Howard Jarvis Taxpayer’s Association – December 7, 2021
The Howard Jarvis Taxpayers Association is fighting to reverse one of the largest property tax increases in state history, a little-noticed provision of Proposition 19 that revoked the ability of parents to pass property to their children without any change to the property tax bill.
Proposition 19 passed narrowly in November 2020, and the provision affecting intergenerational transfers became effective on February 16, 2021, barely three months after the votes were counted.
Previously, parents could pass their home and up to $1 million of assessed value of other property to their children, and that property was excluded from reassessment. The property tax bill would not change as a result of the transfer. That was the law under Proposition 58, passed by more than 75% of voters in 1986. Ten years later, voters passed Proposition 193 to extend the same rules to transfers between grandparents and grandchildren if the children’s parents are deceased.
But that all changed with the passage of Proposition 19, a measure that won a squeaker of a victory after a costly and deceptive advertising campaign that neglected to tell voters the whole story. Under Prop. 19, only a principal residence is eligible for an exclusion from reassessment, and only if the children move in within one year and the home becomes their principal residence, permanently. Some family farms also qualify for an exclusion.
All other property will be reassessed to market value as of the date of transfer. Children who can’t afford the new tax bill will be forced to sell the family property.
Your HJTA is fighting to reverse this tax increase. As an interim measure, we sponsored Senate Bill 668, introduced by Sen. Patricia Bates (R-Laguna Niguel), to extend until 2023 the effective date of this enormous change to the tax code. Sadly, others in the state Senate blocked this bill from moving forward.
However, Sen. Bates has joined us in supporting Assembly Constitutional Amendment 9, introduced by Assembly Member Kevin Kiley (R-Rocklin), which would reinstate Propositions 58 and 193 to the state constitution. ACA 9 will restore Proposition 13 benefits to children, preserving the legacy of parents and grandparents who have worked for decades to pay off mortgages on homes and small businesses, and who hope to pass those assets to the next generation so they can have a better, more secure future.
You can help by going online to reinstate58.hjta.org to download a flyer you can share with friends and neighbors, and by contacting your state representatives — look up their names and contact information at findyourrep.legislature.ca.gov — to urge them to support ACA 9.