Proposition 193
Property Taxes Transfer of Title
- Amends State Constitution by not requiring new appraisal of real property upon purchase or transfer between grandparents and their grandchild, subject to certain conditions.
- Parents of grandchild must be deceased as of date of purchase or transfer.
- Purchase or transfer of principal residence does not qualify if grandchild already received a principal residence through previous purchase or transfer not requiring a new appraisal.
- $1,000,000 limit on purchases or transfers of real property not requiring new appraisals, includes purchases or transfers between grandparents and grandchild, as well as between parents and children.
The information below was provided by the California Journal.
Background: Proposition 13, approved by voters in 1978,
froze property tax rates at their 1975 levels and generally limited annual rate
increases to 2 percent. A new appraisal, based on current market rates, is
required when property is sold or transferred, which could result in a
substantial increase in taxes on a property whose market value has risen faster
than an average of 2 percent a year. There is an exemption to this reassessment
requirement for parents who sell or transfer ownership of their principal
residence and up to $1 million of other property to their children.
Proposal: This proposition generally would allow
grandparents to transfer real property to their grandchildren without
triggering a new appraisal of the property for tax purposes if the parents of
the grandchildren are deceased. This exemption from the reappraisal requirement
would not apply if the grandchild already has received a principal residence
through a previous purchase or transfer that was exempt from reappraisal. The
proposition places a $1 million limit on purchases or transfers qualifying for
this exemption; this limit would apply to transfers or purchases between
grandparents and grandchildren and between parents and children. According to
the state's legislative analyst, this change in the property tax law would
result in about a $1 million annual loss in property tax revenue to schools,
counties, cities and special districts, with the loss to schools made up by the
state's general fund. The changes proposed by this measure would apply to sales
or transfers occurring after March 26, 1996.
Arguments for: Proponents, including Assemblymen David
Knowles and Bill Hoge and Senator K. Maurice Johannessen, state that
Proposition 193 would fix a small but important problem with the current
property tax law that penalizes individuals who have lost both of their
parents. Allowing grandparents to provide for and safeguard the future welfare
of grandchildren in these circumstances by transferring real property without
triggering an automatic reassessment is just as proper as allowing parents to
do this, which current law permits.
Arguments against: Proposition 193 would only increase the
unfairness of the current property tax system by creating a special exemption
for a privileged few, according to Gary B. Wesley, a private attorney who often
opposes ballot measures. He argues that voters should be presented with a
comprehensive constitutional amendment to the system that would make it fairer
for everyone. He recommends periodically reassessing all business and
residential property, regardless of whether it changes hands, and lowering the
tax rate.
For additional information please see:
- Yes on 193
None submitted.
- No on 193
None submitted.
