Orange County

AOA News and Buyers Guide • Orange County • March 2021 • (714) 539-6000 56 T he recent passage of Prop 19 eliminates the parent-child and grandparent-grand - child exclusion from reassessment for properties other than a “family home.” As of February 16, 2021, if you transfer your property to your children (or, grandchildren, if the parents are deceased), via any means (gifts, sale, hybrid, estate plan after your passing, etc.) that property will be reassessed to full market value for annual property tax purposes. Prior to Prop. 19’s passage, a parent could transfer the parent’s primary residence of unlimited value, and up to $1,000,000 of as - sessed value of other property - va - cation home, commercial property, rental properties, investment prop - erties and so on - to their children and such properties would retain the low adjusted base year value for property tax purposes, mean - ing that the property taxes would stay substantially the same after the transfer to children. Now, un - less both the parent and the child will use the property as his or her primary residence, the exclusion is terminated. Thus, children inheriting prop - erty from their parents (other than the primary residence), are very likely to see a substantial increase in property taxes on such inherited property. Your children will no longer inherit your “Prop 13 ba - sis” as had been California law for nearly 25 years. Many families fear that this tax increase, which can be quite substantial if a family has owned their property for a long time, will force the children to sell a family treasure or disassemble a real estate portfolio that took a lifetime to build. The exception to the new rules is if your heir(s) take a home as their primary residence, but even then, there’s a limit of up to one million dollars above the current assessed value. Anything beyond that is re-assessed and added to the tax basis. As such, even if a parent transfers his or her primary residence to their child who also uses it as a primary residence, by Mercedes Shaffer ADUs - One Way to Address Prop. 19's Inheritance Tax Basis Increase Building an ADU is one way that parents can offset the increased tax basis so that the kids aren't burdened by taxes that they may not be able to afford. DECKING Fiberglass & Magnesite New - Repair - Reseal Waterproof Coatings Lic #829170 • Balconies • Stairs • Iron Work • Rails • Patio & Pool Decks • Walkways Free Estimates Guaranteed Work ROA ANTONY 800-559-1590 FREE ESTIMATES WELDING Fences - Gates - Railings Step Replacement - General Repairs Ray Roohani’s Welding 714-717-6515 855-OC-WELDER (629-3533)

RkJQdWJsaXNoZXIy MjkxNzE=