As a long-time reader, first-time writer in The Downey Patriot, I want to briefly introduce myself and my office. 

As the LA County Assessor, I am one of three Countywide elected officials - the other two being better known than me - the Sheriff and the District Attorney. I oversee the largest local assessment agency in the US, responsible for valuing over 2.5 million real property and business assessments, which in 2020 were valued at $1.77 trillion and generating about $17 billion in property taxes. 

I am looking forward to sharing regular information with you on issues important to the residents of Downey and surrounding areas; here is my first; Proposition 19. 

Proposition 19 was approved by California voters in the November 3rd election and makes significant changes to the California Constitution regarding property tax benefits. While Prop 19 expands property tax benefits for seniors and the severely disabled, other provisions, which have already gone into effect, may have negative impacts on families who intend to pass-down property to their children or grandchildren.

Unfortunately, Prop. 19 was hastily drafted at the end of the legislative session and there are numerous deficiencies and ambiguities that will make the implementation of this measure challenging for government administrators, including County Assessors and the Board of Equalization. I am working closely with the 57 other Assessors statewide to provide clarity and guidance to the public, but there remain numerous issues that will require legislative interpretation and direction.

There are two primary components to Prop. 19. First, it allows homeowners who are over 55, disabled, or victims of natural disasters to transfer their property tax base with them when they sell their home and purchase a new one anywhere within the state. They can also transfer that tax base to a home of greater value. Under the previous law (Prop’s 60/90), eligible homeowners could only transfer their property tax rate to a home of equal or lesser value and only in a limited number of counties. Additionally, these homeowners can now transfer their property tax assessment up to three times, whereas previous law only allowed them to transfer it once. This part of Prop. 19 will go into effect on April 1st, 2021.

The second component of Prop. 19 deals with intergenerational transfers of property; that is, transfers between parents and children and grandparents and their grandchildren. This provision was not widely known and has raised numerous concerns from property owners who had plans to leave their real estate assets to their children. This component went into effect on February 16th. 

Prop. 19 imposes new limits on the intergenerational transfer of the assessed value of the family property. Under the previous law, parents (and sometimes grandparents) could transfer their primary residence, of any value, to their children and the assessed value for tax purposes would remain unchanged, even if, for example, the children chose not to live in the property and use it as a rental property. For many middle-class families, this gave them the ability to transfer those assets and provide for a transfer of generational wealth that established a stronger financial foundation for their heirs. 

However, to be eligible under Prop. 19, the property to be inherited must be the primary residence of the parent, and the child inheriting the property must make the home their primary residence within one year of the transfer in order to avoid a reassessment. Also under the previous law, a parent could leave up to an additional $1 million in real estate to their children without that property being reassessed, such as a rental property or commercial building, but this has been repealed under Prop. 19.

Additionally, under Prop. 19, the inherited base-year assessed value may be subject to an increase in property taxes for the children inheriting the property, even if the child moves into the family home. 

All of this can understandably be very confusing for families who are trying to understand the myriad ways Prop. 19 could impact them. I am working with the California State Board of Equalization, the California Assessors’ Association, and state legislators to put forth legislation that will address some of the major issues that require clarification. I encourage you to subscribe to my newsletter to get updates, and check out my website for more information. 

I am committed to ensuring that this voter-enacted Constitutional amendment is administered fairly and equitably. Until enabling legislation is adopted, there will be uncertainty and confusion for many property owners who are looking to take advantage of the benefits of Prop. 19, and very likely frustration by others who had hoped to more easily transfer their property to their children or grandchildren. Learn more at assessor.lacounty.gov/prop19.

Los Angeles County Assessor Jeff Prang has been in office since 2014. Upon taking office, Prang implemented sweeping reforms to ensure that the strictest ethical guidelines rooted in fairness, accuracy and integrity would be adhered to in his office, which is the largest office of its kind in the nation with 1,200 employees and provides the foundation for a property tax system that generates $17 billion annually.