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California Proposition 19, also known as the “death tax,” has sparked significant controversy and calls for repeal. Here are the critical points regarding Proposition 19 and the reasons behind the efforts to place an initiative on the November 2024 ballot to repeal it:

What Changed Under Proposition 19 (Prop 19):

  • Prop 19, passed in 2020, expanded property tax changes for Californians. It allows those 55 and older to carry their property tax rate if they move within the state [1].
  • It replaced older propositions like 58, 193, 60, and 90, ending the ability of parents to transfer their property tax basis to their children in many cases [5].
    1. Parent-Child Property Transfers under Proposition 19:

    • Under Proposition 19, effective February 16, 2021, property transfers between parents and children face stricter conditions. Before the transfer, both parents must have used the property as their principal residence, and the child must use it as their principal residence within a year of the transfer. If these conditions aren’t met, the property may be reassessed at current market value for property tax purposes [3][5].

    Example of a Transfer under Old Proposition vs. Proposition 19:

    • Under the old Proposition 13, a child inheriting their parent’s property could generally inherit the parent’s assessed property value, resulting in lower property taxes. Proposition 19 introduced stricter eligibility criteria, as mentioned above, potentially leading to higher property taxes for some transfers.

Why It’s Referred to as the “Death Tax”:

  • Proposition 19 is called the “death tax” due to its impact on inheritance taxes. It rolled back protections for individuals inheriting their parents’ homes, potentially increasing their property tax bills [3].

State Property Tax Revenue Increase Under Prop 19:

  • Prop 19 has resulted in an increase in property tax revenue for the state of California in 2023. However, the exact figures may vary and should be obtained from official sources or state reports.

Effect on Housing Inventory:

  • The impact of Proposition 19 on housing inventory is a subject of debate. Some argue that discouraging property sales and limiting supply may negatively affect affordable housing. Others may say it encourages seniors to downsize and frees up housing inventory, but this issue is contentious.

Efforts to repeal Proposition 19’s “death tax” reflect concerns about its implications for property taxes and housing affordability—the debate surrounding its repeal centers on its impact on Californians and the housing market.

How have the property taxes increased under proposition 19? Prop 19 tax chart

Information on Proposition 19:

  • Proposition 19 is “The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act.” It was passed in California on November 3, 2020 [1].
  • Proposition 19 changed property tax benefits for families, seniors, severely disabled persons, and wildfire victims [4].

Information on the Affordable Housing Crisis in California:

  • The high cost of housing in California has been causing significant financial stress for low-income households, making it challenging for them to afford housing [2].

Information on the Impact of Affordable Housing Shortage:

  • Research shows that the shortage of affordable housing in the United States, including California, costs the American economy approximately $2 trillion a year in lower wages and productivity [5].

Information on Death Taxes:

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