Many voters did not know that Prop 19 would end the long-standing protections from tax increases when property is transferred from parents to children.
Prop 19 effectively abolishes prior protections and causes a property to be reassessed to market value when it is transferred from parents to children, and sometimes from grandparents to grandchildren.
Not only did many voters not understand the implications of Prop 19, but the measure also lacks clarity for proper implementation of such a significant change to our tax system. In January, Shannon and I attended a webinar hosted by the office of the Los Angeles County Assessor. There were hundreds of attendees confused about the implementation and intricacies of the new law. The Assessor shared with us the office’s uncertainty of how the new law would be properly implemented.
Senator Patricia Bates has introduced Senate Bill 668 to delay the implementation date of this provision of Prop 19 from February 16, 2021 to February 16, 2023. The delay would apply specifically to the intergenerational transfer exclusion, and would allow the Assessor’s office, the State Board of Equalization, and the Legislature to clarify implementation ambiguities. The delay would also give families additional time to seek professional advice on how a transfer of property to children will affect potential tax liabilities.
We can all agree that Prop 19 lacks clarity, and additional time is needed to resolve the many unanswered questions.
What we do know for sure is, there are important steps you can take now, to protect your assets and to ensure your loved ones are taken care of. Please reach out to us. We would love the opportunity to help.
The bill is currently awaiting referral to a Senate policy committee.