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.
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:
We can expect that the government entities will be trying to jam affordable housing into every possible nook and cranny from now on. The idea of redeveloping larger areas, like Kearny Mesa, and include a nice compliment of affordable housing into an overall plan to uplift an entire area makes more sense to me:
Let’s continue to watch how the quaint old beach town of Carlsbad is being redeveloped by big money and a laissez-faire city council – so far, it looks like a grab-bag (an assortment of miscellaneous items):
Bill and I were talking about Prop 19 yesterday, and we both agreed it doesn’t seem to have much chance of passing because the California Association of Realtors, the authors of the initiative, haven’t been pushing a clear case of why it is important. The C.A.R. has every realtors’ email address, yet I had not seen much effort to even convince us, let alone the public.
Literally minutes after I said that, an email comes from C.A.R. with their latest TV ads. Both feature the same wildfire victim and are remarkably similar:
Let’s note that if it does pass, the start date is April 1, 2021. If wildfire victims and baby-boomers rush to replace their old home and take their ultra-low tax basis with them, it would add more to the Frenzy of 2021. But I am skeptical that many boomers will decide to move just because of this initiative. The other reasons to move play a bigger part (grandkids, cash-out, more suitable house, etc.) and taking the old tax basis will just be a sweetener.
There is a limit of adding up to $1 million to the old tax basis too.
CARLSBAD — The city finalized its policy regarding accessory dwelling units to reflect changes in state law.
During its Sept. 1 meeting, the City Council approved amendments to the zoning and municipal codes, in addition to the Village and Barrio Master Plan and Local Coastal Program.
The changes to the city’s municipal code align with six new state laws aiming to spur construction of ADUs, or “granny flats,” and create more affordable housing options for residents.
Don Neu, Carlsbad city planner, said ADUs are secondary residential units on an existing property and the city’s recent approval is keeping in line with the new state laws.
The latest California laws (AB 68, AB 881, SB 13, AB 587, AB 670 and AB 671) allow for ADUs on any lot with single-family or multi-family dwellings to include junior ADUs — units within the walls of a single-family home with a maximum size of 500-square feet — along with ADUs, which are detached units up to 1,200-square feet.
Other changes include setbacks, heights, lot coverage allowing for 800-square-foot units and prohibiting ADUs being used as short-term rentals, Neu said. Also, homeowner’s associations must allow both types of ADUs and state-mandated Housing Elements must include incentives for ADUs, Neu said.
“The processing time to act on a permit request for an accessory unit has been reduced from 120 days to 60 days,” Neu said.
The council also approved the attached ADUs to be 50% of the main dwelling or a maximum of 1,200-square feet, whichever is less. For detached units, 1,200-square feet is the maximum, which is in line with state law, Neu said.
These new guidelines also regulate height limits, which are 16 feet for both detached and attached units, and the city will default to the height allowed by the current zoning. As for landscaping, city ADUs must apply the same requirements as applied to the development of the property, while the architecture must be consistent with the main dwelling.
As of Nov. 2019, Neu said there were 425 ADUs in the city with rent running between $1,416 for a studio and $1,618 per month for a one-bedroom unit. Of the 425, there are 184 that are deed-restricted for lower-income residents and the rest are counted as affordable to moderate-income households.
“These were accessory units that were constructed to satisfy the inclusionary ordinance,” he said.
According to the staff report, the new state law also includes a requirement for the California Department of Housing and Community Development to review the city’s accessory dwelling unit ordinance for compliance.
The city will be given 30 days to respond and indicate if it will either change the ordinance to comply with the state housing department’s findings or adopt it as-is. If no response is made within 30 days, the state may notify the attorney general the city is in violation of state law.
For a city that has $100 million-plus in the bank and paid $16 million in 2001 for the Farmers Insurance building that still sits vacant, spending $3 million on this must be seen as pennies?
CARLSBAD — Questions about safety, costs and the possibility of flooding appear to have stalled plans to dig a pedestrian tunnel beneath Carlsbad Boulevard to connect the Tamarack State Beach parking lot with trails along Agua Hedionda Lagoon.
The Carlsbad City Council agreed last week to proceed to the next stage of work on a proposal to build two access ramps to the beach, but they decided to hold off on the $3 million tunnel portion of the project until they have more information about other options.
Councilwoman Cori Schumacher said she was “uncomfortable” with the tunnel. Over the years, it could be affected by storms and sea-level rise, she said, and she asked whether a road-level pedestrian crossing would require less long-term maintenance.
Other council members also had questions about including the tunnel in the beach access project.
“My main concern is the maintenance,” said Councilman Keith Blackburn, who asked about lighting, public safety, graffiti and trash in the passageway.
Your only real power as a service professional is your ability to withhold your services by saying 'No' to poor fits. The client will go with someone else when they're focused purely on price, but they will lose out on your creativity and professionalism.
House prices rose 19.8% Y/Y in August- same as the previous month & the first time the Y/Y gain hasn’t increased since early 2020. House price growth will likely slow as rising rates cut into affordability, but don't expect price declines b/c the supply-demand imbalance persists.
Jim the Realtor is legit - I interviewed three brokers; he said list price should be $100,000 higher than the other two brokers; listed it with him and had all cash (no financing) offer in two days, five day contingency period, closing in two weeks - and it closed at his recommended list price. I could not recommend anyone more than I recommend Jim the Realtor.
When we moved to San Diego in 2005 we rented a big house on Mt. Soledad (La Jolla) with 180 degree ocean views for the same payment as a mortgage on a dump in Chula Vista. Clearly something was wrong. Yet, the media was full of the usual happy-talk nonsense, so I was glad to find Jim's blog. I've followed his honest assessments and data since.
We decided to sell and move to AZ at Thanksgiving. Dec. 1st we met with Jim to sell our home. We closed today (29 days later). Jim orchestrated a feeding frenzy -- we had 25 showings in 2-1/2 days, multiple offers, and sold for well over asking price. I'd say he earned his commission! We have owned and sold homes in 5 different States always using experienced, productive, full-time realtors. Jim outshines them all.
You don't decide to sell and close 29 days later over Christmas (with COVID lockdown) without some miracles. Donna was amazing at performing lots of those miracles and ensuring that everything was done right and on time. They are a terrific team with a very responsive and professional network.
Where do we begin..2020 has been a year for everyone. When COVID hit and shut down both my husband and my businesses, we were left with a mortgage and very little income coming in. We were stressed, scared and felt stuck. We made the hard decision to sell our home and move out of state. We contacted the Klinges' and spent a good hour going over what we hoped we could accomplish. Jim and Donna came over with comps in hand and suggestions on improvements to get our house ready for the market. It was overwhelming to think about, but Donna was there and one step ahead in every scenario. Basically we just approved what they suggested and Donna handled literally everything. We placed our house on the market and within the first day we had multiple offers well above asking price! We couldn't believe it. We were overjoyed! Jim countered the offers to weed through them, and everyone came back with way more. It was amazing, and we are ?? sure it was because of the staging and repairs the Klinges suggested we do.
Due to unforeseen dishonesty from the buyers lender, we hit a big hurdle when trying to close. We had already moved out of state and were shocked when three days before closing the lender dropped a bombshell on the buyers and us. However, Jim and Donna handled it like veterans, not afraid to play hard ball and represent their clients. After a few phone calls with us, and several between Donna and the lender, they had a plan B-Z to make sure we were taken care of. In the end we closed with even more money than we ever thought possible and with very little work from us. The Klinges handled this entire "2020" worthy event with the utmost professionalism and did everything in their power to not only make this as smooth as possible for us, but we also walked away with more money from the sale of the house than we ever hoped for. After working with Jim and Donna, you don't ever use anyone else. They are hands down the best team to represent you in any scenario.
Working with Klinge Realty Group was a great experience! They are very responsive, professional and knowledgable about the real estate market! I would definitely recommend Klinge Realty Group.
Jim and Donna Klinge made the sale of our condo extraordinarily easy. They know the market and gave us sound advice backed by details and very considerable experience, reflected both in the initial pricing and subsequent negotiations. They work together as a team and are always available to talk. We had a few challenges with our property and they were able to coordinate the resolution to everything, including items that I would not think would ordinarily be their responsibility to handle. They made the whole process effortless on our part. They are folks with high integrity and we cannot recommend them highly enough.
Review for Member: Donna Klinge
I cannot believe there are no reviews of Donna yet, ugh!! She is the secret sauce of the Jim Klinge/Donna Klinge combo! I will touch on Jim here, but Donna is why I'm so totally loyal to these two (no offense to Jim :)).
I consider myself a rather savvy buyer/seller. I've bought/sold 7 times in about 15 years. On the buy side, Jim is the PERFECT combo of: completely digitally savvy (he will pull data all day long until you feel comfortable with your chosen house, area, school district, anticipated appreciation rate...anything!), he's super well respected and known in the area by other agents, an amazingly cool but strategic negotiator, is totally devoid of desperation for a sale/commission, and more.
Then once you get into contract phase, Donna literally handles every last and final detail in a concierge-like manner -- totally shielding you from the daily back and forth, noodling and annoyances of the buyer's requests. She solves it ALL; it's miraculous what that woman accomplishes over and above what is even expected in a buy/sell transaction.
On the sell side, Jim and Donna do the same, but even moreso. Donna in particular truly takes everything off your plate: she'll manage getting the house painted, the carpets replaced, she'll go on site (as she Jim both did for me when selling our rental properties) to work with the renters and make sure the house is ready to show -- freeing me to have to take time off of work to do so. They work with A+ integrity, too, so you know you are serving all parties fairly and lawfully throughout.
A home purchase/sale is the most considered you'll ever make. HIRE A SAVVY AGENT, not a friend!, and get what you need out of the transaction. Jim and Donna are our agents for life.
Jim and Donna Klinge are by far the most professional, personable and responsive realtors I have ever worked with. They provide VIP concierge level service in every area of the process of selling your home. My home was marketed so successfully that we received an offer the day after our first and only open house. Thanks to Jim's pricing and negotiating, our house is now the highest sold in our community. Jim's vast experience means he has worked with several realtors and knows the market all over north county. Donna is AMAZING in processing everything in the transaction. She scheduled trades people to work on the house in preparation for the sale as well as the repairs needed before closing. She communicated clearly every step of the way about what would be happening. She took the weight off my shoulders for the whole process. I will always use Jim and Donna for my future real estate needs and I whole heartedly recommend them to anyone buying or selling a home.
Jim and the team at Klinge Reality are without a doubt the best in the business! Not only was Jim helpful and extremely knowledgeable, he was patient and determined to help me find my first home. Jim and his team have been in the business for many years, and it shows. Jim is a wealth of knowledge and was my biggest proponent despite the temperature of the competitive market. I ended up getting the perfect property in my dream neighborhood all thanks to Jim. From the day my offer was accepted, Donna was a real lifesaver. She was extremely helpful, responsive, and knowledgeable when it came to every minute detail, and held my hand through the process. As a first time home buyer I had no idea what the process would entail, but Donna curtailed every concern I came across and made the escrow process feel seamless. Jim and Donna provided me the best home buying experience, and I am very grateful for all they did for me. It was truly a pleasure to work with Jim and Donna and I am already looking forward to the next time we work together!
Review for Member: Richard Morgan
Richard is an amazing realtor! He has high integrity and genuinely cares about his clients and their needs. Richard paid close attention to what I was seeking in a home and was very patient in our search to find it. I would highly recommend Richard and will use him for future transactions. Truly a different kind of realtor experience!
Could not be happier with my experience with Jim and his team. He helped me sell a very unique and challenging property. Throughout the entire process he was always available, honest, transparent, trustworthy, and always put my interests as a seller first. A (rare) true professional! During close of escrow Jim went above and beyond to complete the deal. It would not have been possible without his experience, fantastic team, and pure dedication. Highly recommended!
Thanks Jim and Donna Klinge!