – namely parent to child transfer and the parent to child exclusion tax break in particular, that must be protected and preserved for the overall good of middle class California.

Only then will beneficiaries and new homeowners fully understand how to keep yearly taxes on property they now own at the low base rate their parents paid, saving thousands of dollars every year, decade after decade.  For those who don’t fully believe all this… they can read up on the facts, at the official Website managed by the CA State Board of Equalization, at or research informative blogs and sites that specialize in property tax relief, in property tax breaks for middle class homeowners – as opposed to the usual tax cuts for millionaires and billionaires.

With some in-depth knowledge of these money-saving tax relief solutions, it’s possible to get the best out of a tax attorney or CPA, property tax consultant and/or tax reduction company, as mentioned above.

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!  

Does the 1978 Proposition 13 & 1986 Prop 58 still Work for Californians?

Does the 1978 Proposition 13 and 1986 Prop 58 still Work for Californians

Does the 1978 Proposition 13 and 1986 Prop 58 still Work for Californians

History Lesson on Property Tax Relief: Support & Opposition

2020 was an extremely motivated time for pent up anti property tax relief movement in California.  The deceptively entitled “2020 Proposition 13” went to voters on March 3, 2020. This tax hike would have increased California’s overall debt; compelling the state’s school districts to issue more debt, raising property tax bills all across the state. It did not pass, and to put it bluntly, was an utter waste of time and taxpayer’s money.

Unlike Proposition 13 passed by voters in 1978, this 2020 version of Proposition 13 would have doubled the debt caps that currently limit how much bond debt local school districts can acquire. The 2020 Proposition 13 caps on local bond debt would have been increased from 1.25% of assessed property value to 2% for elementary and high school districts, and from 2.5% to 4% for school and community college districts.

The extra property tax revenue from 2020 Prop 13 would have gone into pockets not into roads.  The  2020 Proposition 13 tax hike would have cost taxpayers $740 million per year for 35 years. The cash mainly going to construction-worker unions and contractors that hire everyone, with priority spending going to people working on projects in districts that have signed labor agreements that those in  power prefer.  As we know, the so-called 2020 Proposition 13 failed.

Prop 15 and the Near End of Commercial Property Tax Relief     

Even more dangerous for California, the 2020 Proposition 15 tax hike that was proposed to voters across all 58 counties would have removed the right for commercial property owners to avoid property tax reassessment.  This would have raised property taxes on all commercial and business property owners, which would have raised commercial store rents, office and apt. rentals, rentals on all business tenants would have gone up.  This would in turn have increased prices on all goods and services throughout the state of California.   Considering the outcome on middle class residents and working families, it would not have been a pretty picture.

Supporters of the Proposition 15 campaign raised over $67.6 million mostly from foundations and public service unions. The top three contributors were the Chan Zuckerburg Initiative, California Teachers Association, and SEIU California. Supporters say Prop 15 is a broad coalition of 1600 organizations launched by civil rights organizations, housing groups, parents, teachers, nurses, firefighters and community-based organizations who advocate for equality and justice for communities of color

Opposition to Proposition 15 Campaign has raised over $73.1 million mostly from land developers, agricultural interests and golf and country clubs. The largest donor is the California Business Roundtable Issues PAC that has contributed more than $38 million to the No on 15 Campaign.  The Business Roundtable’s biggest donors are New York-based Blackstone Property Partners who gave $7 million and Michael Hayde, CEO of the Irvine real estate investment firm Western National Group, who gave $4.5 million.

Despite the massive effort towards promoting and passing this tax hike, voters were not sufficiently confused or conned into backing the bill en mass… and they rejected this tax increase on commercial properties, supposedly depriving the California school system of what allegedly could be a significant source of consistent revenue.  Although the true intended recipients of this extra commercial property tax revenue remained under questions… and backers of Proposition 15 – the first major effort to cut into beloved property tax relief afforded by Proposition 13 since it was voted into law in 1978 – finally conceded defeat, and California heaved a statewide sigh of unified relief. 

The question remains – would economic collapse of the statewide   consumer base and working family structure in California have been worth a few extra dollars for the educational system, which is doing relatively well as is?

Last Minute Promotion of Snake Oil Sales to California Voters

Motivated, determined and relentless opponents to property tax relief in California came up with a last minute tax hike measure, Proposition 19 – and the CA Association of Realtors shoved $35 Million at the CA Legislature to promote this unusually deceptive bill, after suffering significant tax hike losses.  They managed to confuse enough voters with disingenuous and deceptive public relations to get Proposition 19 passed – by a hair – and watered down the critical Proposition 58 “parent-to-child exclusion” tax break for middle class beneficiaries and new homeowners. 

This weakened California homeowners’ ability to avoid property tax reassessment without obstacles. So Proposition 19 managed to limit parent to child transfer rights to a one-year window, and only as a primary residence.  No longer could investment properties avoid property tax reassessment.

So the ability to transfer parents property taxes, when inheriting property taxes from a parent, is now on a tighter path. We can still keep parents property taxes but they made it more challenging, in the midst of a Pandemic no less.  Avoiding property tax reassessment and establishing a low property tax base; as well as buying out a sibling’s share of inherited property, meaning the transfer of property between siblings or sibling-to-sibling property transfer – still exists, yet with a few more obstacles to remain aware of. 

We can still transfer parents property taxes in California when  inheriting property and inheriting property taxes from a parent, and remain able to keep parents property taxes on any property tax transfer, such as the parent to child transfer or parent to child exclusion.  It’s just not quite as simple or easy as it was prior to advent of Proposition 19.

Thankfully, enough property tax breaks survived in California to enable property owners to still save significantly on property taxes. Californians can still get a trust loan from a trust lender, working alongside Proposition 58, to buyout a co-beneficiary when inheriting property taxes from a parent – and, most importantly, to establish a low Proposition 13 level property tax base, basically forever for an inherited home, for example from a niche firm like Commercial Loan Corp.  

Most Californians struggling financially from Pandemic shutdowns and health outcomes should research niche blogs like this one, or   info sites like EdSource.org who looks  at both sides of Proposition 15 for example, or SiliconValleyandBeyond.com who examines property taxes and Proposition 19, among other related issues. As well as state government websites such as the  California State Board of Equalization.  The more we know about how to use trust loans and these unique tax breaks, plus other property tax reduction solutions we have access to, the better off we’ll all be going forward.