Personal Finance & Estate › Income, gift, estate & real-estate taxes › Real-estate tax rules (depreciation, 1031, property tax)
Proposition 19 (parent–child transfer limits)
Effective Feb 2021· Tax rule
Watch outA common mistake, trap or scam.
A 2020 California ballot measure that ended most parent-to-child property-tax breaks, except for a family home the child moves into.
See it on the Personal Finance & Estate map →How it works
Before 2021, parents could pass a home of any value plus up to $1 million of assessed value in other property, such as rentals, to children without reassessment. Since February 16, 2021, only the family home (or farm) qualifies; a home only if a child makes it their primary residence within a year, and only up to the old taxable value plus about $1 million, indexed. Other property is reassessed to market value. Owners 55 and older may move their tax base statewide.
Why it matters for you
For heirs of a long-held rental or commercial building, reassessment can multiply the property-tax bill. Buildings held in an LLC follow separate entity rules, a question for an attorney.
Red flags and protection
California Constitution art. XIII A, sec. 2.1; passed November 2020 with about 51% of the vote. Board of Equalization letters to assessors and county claim forms explain how it is applied.
Watch out for
How assessors treat trusts, partial transfers and entity interests is still being worked out; proposals to restore the old break surface periodically.
Connections (3)
▸Proposition 19 (parent–child transfer limits) narrowed family breaks in Real-estate tax rules (depreciation, 1031, property tax)Watch out
How they connect
Prop 19 rewrote a major family exception in California property tax. Children inheriting a rental, commercial building or vacation home now take a market-value assessment, and even the family home keeps its low tax base only if a child moves in, up to an inflation-adjusted cap.
When it applies
California voters approved it in November 2020; the parent-child rules took effect February 16, 2021, applied by the 58 county assessors.
How sure?
California Constitution art. XIII A, sec. 2.1; Board of Equalization guidance and county reassessment records document the change.
Watch out for
Its long-run effect on family ownership, housing turnover and local revenue is still being measured.
▸Transfer-on-death & payable-on-death (incl. CA TOD deed) can still trigger reassessment under Proposition 19 (parent–child transfer limits)Watch out
How they connect
A TOD deed avoids probate, but the transfer at death is still a change in ownership for property tax. Under Prop 19, a child keeps a parent's low Prop 13 value only on a family home the child moves into, and only up to about $1 million of added value. Rentals and commercial buildings are reassessed to market.
When it applies
Applies to transfers since February 16, 2021, when Prop 19 replaced the broader Prop 58 parent-child exclusion.
How sure?
California Constitution Article XIII A as amended by Prop 19; Revenue and Taxation Code Sec. 63.2; county assessors' BOE-19-P claim forms.
Watch out for
Families debate transferring during life, at death, or through an LLC; each carries different Prop 19, Prop 13 and basis costs. Check with an attorney and the assessor first.
▸Proposition 19 (parent–child transfer limits) rewrote inheritance rules of Proposition 13 (California property-tax cap)Law or rule (2026)
How they connect
Prop 13 holds assessed value at the purchase price plus at most 2% a year, resetting only on a change in ownership. Props 58 and 193 had exempted transfers to children and grandchildren; Prop 19 replaced them, so most inherited property now resets to market value.
When it applies
Prop 13 passed in June 1978, Prop 58 in 1986, Prop 193 in 1996 and Prop 19 in November 2020.
The rule
California Constitution art. XIII A, secs. 2 and 2.1; county assessor records show reassessments of inherited property.
Watch out for
Whether ending the inheritance break makes Prop 13 fairer or hurts long-held family property is debated; property in LLCs follows separate rules.