After Prop 19: A Tax Reset Time Bomb
As of February 16, 2021, Prop 19:
Limits the tax break to a parent’s primary residence
Only applies if the child moves in within one year
Reassesses all other properties at market value
If the heirs don’t move in or don’t move in fast enough, they lose protection.
Property taxes double or triple. Inherited homes and investment properties are often sold under pressure.
This change hits probate estates especially hard, where heirs are unprepared or out of state.
A Legal Workaround: Buy the Home from the Estate
Here’s a little-known strategy that still works:
If a child or family member buys the home from the estate and makes it their primary residence, they may qualify to retain the existing low tax base.
This is not a loophole. It’s part of the law:
The sale must happen before probate closes
The buyer must live in the home
The transfer must be properly recorded and documented
Used correctly, this can save thousands in annual property taxes.
Why Adding Kids to Title Can Backfire
Many parents add their children to the title while they are alive, hoping to “simplify” inheritance. But doing so can:
Trigger an immediate reassessment
Eliminate the step-up in cost basis
Lead to large capital gains taxes when the child sells
In most cases, the better option is:
Keep the title clean and solely in the parents’ name
Use a revocable living trust to direct ownership
Plan transfers based on estate and tax strategy, not fear
If You Own Multiple Properties or Are In Probate…
Prop 19 reshaped the rules. If you’re:
A trustee or executor
A parent planning to transfer real estate
A family member navigating a probate sale
You must understand how the law affects:
Your exit strategy
Your family’s inheritance plan
Your property tax and capital gains exposure
What I Do Differently
I don’t just help you list and sell.
I help you protect what you’ve built.
I work with sellers, trustees, and heirs to:
Preserve low property tax rates when possible
Avoid capital gains traps
Use estate planning and loan structure to create options
This is where real estate, taxes, and legacy intersect, and I treat it like it matters.
Schedule a Legacy & Tax Strategy Call, know what to ask your CPA and Tax consultant.
Book a Private Strategy Call
Let’s protect what you’ve built before it’s lost to paperwork or policy.
No pressure. No assumptions. Just clarity where most agents guess.
