These important changes to California Real Estate Law could significantly affect you and your family. Make sure you are aware of what the changes mean to you.
Proposition 19 makes changes to the following:
- Tax basis portability
2. Intergenerational transfers to children or grandchildren
Tax basis portability
It allows a 55+ homeowner, severely disabled or whose home was damaged by wildfire/natural disaster to transfer tax basis of their primary residence to:
a) a replacement primary residence anywhere in CA,
b) regardless of the value of the replacement (with adjustments if the replacement has greater value)
c) within 2 years of the sale and
d) up to 3 times
The tax basis portability portion of Prop 19 takes effect April 1, 2021.
Intergenerational transfers to children or grandchildren
Prop 19 limits the exemption to only properties where the primary residence is used as a family home by the child or grandchild transferee. The taxable value will remain the same, subject to upward adjustments if the property value, at the time of transfer, is more than $1M over the original tax basis.
If the property is more than $1M over the original tax basis, the new taxable basis will be the assessed value of the property at the time of transfer minus $1M.
The intergenerational transfer portion of Prop 19 takes effect February 16, 2021
It’s always wise to seek advice from a qualified CA real estate attorney or tax advisor.
*Please reach out to me as I have great local CPAs, 1031 Exchange specialists, and Real Estate Attorneys that I can refer to you should you need to see how these changes may affect you and your family.
Source: Tom Ferry & California Association of Realtors
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