Prop 19

[kuksul08]

What do you guys know about Prop 19? This bill passed in November and the implications are pretty crazy. Anyone who has parents with property is liable to pay a shit ton of taxes on inherited property unless action is taken between now and Feb 11th.

From what I gather, it makes any property over $1M get reassessed for current market value if it is inherited, unless it's been put in a trust before the changes go into effect. As we know, that includes just about a majority of the bay area where most people are still paying "normal" home price taxes.

It was worded in a way that makes it easy for old people to move and carry their tax basis to different homes in CA, but in reality it's going to MASSIVELY increase property taxes for generations to come.

Anyone have input or thoughts?

 

[dravnx]

There are $10,000,000 properties out there that are owned by 3rd and 4th generations that are paying $500/year property tax.
That's an exaggeration but the system needed to be fixed.

 

[UDRider]

https://www.jdsupra.com/legalnews/california-proposition-19-what-does-30766/

Beginning Feb. 16, children who inherit real property from their parents will have to factor in increased property taxes in the decision to keep or sell the property. If a child chooses to keep the real property and use it as the child’s primary residence, then up to $1 million of the reassessed value will be excluded from the new property-tax basis. (Before, primary residences could be transferred with no cap.) If the child chooses to keep the property as a second home, vacation home or rental property (anything other than as the child’s primary residence), there is no $1 million exclusion and the child will face a significant increase in property taxes.

Not quite, it will be fully re-assessed if it's none primary residence. Otherwise up to $1M will be excluded.

 

[kuksul08]

There are $10,000,000 properties out there that are owned by 3rd and 4th generations that are paying $500/year property tax.
That's an exaggeration but the system needed to be fixed.

Yeah, property tax should be eliminated :thumbup

 

[Eldritch]

What do you guys know about Prop 19? This bill passed in November and the implications are pretty crazy. Anyone who has parents with property is liable to pay a shit ton of taxes on inherited property unless action is taken between now and Feb 11th.

From what I gather, it makes any property over $1M get reassessed for current market value if it is inherited, unless it's been put in a trust before the changes go into effect. As we know, that includes just about a majority of the bay area where most people are still paying "normal" home price taxes.

It was worded in a way that makes it easy for old people to move and carry their tax basis to different homes in CA, but in reality it's going to MASSIVELY increase property taxes for generations to come.

Anyone have input or thoughts?

https://lao.ca.gov/Publications/Report/3706

This is a good change. Your neighborhood is not a right, if your neighborhood becomes too wealthy for you to pay the property tax, you should get out and go live by people in your income bracket.

 

[Map8]

I'm not sure all the facts in the OP's post are correct.

Prop 19 was a slightly modified version of Prop 5 which failed to pass in 2018. The biggest change between the two was to direct some of the additional revenue generated toward fire protection which attracted endorsements from some organizations that would not have endorsed Prop 5.

Ballotpedia is a good source for information candidates, propositions and local measures.

Here is the Ballotpedia page for Prop 19. Text of the proposition, title and summary, ballot arguments, funding sources (for proponents and opponents) along with excerpts from major newspaper editorials are included at the link.

 

[UDRider]

I would be interested in seeing how this will impact inventory in upcoming years.

 

[ScottRNelson]

From what I gather, it makes any property over $1M get reassessed for current market value if it is inherited, unless it's been put in a trust before the changes go into effect.

Why would it matter when it was put into a trust?

If you're expecting to leave anything to your descendants, it should all be in a trust. And it's not all that cheap to have one made up either, like $1-2K to set one up. I just had a new one set up last year. One more way that lawyers have found to make money off of the rest of us.

 

[Eldritch]

Why would it matter when it was put into a trust?

If you're expecting to leave anything to your descendants, it should all be in a trust. And it's not all that cheap to have one made up either, like $1-2K to set one up. I just had a new one set up last year. One more way that lawyers have found to make money off of the rest of us.

When you are talking about an asset like a home, even in a low cost place like Idaho, $1-2k is not very much.

 

[scootergmc]

I would be interested in seeing how this will impact inventory in upcoming years.

There's a reason why the CA association of realtors was one of the largest proponents.

 

[kuksul08]

Why would it matter when it was put into a trust?

If you're expecting to leave anything to your descendants, it should all be in a trust. And it's not all that cheap to have one made up either, like $1-2K to set one up. I just had a new one set up last year. One more way that lawyers have found to make money off of the rest of us.

I don't know.. that's why I'm here asking. The points in the OP are just what I gathered from various posts I found while researching.

 

[kuksul08]

https://lao.ca.gov/Publications/Report/3706

This is a good change. Your neighborhood is not a right, if your neighborhood becomes too wealthy for you to pay the property tax, you should get out and go live by people in your income bracket.

That's a really good article. Thanks!

I'm not sure where you're expecting people to "get out" to if they've lived and worked here their whole lives and would like to keep a family home in the family. I would say it could positively affect the ridiculous rent situation by making more homes available, but nobody is winning since prices will still be astronomical and there are no benefits to new home buyers. Instead, we all lose and give the state more money for them to mismanage.

 

[m0t0_ryder]

I think what this will do is end Prop 13 protection within one generation.
It is a back door way to do it because a direct change to Prop 13 has never been successful.
Since I'm in prop 13 protected house I don't want to see any changes.

Prop 19 means I would need to put the property in my Son's name before the February deadline or taxes will go up upon sale or transfer. Up a lot.

I found this video fairly descriptive of Prop 19 pro's and con's.


youtu.be/Bed25bV0zVY

 

[m0t0_ryder]

IMO the biggest problem with Prop 13 is that it includes family business properties.
I do not believe that was the original intent of the law.
If Prop 13 was amended to exclude business properties a lot of those "lost billions" would be "recovered.

 

[bikeama]

https://lao.ca.gov/Publications/Report/3706

This is a good change. Your neighborhood is not a right, if your neighborhood becomes too wealthy for you to pay the property tax, you should get out and go live by people in your income bracket.

Thank you for reminding everyone why Prop 13 was passed.

 

[kuksul08]

Thank you for reminding everyone why Prop 13 was passed.

Explain?

 

[Killroy1999]

The positive side of prop 19 was that it allowed seniors to keep their low property tax even if they buy a new home.

So if grandma lives in a 4 bedroom 4 bath place, but grandpa died and all the kids moved out, she could downsize but not upsize her property tax. Increasing mobility, increasing available housing and thereby helping the housing crisis.

I voted no. I dont think its a big deal. Prop 12 allows up to a 2% increase per year, so it's not like property tax is locked in. Perhaps I need to look into the data.

 

[scootergmc]

I can't comment without getting political, but this is just another money grab, pure and simple.

 

[Eldritch]

That's a really good article. Thanks!

I'm not sure where you're expecting people to "get out" to if they've lived and worked here their whole lives and would like to keep a family home in the family. I would say it could positively affect the ridiculous rent situation by making more homes available, but nobody is winning since prices will still be astronomical and there are no benefits to new home buyers. Instead, we all lose and give the state more money for them to mismanage.

Well, that is the idea here. You don't get to keep a home in the family. When someone dies, the family sells the property. The industry is trying to shake more cash out of real estate and keep inflating prices with more sales.

The important thing here is WHILE you are doing this, don't green light too many new building projects. Then we can finally achieve our planned utopia of only very wealthy home owners who live near pods of servant class labor living on public assistance to provide the services the robots can't.

Thank you for reminding everyone why Prop 13 was passed.

No prob, I provide Low Income Housing for a living, so I'm pretty keyed into the issue.

 

[bikeama]

Explain?

This quote " Your neighborhood is not a right, if your neighborhood becomes too wealthy for you to pay the property tax, you should get out and go live by people in your income bracket."

I am old enough to remember before Prop 13. I worked with an old man at that time who was ready to sell his home as the yearly taxes were more than he paid for the home. Many states have high property taxes and they go up every year. I have friends in MN who have to sell the big family home and go to a condo when they retired, could not afford the taxes. Sorry but that is wrong and that is why Prop 13 passed.