Q: CA Prop 19: After parent-child transfer, if child uses home as principal res. for years, is it reassessed if he leaves?
I have a question about CA Prop 19 that I haven’t seen addressed anywhere yet, and was hoping someone from this Q&A forum might have an answer.
Prop 19 for the most part repeals Prop 58, which allowed parents to transfer a house to their children, without the house being reassessed for property tax purposes. The only exception Prop 19 allows is if the child uses the property as a principal residence within 1 year of the transfer (and the child files a Prop 19 exemption for this).
Assuming:
-Prop 19 passes
-Parent transfers house to adult child, who claims Prop 19 exemption upon transfer and moves in.
-Adult child lives in house (principal res) for at least 2-3+ years.
My question is:
Since the adult child has lived in the house for several years, using it as a principal residence, may he now leave the house, and perhaps rent it out, without it being reassessed for property tax purposes? Or will Prop 19 require a reassessment as soon as the adult child moves out?
A:
Congratulation, you sound like a tax pro and seek speculation on I believe a proposed new law. That may be tough one. Good luck. Zaher Fallahi, Esq, CPA (CA &D.C.).
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