California voters voted “yes” to Proposition 19 in November 2020, but there is an active petition to repeal it; if you are interested in adding your signature and are a Santa Clara County voter, please reach out to me by April 8th.
I believe that most voters read the first part of the proposition and voted “yes” because they agreed with it (I agree with the first part as well), but never actually read the second part or fully understood its ramifications.
Prop 19 was a two-part proposal:
The first part states that homeowners who are over 55, severely disabled, or whose homes were destroyed by wildfire or disaster can transfer their primary residence’s property tax base value to a new home purchase of any value anywhere in the state. They would therefore not be prohibited by property tax increases in buying a new home. Yes! That sounds great.
However, the second part repeals Proposition 58 (passed in 1986), which allows for a parent’s property tax base to transfer directly to their child. Critics of Prop 19 are calling it “The Death Tax” because of this. When a parent dies and the home transfers to their estate (their children), the children will be reassessed at current value.
For many people living and working in California, real estate is the foundation of their wealth, and sometimes the one thing that they can pass down to their children when they die. By taking away the ability to keep parents’ property tax basis and instead to be reassessed at current value, many children will be unable to afford and retain the home. In addition, if they do keep it as a rental property, then we may see increased rents so that the new owner is able to afford the higher property taxes.
By repealing, I am confident that the first part would be sent back to Californians for voting, and hopefully it would stand on its own. I have the petition in hand and have signed it; do send me an email if you want to contribute your signature to it as well.