CA Prop 13 Questions . . .

[Desert Whaler]

Looking for someone to speak with regarding some basic Prop 13 questions.
I know there's a strong brain trust on here . . . not looking to poach free legal advice . . . just needing to get pointed in the right direction and avoid the vultures.
Thanks in advance.

(edit) - it's for residential not commercial.

 

[jet496]

Proposition 13, adopted by California voters in 1978, mandates a property tax rate of one percent, requires that properties be assessed at market value at the time of sale, and allows assessments to rise by no more than 2 percent per year until the next sale. This means that as long as property values increase by more than 2 percent per year, homeowners gain from remaining in the same house because their taxes are lower than they would be on a different house of the same value. Proposition 13 thus gives rise to a lock-in effect for owner-occupiers that strengthens over time. It also affects the rental market, both directly because it applies to landlords and indirectly because it reduces the turnover of owner-occupied homes.

What do you need to know? It applies to both residential & commercial. When the property is sold it's reassessed at that value.

 

[DLC]

You used to be able to transfer the prop 13 status between parents kids
&
you could do a 1 time buy sell like for like property

 

[Mike Honcho]

There are a lot of dynamics to prop 13 and its subset prop 19 so I understand your looking to avoid vultures but to what context?

Maybe you can be a little more specific to your questions so we can determine if we can answer.
Would love to help but not sure on what your ?’s are.

 

[bocco]

Your Prop 13 property value can be inherited. I believe you can still transfer your basis as long as the new property is less.

 

[boatpi]

And always remember the 3% per year increase. Clock is always ticking even if the value goes down on the home, the assessed value, such as dinner a recession that clock still ticks. So as an example if you don’t go up at all one year or even go down a percent or two during a bad economy , then can turn around the value of the home can increase and one you could be hit with six or even 10% the clock never stops.

 

[coolchange]

Prop 19 jacked up proposition 13. Inheritance to One heir Is completely different than to multiple heirs. Lots of changes. As said you need to get specific.

 

[Mike Honcho]

Prop 19 also dictates for you to inherit the same tax rate as a parent. It had to be their primary home and you have to state your living in it or you risk, reassessment and ridiculous taxes back to the date of death from the last parent.

 

[Mike Honcho]

Also, the vultures you referred to are they siblings? Are they the tax assessor this would help try to answer whatever your questions might be.

 

[Desert Whaler]

Our house / primary residence is under Prop 13. There is also a rental under Prop 13 as well . . . although not quite as old.
Pops has mentioned the idea of moving into the smaller rental and renting the 2 story.
He had heard about setting up something called a 'Family Property LLC' which may provide some tax benefits for myself down the road. ???
I know Prop 13 / 19 / 58 are complex and I understand the 'basics', but not much more.
Down the road, would I be able to retain the Prop 13 benefit of the 2-story, even ifI was living in the smaller house?
The vultures I was referring to would be paying for unscrupulous legal advice.

 

[X Hoser]

Our house / primary residence is under Prop 13. There is also a rental under Prop 13 as well . . . although not quite as old.
Pops has mentioned the idea of moving into the smaller rental and renting the 2 story.
He had heard about setting up something called a 'Family Property LLC' which may provide some tax benefits for myself down the road. ???
I know Prop 13 / 19 / 58 are complex and I understand the 'basics', but not much more.
Down the road, would I be able to retain the Prop 13 benefit of the 2-story, even ifI was living in the smaller house?
The vultures I was referring to would be paying for unscrupulous legal advice.

Also, read up on Proposition 60. In some cases you can transfer your current property tax to another property.

 

[Mike Honcho]

Our house / primary residence is under Prop 13. There is also a rental under Prop 13 as well . . . although not quite as old.
Pops has mentioned the idea of moving into the smaller rental and renting the 2 story.
He had heard about setting up something called a 'Family Property LLC' which may provide some tax benefits for myself down the road. ???
I know Prop 13 / 19 / 58 are complex and I understand the 'basics', but not much more.
Down the road, would I be able to retain the Prop 13 benefit of the 2-story, even ifI was living in the smaller house?
The vultures I was referring to would be paying for unscrupulous legal advice.

I lost my FIL in Jan 24 and we had an LLC wrapped in the trust and the rentals are what my wife inherited however she is not entitled to prop 13 or Prop 19 father to daughter transfer due to it not listed as his prim residence. I am still waiting for the tax assessor to tell me what amount of a fat check I am gonna have to write. I was told directly from the tax assessor office that we will not qualify for any tax exemption from 13 or 19 even though we checked the box that it was inherited and passed from father to daughter.

Check your details or anything you have been told our family attorney stated we would qualify and then gave us the bs that prop 19 changed it and he wasn't aware of the new changes implemented by our fearless leader Grabin Newscum.



Good luck

 

[rivermobster]

Our house / primary residence is under Prop 13. There is also a rental under Prop 13 as well . . . although not quite as old.
Pops has mentioned the idea of moving into the smaller rental and renting the 2 story.
He had heard about setting up something called a 'Family Property LLC' which may provide some tax benefits for myself down the road. ???
I know Prop 13 / 19 / 58 are complex and I understand the 'basics', but not much more.
Down the road, would I be able to retain the Prop 13 benefit of the 2-story, even ifI was living in the smaller house?
The vultures I was referring to would be paying for unscrupulous legal advice.

This is the kinna question I would be asking ChatGPT about...

It can search Every source for info and give you the exact answer you need.

It doesn't seem to me that you need legal advice, but advise from whoever does your taxes, would probably help as well as ChatGPT.

 

[PlanB]

Prop 19 also dictates for you to inherit the same tax rate as a parent. It had to be their primary home and you have to state your living in it or you risk, reassessment and ridiculous taxes back to the date of death from the last parent.

You inherit the same base tax rate plus 1 million dollars. Anything over that value you are going to be taxed at the current tax rate (assuming you use it as your residence for at least two years). I am going through this right now with my mom's house.

 

[Smupser]

I sold my old house in 2019 and bought my dad’s house. Did a parent to child exclusion through san Diego county to absorb his property 13 status.

edit: I have a question. If I permit projects and I get reassessed for the improvements is my tax rate still capped at 2% per year????

 

[Desert Whaler]

I sold my old house in 2019 and bought my dad’s house. Did a parent to child exclusion through san Diego county to absorb his property 13 status.

edit: I have a question. If I permit projects and I get reassessed for the improvements is my tax rate still capped at 2% per year????

Good question . . . I'd just be guessing.
And knowing CA, I'm afraid to hear the answer.

Edit - i found this , not sure of the accuracy or validity. . . . "Only the improvements will be subject to reassessment, not the entire property".

 

[Caydens Cat]

Good question . . . I'd just be guessing.
And knowing CA, I'm afraid to hear the answer.

Edit - i found this , not sure of the accuracy or validity. . . . "Only the improvements will be subject to reassessment, not the entire property".

I’m not a tax expert; however, my understanding is the opposite. You’ll be taxed at current market value If permits are pulled. Somebody on here recently went through this with possibly adding an ADU. You loose the tax shelter.