What are Prop 58 and Prop 193 and how do they work?
Proposition 58 allows a parent to transfer property to their children and maintain their very low Prop 13 basis. This can happen in a couple of different situations. The parent can transfer their property to their child while they’re alive, or it can be transferred through a trust or through their estate after they pass away. We recently helped a client sell his property to his son, and his son was able to take his parents’ very low Proposition 13 basis – saving them a ton on property taxes!
Prop 193 essentially does the same thing, except for grandparent-grandchild transfers. The only difference is, if the parent of the grand-child is still alive, this exemption doesn’t work. We once had a client learn this the hard way. They came to us after they had transferred their property to their child and grandchild. Unfortunately they ended up getting reassessed on the portion of their home that they transferred to their grandchild, because the grandchild’s parent was still alive.
If you’d like to know more about these propositions, here is a link to the Board of Equalization’s website: http://www.boe.ca.gov/proptaxes/faqs/propositions58.htm
If you have any other real estate needs, feel free to give me a call or send me an email.
I’d be happy to help you.