Upcoming impact of the California Proposition 19

Upcoming impact of the California Proposition 19

A new California constitutional amendment, California Proposition 19, replaces the exemption for transfers between parents and children (and grandparents and grandchildren) with a far more limited exemption. It was approved by voters and will add Section 2.1 to Article XIIIA of the California constitution.

For transfers of property between parents and children, or grandparents and grandchildren, occurring on or after February 16, 2021, the exemption will apply only to principal residences that will be used as the principal residence of the transferee and the amount qualifying for the exemption will be limited to the residence’s current assessed value plus $1 million. If the fair market value of the residence exceeds this value then the property will be partially reassessed for the difference.

Individuals who were planning to use the current parent/child, or grandparent/grandchild exclusion should speak to their advisors to determine whether this law will affect their planning.

Source: Assembly Constitutional Amendment No. 11, November 3, 2020, https://voterguide.sos.ca.gov/propositions/19/

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