GAINES GAZETTE
December 2020
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As we celebrate the Christmas season, I hope your household is blessed with peace, joy, and the love of family and friends. My favorite part of Christmas is reflecting on the birth of our Savior and all the blessings he has bestowed on us. This year, I count the opportunity to continue serving as your elected taxpayer advocate among my greatest blessings.
On behalf of the Gaines family, I wish you a very Merry Christmas and a Happy New Year!
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Impact of Proposition 19 on Property Taxes |
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In November, Californians passed Prop 19 with 51% of the vote. Many of my constituents have asked what this complex measure does and how will it impact property taxes.
Let’s start with some background. In 1986, California voters passed Prop 58, which added a property tax exclusion on inherited properties transferred or sold between parents and children. The exclusion is good for the principal residence (no value limit) and up to $1 million in property value for other real property (i.e., rental property, commercial property). In 1996, voters passed Prop 193, which essentially created the same exclusion for inherited properties passed from grandparents to grandchildren. Unfortunately, both of these propositions, which were considered extensions of Prop 13, have been largely eliminated under Prop 19.
The measure does offer a few benefits. It allows eligible homeowners to transfer their Prop 13 base year assessments to any county in the state to a higher-priced home, paying increased property taxes only on the difference between the sales price and the new purchase price, assuming those prices were the fair market value. Prop 19 also increases the number of times persons age 55 and older and disabled homeowners can use this transfer exclusion, from one to three.
Unfortunately, in this mixed-bag of a measure, the bad outweighs the good. For instance, beginning February 16, 2021, parents and grandparents will no longer be able to transfer property to their children or grandchildren (unless the property is used as the principal residence) without triggering a massive increase in property tax liability.
This means that individuals whose parents and grandparents worked their whole lives to pay off a home so they could leave something to their children or grandchildren may have to sell the home to pay taxes. It means that thousands of dollars a year will be taken away from families who are not wealthy but may have one small rental they could inherit from their parents. It means that when multiple children inherit a home, they may all have to live there to get the exclusion.
Prop 19 will hit 40,000 to 60,000 families each year with higher property taxes and, according to the Howard Jarvis Taxpayers Association, will result in a billion-dollar tax increase. This poorly crafted measure was the last thing Californians needed and, luckily, it is currently being challenged as an unlawful initiative on the basis that it violates California’s requirement that initiatives focus on a single subject. I will be sure to keep you posted as this challenge progresses.
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The Board’s November 17-18 meeting took place using a combination of livestream and teleconference technologies.
Over the course of two days, my colleagues and I covered numerous topics, including what impacts Proposition 19 will have on the BOE; activities of the Taxpayers’ Rights Advocate Office; discussion about amendments to the Board’s Governance Policy; guidance on best practices for holding remote assessment appeals board hearings; and the Workforce Planning Workgroup’s findings and recommendations for possible Board action at a future meeting.
We are proud as a Board to continue meeting our constitutional duties using various virtual platforms and remain committed to our mission to serve Californians through fair, effective, and efficient tax administration in support of state and local governments.
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Applications for the Property Tax Postponement
Program are now Available!
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Applications for the 2020-21 tax year are now available for the State Controller’s Property Tax Postponement Program, which allows homeowners who are seniors, blind, or have a disability to defer current-year property taxes on their principal residence if they meet certain criteria including 40 percent equity in the home and an annual household income of $45,000 or less.
For more information, please visit my Resources page.
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You're Invited to WALK California! |
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The California Department of Parks and Recreation has launched WALK California – a virtual walking initiative. Now through December 31, 2020, all Californians are invited to join the challenge and track their activity.
Whether you walk, hike, cycle, skate, or swim, WALK California is a great way to get outdoors, be active, and stay connected.
Tracking your progress is easy through the World Walking website or app. Register, join the WALK California group, and start tracking your activity today! WALK California is open to everyone, so invite your friends and family to join the challenge as we “Walk Together, While Apart.”
While opportunities to recreate together remain limited, we can still unite as a strong and healthy California. I look forward to walking (virtually) with all of you!
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As a Board Member, my number one priority is to advocate for taxpayers. I believe hardworking Californians deserve to have someone working on their behalf to streamline and promote efficiency in state government.
Should you need assistance with tax-related problems or have questions, visit my website for information on how to contact my office or email me directly anytime.
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Reminder: Property Taxes Due December 10, 2020
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