Susan Shelley, VP of Communications at The Howard Jarvis Taxpayer Association, joins me to talk about the on-going effort to repeal the bad policies of Proposition 19 the California voters were fooled into passing. We also discuss the challenges to getting the right information into the right hands for better informed voting in future elections and primaries.

Help Fix Prop 19 – Multigenerational homes are at stake!In 1986 Proposition 58 passed allowing inheritors to keep their parents similar yearly property tax amount.

In 2020 Proposition 19 took that away. 

In the lead up to the election, I covered the major propositions that affected property owners in California. I devoted three episodes covering Prop 19 and warning voters to vote NO on it. That was made all the more difficult when The California Association of Realtors endorsed the proposition and promoted a supposed member of the Howard Jarvis Taxpayer Association that also supported the proposition.

After the election, viewership on my episodes spiked and people realized they had just voted away their children’s inheritance.

Proposition 19 (Home Protection for Seniors, Severely Disabled, Families and Victims of Wildfire or Natural Disasters Act) was marketed as giving property owners the ability to keep their property bill based on the significantly altered property tax rules. It allows homeowners over 55, disabled persons, or wildfire victims to transfer their low property tax base anywhere in the state, up to three times.

This is a major benefit considering the new home can be more expensive than the old one. The transferred base is adjusted upward by the difference in value (plus an inflation factor). This gives more flexibility for downsizing, upsizing, or relocating within the state

Thing is, this benefit already existed though in a limited fashion with participating counties.

Before Prop 19, Parents could often transfer their low property tax base to children (Proposition 58) or grandchildren in limited cases (Proposition 193) for any real property, with few restrictions. This helped keep taxes low on inherited homes, vacation properties, rentals, etc.

Proposition 19 (effective Feb. 16, 2021) killed Props 58 and 193 and adjusted the rules like so:

• The exclusion now applies only to the principal residence of the parent (and must become the principal residence of the child within one year).
• There’s a value limit: The home’s taxable value can be up to the parent’s current taxable value + $1 million (adjusted every two years for inflation).
• Non-primary residences (e.g., second homes, investment properties, or rentals) generally trigger a full reassessment to current market value upon transfer, which can significantly increase property taxes for heirs.

In my business, I deal with established homes that have not sold for decades. In that time, property values have skyrocketed. The heirs to those properties almost always choose to sell the property because 1) they’re all grown up with families of their own and live outside the area or out of state and therefore can’t move in the home, and 2) the property tax bill is reassessed despite no sale or refinance occurring.

Additionally, Prop 19 established the California Fire Response Fund (CFRF), designed to fund wildfire suppression and prevention with revenue taken via Prop 19 adjustments. I have yet to see any benefits from that program.

Previous attempts at fixing/repealing Proposition 19 failed.

Hopefully, this latest attempt to fix Prop 19 has a better shot.

We need to protect the good parts of Prop 19 and correct the parts that stole your rights. 

Goals:

1) To reinstate the original “Parent-Child Exclusion”
If passed, it would allow parents to transfer a primary residence (of any value) and up to $1 million of other property (like rentals or vacation homes) to their children without a tax reassessment.

2) To protect family and generational homes

3) To protect seniors and disabled
Seniors are the fasting growing group to experience homelessness

4) To keep teachers in their districts
Prop 19 drives teachers out of district.

5) To protect Tenants and Affordable Housing
Properties would be subject to reassessment when a landlord passes
– Increased rent for tenants to cover the reassessment
– Inheritors may need to sell to developers

6) To protect small businesses
Reassessment may be enough to close these small businesses for good

“Property held in a trust is still subject to Prop 19” – Phong La, Alameda County Assessor

You can learn more and sign the petition at https://forcalifornians.com/

Learn more about the Howard Jarvis Taxpayers Association at www.HJTA.org

https://TheAndresSegovia.com

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