It’s hard to imagine anything more callous than the government sending a giant tax bill to a bereaved family, but thanks to Proposition 19, many California families will have that unfortunate experience.

Prop. 19, which passed by a razor-thin margin in the November election, expanded a tax break for some homeowners but repealed an important taxpayer protection for families. The effective date of this change was February 16, before most Californians even knew what had happened.

Here’s what happened: homes that are transferred between parents and children are no longer excluded from reassessment. Previously, children would continue to pay the same property tax bill that their parents had paid, with increases in the assessed value capped by Prop. 13 at a maximum of 2% per year. Not anymore. Now children inheriting their parents’ home or other property will receive a new tax bill based on a current market-rate assessment.

There are only limited exclusions for a family farm and for a home that is the primary residence of the parents if the home becomes the primary residence of the child within one year. Otherwise, the home and any other properties such as small businesses or rental homes will be reassessed as of the date of transfer. The new annual tax bill will be 1% of the market value which will easily double or triple the property tax bills of most transferred properties.

Unfortunately, the costly advertising campaign pushing Proposition 19 never mentioned the loss of this “intergenerational transfer” protection and the fact that this happened to families in the midst of a pandemic made it difficult or impossible to get information from government employees or even to record documents. There was little time to consult an attorney or revise an estate plan before the February 16 deadline arrived.

As families discover the harm of Prop. 19, more and more people are contacting the Howard Jarvis Taxpayers Association and telling us that they want to see the exclusion from reassessment for parent-child transfers of property reinstated. We agree. We are urging lawmakers to support a legislative constitutional amendment that reverses the damaging part of Prop. 19 and restores the constitutional protections that it quietly removed.

HJTA is also sponsoring Senate Bill 668, authored by Sen. Patricia Bates, R-Laguna Niguel, to delay the effective date of this portion of Prop. 19 for two years, until February 16, 2023.

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