By the Law Offices of Lisa C. Bryant, INC.
When you own or invest in property, there is a lot to think about. You have to think about repairs, get in contact with someone like my conveyancing if you’re wanting to invest in a new property, keep an eye on the state of the market, and on top of all this, the taxes seem to change every month! For long-time California home and business owners, property taxes are always a concern. Every election it seems that there are new ballot measures that if approved, could affect what you pay-this year is no different.
Statewide Californians will be deciding on Proposition 15 and Proposition 19.
Proposition 15 will have the biggest impact, if approved, for commercial property owners. Under the current law established by Proposition 13 in 1978, a commercial property owner pays property taxes based on the “assessed” value of their property (the purchase price of the property and only a maximum of 2% increases per year), not the fair market value. If property is held for a long time, there can be a significant difference between assessed and fair market values. If Proposition 15 passes, it is estimated to raise as much as $12 billion per year for local governments and schools; however, with a significant increase in property taxes for many. It does not affect residential property.
Proposition 19 will have the biggest impact, if approved, for residential homeowners. It expands the ability of homeowners 55 or older to be able to transfer their property tax payment at the same or a reduced rate if they decide to relocate within California. Currently, only some counties participate in the program, this ballot measure would make it statewide. It also would increase the number of times that persons over 55 years old can transfer their tax assessment from one to three times.
Proposition 19, however, does significantly impact inherited properties. Specifically, under current law parents or grandparents can transfer primary residential properties to their children or grandchildren (under certain circumstances) without reassessment-the kids and grandkids get to keep paying the same property tax rate as their parents or grandparents. Other types of properties, such as vacation homes and business properties, can also be transferred from parent to child or grandparent to grandchild with the first $1 million exempt from re-assessment when transferred. The ballot measure would eliminate the parent-to-child and grandparent-to-grandchild exemption in cases where the child or grandchild does not use the inherited property as their principal residence.
Our property tax system is very complicated, so it is important to understand how these measures could affect you and your family, if passed. At the Law Offices of Lisa C. Bryant INC, we discuss property taxes often with our clients because they can impact the type of planning strategy, we implement in your personal estate plan.
If you have questions about property taxes including reassessment and the parent to child exclusion from reassessment, do not hesitate to call our estate planning attorneys at the Law Offices of Lisa C. Bryant INC at (408) 402-4064 to schedule your complimentary consultation.
All materials have been prepared for general information purposes only to permit you to learn more about our firm, our services and the experience of our attorneys. The information presented is not legal advice, is not to be acted on as such, and may be subject to change without notice.