Store
by God-Mother Elizabeth Quida
On Tuesday, Nov. 3, 2020, Californians voted by a narrow margin to pass Proposition 19. This new real estate property tax law substantially changes property tax benefits for families, particularly parents and their offspring. Prop 19 becomes effective in just a few weeks, on Feb. 16, 2021. So, please put a pin in this important date, educate your family and act with extreme urgency.
During the 2020 election cycle, media ads promoted Prop 19 as an effort to “Help the Fire Victims” whose residences were destroyed by California’s raging wildfires. Under Prop 19, fire victims will soon be able to transfer their primary residence’s taxable assessed value to a replacement residence of any value anywhere in our state.
This means that fire victims can acquire a new primary residence of greater value than the one lost in the fire, while transferring the lower taxable assessed value. What a great tax break! However, not mentioned in those slick commercials was the special rule that may lead to a huge real estate property tax hike for families and children who inherit properties.
Some may recall that that nearly 35 years ago, on Nov. 6, 1986, Prop 58 was approved by California voters. That constitutional amendment allowed a child to inherit real estate property from their parent without the worry of a reassessment and property tax increase.
Proposition 19, when it goes into effect, will severely restrict the protections afforded by Prop 58. For example, the taxable assessed value for real estate rental property will no longer be transferable from parent to child. There are a host of other restrictions and rules that will severely impact the tax protections of inherited property.
Not mentioned in those slick commercials was the special rule that may lead to a huge real estate property tax hike for families and children who inherit properties.
Under Prop 19, many families – particularly African Americans and Latinx – who have fought long and hard to acquire and hold on to their family properties in the Bay Area, may face a tough choice: Either pay a huge tax increase or be forced to sell the family property!
Now, you might be wondering, “What options do we have as a family to plan and prepare for Prop 19 in order to protect our family property?” As a start, I’d suggest you immediately contact your city and county Assessor’s Office for a greater understanding about real estate property tax assessments and the impact of Prop 19. In San Francisco, for example, go to https://sfassessor.org/Prop19.
You may wish to consult an estate and tax attorney or professional about your family’s property transfer options to avoid a property reassessment and tax increase, e.g., LLC, irrevocable trust, gift or sale. Definitely meet with your family members and community partners with urgency to plan for your special needs, goals and legacy. Finally, contact your legislative representatives to ask questions and voice your concerns.
Doesn’t it seem odd that such a crucial tax law was passed in November 2020 yet has remained under the radar? Isn’t it odd that such a crucial tax law was passed without an active public education campaign before implementation? Why is such a crucial tax law being implemented with such urgency, less than 120 days after being passed by voters, smack dab in the middle of a deadly pandemic and economic depression?
Businesses, schools, travel and socialization have all been placed on hold as a result of the virus. While we support victims of the firestorms, it should not be at the expense of our vulnerable communities. Therefore, Proposition 19 can and should be halted now!
We, the people, must have an opportunity to learn more, to challenge and overturn this vicious attack on the livelihood and economic future of so many. This is especially true for our Black and Brown families who are seeing the wealth gap widen and who are already disproportionately suffering from these current crises. Amen.
God-Mother Elizabeth Quida utilizes her high spirituality in service, advocacy and for uplifting the neediest in our society. She can be reached at GodMamas777@gmail.com.
