***You must act now, before February 16, 2021 to mitigate or avoid property tax increases before Prop 19 takes effect.***
Prop 19 does not take effect until February 16, 2021. The good news is that there are planning opportunities available to transfer assets before February 16, but you must act fast!
If you own a property that has a high fair market value and currently low property tax assessed value, you will want to consider planning for that property before February 16, 2021. By doing your tax planning before then, you might be able to save your children substantial property tax increases in the future. If you wait until after February 16, 2021, it will be too late.
This is not something you want to do without proper planning, however, as there are significant gift tax, estate tax, and capital gains tax considerations anytime you transfer real property. We have specialized trusts that can lock in the property tax rate while also avoiding capital gains taxes down the road.
If you have a second home, rental real estate, or commercial property, you should seriously consider the transfer of those properties to trusts for your children now. You can transfer up to one million of property at its taxable value (the value shown on the property tax roll) to trusts for your children without reassessment.
Contact us as soon as possible at 949.718.0420 to schedule a time to discuss whether planning for Prop 19 makes sense for your family. Remember, we must have your planning completed by February 16, 2021, so call right away to get started.
Laura and Josh