Proposition 19 (Prop 19) is a new amendment in the California property tax amendment. This law made two changes to the existing property tax law. Hence, it will have an impact on your real estate planning.
It was approved in 2020 by the voters in California, and this law is seen as one of the most drastic property tax laws we have witnessed in history. The positive about Proposition 19 is that homeowners can transfer the tax value of their residence to another residence in California and have the same value.
If you feel threatened by this new law, you shouldn’t hesitate to seek legal advice. To get the best service, you should contact the law offices of R. Grace Rodriguez. Let’s help you devise an actionable plan.
We have come up with this article to have an explicit discussion on the effect of Prop 19 on property tax. It will also prepare you so that you won’t be affected by the changes when the time comes.
The Good Side Of Prop 19
The good part of Proposition 19 is that it has great tax advantages for the homeowner. With this rule, parents can transfer real property to their children without any tax reassessment.
If you intend to work with Proposition 19, you must understand that certain things are limited. In the rule, it states that when a child receives the primary residence during the transfer, they must stay in the house for one year.
If you own a high-income rental property that you intend to pass down to the next generation, you are advised to do so before the 16th of February 2021. This is because the Proposition 19 rule takes place on that day.
Transferring your property to your children simply means having the income tax carried over. Parents must note that if they intend to use this property in the future, they would need to pay rent to the current owners.
There are some cases where multiple owners will have the right to ownership of the property. In a case like this, they will need to sign an agreement for property management. As a homeowner, you must understand that your children need to decide whether they want to remain in the property or not before passing it down to them. When they are fully aware of the implications of not staying in the property, they will do their best to make it work.
One thing you must understand about Proposition 19 is that the options for tax planning are limited. If you want to go through the entire process with ease, you should work with the Law office of R.Grace Rodriguez.
We are fully dedicated to ensuring that you get the best and affordable services. We are compassionate, understanding, and patient enough to get you the best results. Our main solution is to provide you with the best legal solutions anytime you need one. Feel free to reach out to us today.