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Prop 19 Answers

Jordan works for the county and answered questions about Prop 19 in this interview here:

https://www.facebook.com/SanDiegoUnionTribune/videos/4210256878986440

A few highlights:

If you transfer ownership to your kids by February 15th through a grantor trust or irrevocable trust, then they won’t be impacted when the new rule takes effect. Ask about your IRS step-up in basis though.

The county recorder’s office is closed on February 15th.

The county recorder’s office is closed for over-the-counter work due to the pandemic.

If you notarize your document by February 15th, they will accept it as long as you record it at the county recorder’s office within three years.

Call his cell phone during normal hours (his wife is a divorce attorney).

Link to 40-minute Interview

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Palm Trimming

A local fire this week showed how flammable a palm tree can be when not trimmed:

Cal Fire, Carlsbad FD & Police doing another great job – no homes damaged, and no injuries.  Two other fires were started nearby on the same day, and a homeless woman was arrested for arson.

Click here for more photos and video:

https://twitter.com/hashtag/parkfire?src=hashtag_click

Prop 19 – Will Trust Protect Reassessment?

Prop. 19 will reduce or eliminate some generous tax breaks that families get when property is transferred between parents and children. But it won’t change the rules for trusts themselves.

Some transfers are exempt from reassessment. Transfers between spouses are always exempt.

Another exclusion applies to transfers between parents and children, and between grandparents and grandchildren if the parents are not alive. For simplicity, we’ll assume here the transfer is from parents to children, but it also works in reverse.

Under current law, parents can transfer — by sale, gift or inheritance — their primary residence to their children and it won’t be reassessed, no matter how much it’s worth or how the kids use it.

In addition to a primary home, each parent can transfer “other property” — such as a vacation home, rental or commercial property — and exempt up to $1 million in assessed value (not market value).

Prop. 19 changes these rules on parent transfers that take place after Feb. 15 in the following ways:

  • It abolishes the exemption on “other property.”
  • It preserves the exemption on primary residences, but only if the child also uses the home as a primary residence and to the extent the difference between the home’s assessed value and market value does not exceed $1 million (indexed for inflation)
  • If it does exceed $1 million, it will be partially reassessed, but not to full market value. If the child does not use the home as a primary residence, it will be reassessed at market value.

Prop. 19 is not retroactive and won’t apply to any property until it is transferred (or deemed transferred) after Feb. 15.

(more…)

Will Prop 19 Increase Inventory?

The U-T asked their twelve real estate experts about the effects of Prop 19:

Q: Will Prop. 19 substantially increase home inventory in California?

Of the local experts, 11 out of 12 said NO, and the justification for the one YES answer could have been just as easily been reasons to say NO.  Gary’s answer above was the best and most-accurate. See the rest here:

Link to Article

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Prop 19 is Ahead

I thought that Prop 19 would get lumped together with Prop 15 and cause voters to consider them both to be a change/threat to the original Prop-13.

Though Prop 15 is losing, it appears that Prop 19 has passed:

California Proposition 19

(100% reporting)

YES: 51.5%

NO: 48.5%

If passed, the initiative goes into effect on April 1st, so we should see seniors start to list their homes for sale in March.  Look out for those tens of thousands of housing opportunities!

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