Prop 19 and Inherited Homes: When Keeping Mom's House Means a Higher Property Tax Bill
For years, California families could pass a home to their children and keep the parents' low Prop 13 property tax base, sometimes a few thousand dollars a year on a home now worth $2 million.
Prop 19, effective February 16, 2021, changed that. Today, many inherited homes are reassessed at current market value. In Santa Monica, where many longtime owners bought decades ago, that can mean property taxes going from a few thousand dollars a year to $20,000 or more.
Who Still Qualifies for the Parent-Child Exclusion?
A child (or, in some cases, a grandchild) can keep all or part of the parent's tax base only if:
The home was the parent's primary residence
The child moves in as their own primary residence within one year
The child files for the homeowners' exemption within one year
The child files the Prop 19 exclusion claim with the County Assessor
The Value Cap
Even if you qualify, the exclusion is capped. The protected amount is the parent's taxable value plus about $1 million. For transfers between February 16, 2025 and February 15, 2027, that figure is $1,044,586. Any market value above that limit gets added to the new tax base.
Example: A parent's home in Santa Monica has a taxable value of $300,000 and a market value of $2,000,000. The child's new taxable value is roughly $2,000,000 − ($300,000 + $1,044,586) + $300,000 = about $955,000. That's still more than three times the parent's tax base.
What Gets Reassessed Completely?
Rental properties inherited from parents
Second homes and vacation homes
The family home, if no child moves in within one year
What This Means for Your Decision
Prop 19 is often the deciding factor in whether heirs keep, rent, or sell an inherited home. Before you decide, compare:
The new estimated property tax bill
Potential rental income vs. costs
The stepped-up tax basis, which can reduce capital gains if you sell
What the home would sell for today
This article is for general information and isn't tax or legal advice. Please consult a CPA or estate attorney and the Los Angeles County Assessor.
Inherited a Home in Santa Monica or Anywhere in Los Angeles County?
I'm Uriel Resendiz, a listing agent with Park Regency Realty specializing in trust, probate, and inherited properties. I'll give you an accurate market valuation so you and your advisors can calculate your Prop 19 impact and decide whether to keep or sell. I serve Santa Monica, West Hills, Northridge, the entire San Fernando Valley, and all of Los Angeles County.
Call or text 818.940.5530 or visit sfvlisted.com for your free inherited home valuation.
Uriel Resendiz | Park Regency Realty | CA DRE #02198394
