Proposition 19 has ushered in a new era for San Diego property taxes, reshaping long-standing practices and introducing complexities in tax calculations and inheritance procedures. The passing of Proposition 19 in 2020 has significantly reshaped the landscape of property taxes in San Diego County.
California voters, in a narrow decision, approved Proposition 19, triggering amendments to the state constitution with implications about taxes. This legislation directly impacts San Diegans, altering the calculation of property taxes and introducing limitations on tax benefits related to inheritances.
Proposition 19 Restructures Property Tax Calculation in San Diego, California
Under the new law, individuals over the age of 55 gain the opportunity to maintain their original tax rate when selling and purchasing a new home. This provision allows for such transactions up to three times, aiming to provide financial flexibility for seniors in their housing choices.
While the law offers benefits to seniors, it simultaneously curtails property tax advantages associated with inheritances. San Diego County Assessor Jordan Marks emphasizes the critical changes, particularly in parent-to-child transfers. Previously considered a wealth-building tool for communities, this transfer method has undergone substantial modifications, impacting the ability of families to maintain their residences.
Marks highlights the parent-to-child transfer as a important element in preserving communities of interest. The inability to afford increased property taxes has led to the dispersal of these communities, contributing to gentrification. The consequences are far-reaching, affecting second homes, vacation properties, rental homes, and businesses.
New Tax Bills of up to $10,000 in San Diego
Under Proposition 19, retaining original property taxes (up to $1 million in value) is contingent upon inheriting the property from a parent or grandparent and making it the primary residence. If the property transitions into a rental, it undergoes reassessment, subjecting the owner to a new tax rate based on the property’s updated value.
Complicating matters further, individuals seeking to preserve the original tax rate must file the necessary paperwork with the county’s tax assessor’s office within one year of the family member’s passing. The urgency of this requirement poses challenges, especially in situations where families are grappling with emotional issues and uncertainties about property inheritance.
The repercussions of Proposition 19 are evident in the substantial spike in property tax bills. Marks cites cases where bills surged from $1,600 annually to an astonishing $10,000 due to the revised law. The assessor’s office has been inundated with inquiries from hundreds of San Diegans witnessing dramatic increases in their property tax obligations.
In response to the challenges posed by Proposition 19, the San Diego County Assessor’s Office has taken proactive steps to educate residents. Collaborating with mortuaries, they provide families with checklists to streamline the paperwork process, aiming to prevent sudden and substantial hikes in property tax bills. Additionally, the office has introduced the Navigating Loss Program, an online resource guiding family members through the intricate steps required during these challenging times.
The office launched a Navigating Loss Program that will walk family members through the process of what they need to do online regarding these new regulations.