California voters last month approved Proposition 19 by a slim margin, making significant changes to the tax provisions governing transfers of a principal residence from parents to their children. These changes take effect on February 16, 2021, and could impact existing California property transfer planning by subjecting such transferred residences to property tax reassessment.
Taxpayers may wish to consider changes to their property transfer planning in light of the passage of Proposition 19. Affected taxpayers are those who own property in California subject to a planned transfer to their children. Effective February 16, 2021, Proposition 19 will expose such transfers to reassessment unless the transferees meet residency requirements and the fair market value is not more than $1 million higher than the taxable value just before the transfer.