California’s Prop 19: What Homeowners Should Know

What is Prop 19, and how does it affect me as a California homeowner? How do you transfer your property tax base under Prop 19? What happens if my child inherits my property under Prop 19? Do all of California’s 58 counties handle Prop 19 the same way? What strategies can I use to keep my property taxes low as a homeowner in California under Prop 19?

By James L. Cunningham Jr., Esq.

California homeowners—let’s talk about Proposition 19. Passed in November 2020 and effective February 15, 2021, Prop 19 reshaped the state’s property tax rules. It brought some golden opportunities, but also some nasty surprises that can cost families thousands each year. Understanding how it works could mean the difference between keeping your property tax base or watching your taxes skyrocket overnight.

Prop 19 Benefits: How to Transfer Your Property Tax Base

If you’re 55 or older, severely disabled, or a victim of a natural disaster, Prop 19 lets you transfer your Prop 13 tax base up to three times anywhere in California.

To qualify, the home you’re leaving must be your primary residence and eligible for the homeowner’s exemption. The replacement home must also become your primary residence, and the two transactions—selling your old home and buying or building your new one—must happen within two years of each other. 

To do this, you need to file Form BOE-19-B (Claim for Transfer of Base Year Value) with the county assessor where your replacement home is located. You do this after both transactions are complete — meaning you’ve sold your old home and purchased or built the replacement. The law gives you up to three years from the purchase or completion of the replacement home to file the form.

Prop 19 Drawbacks: Parent-to-Child Transfer Exclusion Rules

Here’s where Prop 19 takes the axe. Before 2021, children could inherit virtually any real property—family home, rentals, vacation cabin—without reassessment. Not anymore.

A change in ownership (CIO) triggers a property tax reassessment, often costing families thousands of dollars a year. It can easily turn a $3,700 tax bill into a $12,500 tax bill. 

Before Prop 19, Proposition 58 allowed parents to transfer property to children without reassessment. Now, because of Prop 19, only the family home (or family farm) can qualify to avoid reassessment, and even then, there’s a catch:

• The child must move in within one year.
• Stays under the exclusion cap (which changes every year).
• Fail the timing or documentation and you’re getting reassessed.

Example: Jane inherits her mother’s Los Angeles home, assessed at $263,000 but worth $1.2M. If Jane moves in within a year, she keeps Mom’s tax base—around $3,300 annually. If she doesn’t? Her bill jumps to roughly $15,000 a year 

The Prop 19 exclusion cap was originally set at $1,000,000 and is now indexed for inflation. For transfers through February 15, 2025, the cap is $1,022,600; for February 2025–2027, it jumps to $1,044,586. 

Prop 19 Reassessment Traps: Common Mistakes to Avoid

The number one trap under California property tax law is the dreaded “change in ownership” (CIO). A Change in Ownership can happen when property is sold, gifted, inherited, or even when there’s a change in control of an LLC. 

And once that reassessment is triggered? Your low Prop 13 tax base gets wiped out, replaced by taxes based on current market value.

Buying Out Siblings Under Prop 19 the Wrong Way

One of the most heartbreaking pitfalls happens during inheritance. Let’s say you and your sibling inherit Mom’s home, assessed at $300,000 but worth $1.5 million. You decide to buy out your sibling’s half. Unless it’s done correctly, that buyout can trigger reassessment on their portion of the property—meaning a partial, but still painful, tax increase. Done wrong, you could suddenly be paying thousands more each year. Done right, you may preserve much of the low Prop 13 base. This is where smart estate planning strategy makes all the difference.

Co-Ownership and Prop 19: Why Multiple Heirs Face Property Tax Trouble

What if multiple children inherit one property? It almost always leads to family drama. Maybe one child wants to move in, another wants to rent it, and another just wants to cash out. Prop 19 requires that someone eligible actually moves in within one year to keep the exclusion. If no one qualifies or deadlines are missed, the home is reassessed at full market value. That can increase property taxes tenfold, often forcing a sale of the family home.

County-by-County Prop 19 Differences

California has 58 counties, and while Prop 19 is a state law, each county assessor seems to have their own playbook. Some counties are flexible, others are sticklers. One county might accept two documents to prove residency; another might demand five. Some charge $175 to process forms, while others don’t. If your paperwork isn’t perfect—or you miss a deadline—you may lose your chance at relief. And don’t expect a friendly reminder letter in the mail.

Why DIY Prop 19 Planning Fails

The internet is full of DIY forms and “helpful” advice, but Prop 19 is not a do-it-yourself project. Misunderstand a deadline, fill out the wrong form, or structure a transaction incorrectly, and the cost could be tens of thousands of dollars annually, for decades. Realtors, CPAs, or well-meaning relatives often don’t understand the nuances. This is complex property tax and estate law—it’s the core of what we do at CunninghamLegal.

Real Examples of Prop 19 Reassessment from California Homes

To make this real, let’s look at a few examples using homes we found on Zillow that recently sold. These are not made-up numbers—they’re current California properties that were reassessed under Prop 19.

Example 1: Los Angeles Bungalow (built in 1925)
Current Assessed Value: $35,000
Current Taxes: About $624 per year
Market Value (Zillow): $850,000
If this property is transferred after the owner’s death or gifted to a child without meeting Prop 19’s strict requirements, the County Assessor will reassess it. Property taxes would then jump to about $10,477 annually. That’s a 16-fold increase—enough to shock most families into selling the home.