Prop. 19–which won voter approval in the November election–changes the game for children inheriting property from their parents. Effective this February 16th, Prop. 19 will disqualify transfers of business property, rental buildings and other property that’s not the “family home” from reassessment protection.
Additionally, for transfers of their principal residence from parents to their children, the property tax base will be reassessed unless the children meet residency requirements and the market value isn’t more than $1 million higher than the tax base value just before the transfer.
The SF Assessor’s office is expecting a lot of last-minute activity around ownership transfers. They are offering this alert: “If you plan to record a deed before Proposition 19 becomes effective on February 16, 2021, please note that February 15, 2021 is President’s Day, a legal holiday, and our Office is closed. We expect a high volume of document submissions during that time, any discrepancies or errors found in the process may require additional time to clarify or correct, which may cause further delay on the recording timeline.”
Tax matters are complicated, so I highly recommend consulting your real estate attorney and your CPA if these new changes apply to you.