Prop. 19 allows transfers of a family home or family farm between parents and their children without causing a change in ownership for property tax purposes. It is an exclusion from change in ownership. The value limit is equal to the property’s taxable value at time of transfer plus $1 million, as adjusted every other year by an inflation factor.

In November 2020, California voters passed Proposition 19, which modifies Article XIIIA (aka Prop 13) of the California Constitution and significantly affects certain types of real property transfers. Children/grandchildren who inherit their parents' /grandparents' principal residence but choose not to make the home their principal residence will now have the property re-assessed at fair market value.

Due to the passing of Proposition 19, which changed the Intergenerational Exclusion rules for properties sold on or after February 16, 2021, the exclusion an applicant may qualify for will depend on when the property was transferred. If the property transfer occurred on or after February 16, 2021, the exclusion is limited to the first $1,000,000 of value that would be added upon reassessment of the principal residence.

Under Proposition 19, a child or children may keep the lower property tax base of the parent(s) only if the property is the principal residence of the parent(s) and the child or children use the property as their principal residence as well. Otherwise, the property is reassessed.

The Board of Equalization states: "Important Notice: Proposition 19 repealed the former parent-child and grandparent-grandchild exclusions that were added by Propositions 58 (1986) and 193 (1996) to the California Constitution." It explains that under the former law, these propositions "excluded from reassessment certain transfers of real property between parents and children and from grandparents to grandchildren" but that these exclusions were replaced by the narrower intergenerational transfer provisions enacted by Proposition 19, effective February 16, 2021. This confirms that the broad no‑reassessment rules for inherited property under Propositions 58 and 193 were removed and replaced by more limited rules.

This measure would add Section 2.1 to Article XIII A of the California Constitution to provide, among other things, that a transfer of a family home or family farm between parents and their children shall not be considered a purchase or change in ownership for purposes of property tax reassessment, if the property continues as the family home of the transferee. It also provides that, if the fair market value of the family home exceeds the sum of the existing taxable value plus the exclusion amount, the difference shall be added to the taxable value of the property, effectively causing a partial reassessment. Transfers not meeting these conditions are treated as changes in ownership and are fully reassessed at fair market value.

Proposition 19 repeals the existing parent-child and grandparent-grandchild exclusions under section 63.1 for transfers occurring on or after February 16, 2021, and replaces them with a narrower exclusion for intergenerational transfers of a family home or family farm. To qualify for the exclusion, the family home must have been the transferor's principal residence, and the transferee must claim the homeowners' or disabled veterans' exemption within one year of the transfer and occupy the property as their principal residence. If the fair market value of the family home exceeds the sum of the factored base year value and the exclusion amount, the difference is added to the factored base year value, resulting in a partial reassessment; if the conditions are not met, a full reassessment occurs.

The Alameda County Assessor describes Proposition 19 as follows: "In the November 3, 2020 general election, California voters passed Proposition 19, which makes changes to property tax benefits for families, seniors, severely disabled persons, and victims of natural disasters." It lists as change number 1: "Replace Proposition 58 and Proposition 193 by limiting parent-and-child transfer and grandparent-to-grandchild transfer exclusions – Effective 2/16/2021." In a Q&A, the Assessor notes: "Parent to Child/Grandchild transfers will be eliminated – your residential rentals will be reassessed at transfer to your children...; your family vacation home or cabin will be reassessed at transfer to your children." This shows that many inherited non‑principal‑residence properties are now subject to reassessment at current value.

Santa Cruz County notes that, after voters approved Proposition 19 in November 2020, "what is known as an ‘intergenerational transfer exclusion’" allows the taxable value of a property to remain the same for the transferee only "provided certain conditions are met." It cites Revenue and Taxation Code section 63.2, which implements Proposition 19, and explains that this exclusion applies only to a "family home or family farm" and that the transferee "must file for the homeowners' or disabled veterans' exemption on the residence within one year of the transfer." It makes clear that only qualifying transfers avoid reassessment; properties that do not meet these requirements are reassessed to market value when transferred.

Proposition 19 is a California constitutional amendment, approved by voters on November 3, 2020, that changed how inherited property is taxed for property tax purposes. The law, codified in Revenue and Taxation Code Section 63.2, took effect on February 16, 2021. Children can still inherit a parent's primary residence without full reassessment, but only if they move in and make it their own primary residence within one year.

Blacksburg Law explains that "Proposition 19, which started on February 16, 2021, changed how inherited properties are taxed in California" and that it "updated the rules for property tax reassessment, especially for properties passed from parents to children." The guide states that "inherited properties are now reassessed at market value unless certain conditions are met, often resulting in higher property taxes for heirs" and that Proposition 19 removed the prior broad parent‑child exclusion unless the child meets new requirements. It highlights a "primary residence requirement" under which heirs must make the inherited home their primary residence within one year and a "value limitation" under which only the first $1 million above the original assessed value is excluded, with partial reassessment beyond that. It emphasizes that vacation homes and rental properties "no longer qualify for any exclusions" and are "automatically reassessed at market value upon inheritance."

Prop 19 passed in November 2020 and took effect February 16, 2021. The short version: your children can no longer automatically inherit your low property tax base. The old rules that let families pass down homes, rentals, and vacation properties at a protected assessed value are largely gone.

Proposition 19 changed how property taxes work when homes are passed between generations. Children now keep their parents’ low property tax assessment only if they make the inherited home their primary residence. Even then, only up to a certain amount of the original assessed value is excluded from reassessment; any excess is taxed at current market rates. Vacation homes, rental properties, and investment real estate no longer qualify for the full exclusion and are generally reassessed at market value upon inheritance.

No, not all the children must move into the home under Proposition 19 to claim the parent-to-child reassessment exclusion. The BOE's website explains that only the transferee who will occupy the home as a principal residence must qualify, but the property must still meet the statutory requirements to avoid reassessment.

Proposition 19 replaced Prop 58's unlimited parent-child property tax exclusion with a narrower rule: the exclusion now applies only to a family home that the heir moves into within 1 year, and only up to a $1,044,586 cap above the parent's assessed value. Rental properties, vacation homes, and investment properties receive no exclusion at all: they are reassessed to full current market value when title transfers. If the home's fair market value at transfer is below the cap threshold, no reassessment occurs; if above, partial reassessment applies.

California Proposition 19, approved by voters in November 2020 and effective February 16, 2021, narrowed the parent-child exclusion. Inherited family homes can avoid reassessment only if the heir uses the property as a principal residence and files the required claim; other inherited real property is generally reassessed to fair market value.