Previously under Proposition 58, passed overwhelmingly in 1986, a home of any value and up to $1 million in assessed value of other property could be transferred between generations without any change to the property tax bill.
But because of Proposition 19, that is no longer true. Now, all transferred property will be reassessed to market value as of the date of transfer. The only exceptions are a family home that becomes the permanent primary residence of the child within one year, and some family farms.
The new annual tax bill on the family’s property will be 1% of the current market value. Children who can’t afford the new tax bill will be forced to sell.