Property Tax Transfers

Prop 19 makes homeowners who are over 55 (or who meet other qualifications) eligible for property tax savings when they move, and restricts tax savings for inherited properties to those used as primary homes or farms.

These clauses forge a bargain over 1978’s Prop 13 and extensions thereof. Prop 13 caps annual increases to property taxes at two percent. This has amounted to often-enormous incumbency discounts on property taxes and starved local governments of funds. It was then expanded several times:

• 1978 Prop 8 allowed for reassessments in a declining market
• 1986 Prop 58 allowed parents to transfer their low property tax assessments to children
• 1986 Prop 60 let homeowners over age 55 to keep their low property tax assessments when moving to a home of equal or lesser value in the same county
• 1988 Prop 90 extended 1986 Prop 60 to moves in other counties, given that county allows it
• 1996 Prop 193 extended 1986 Prop 58 by allowing grandparents to transfer their property to grandchildren whose parents have deceased

2018 Prop 5 attempted to expand Prop 60 (1986) and Prop 90 (1988) further, by allowing seniors to take their property tax discounts anywhere in the state. I voted against this expansion of the unjust Prop 13, which would have cost $1 billion per year in taxes.

Just before the 2018 election, the impact of Prop 13 inheritance also became more widely known, with a major LA Times story focusing on wealthy children paying next-to-no taxes on their inherited properties.

Prop 19 trades off the inequities of 2018 Prop 5 for the inequities of Prop 13 inheritance. I have no philosophical prior on whether Prop 13 portability or inheritance is worse, so I’ve relied on the California Legislative Analyst Office, which projected that the trade will generate hundreds of millions of dollars per year in net tax revenue. That seals the deal for me: it indicates that it weakens Prop 13 overall and provides more resources for local governments and schools when they need it most. Vote yes.