If someone has property that they were considering transferring to a child or a parent, they might want to do it before February 16 to avoid being reassessed at a higher value.
It appears that Proposition 19 has passed and it could affect many property owners in Amador County by substantially increasing the amount of property tax to be paid on properties that are transferred between parents and children. This new way of assessing will go into effect on February 16, 2021 and there may be time for people to transfer property without being reassessed at a higher value.
Prior to this proposition, all properties, up to $1 million of assessed value, could be transferred between children and their parents without being reassessed at a higher value. This new proposition will only allow primary residences and “certain farms” to be transferred between parents and children without being reassessed.
Other properties, such as commercial properties, second homes, multi-residential properties, vacant land, etc. will now have to be reassessed.
Here is an example:
• If parents have a second home, or a small business property that might be worth $400,000 that has an assessed value of $150,000, they could transfer it between children and parents before February 16 and be able to keep the lower assessment. If they transfer the same property on or after February 16, it would be assessed at $400,000, which would result in paying at least $2,500 per year more in property taxes for as long as they own the property.
What makes this so important to Amador County residents is the increasing value of the real estate market coupled with outside forces. It is not uncommon for someone to sell their house in the Bay Area for $1.2 million, or more, and then buy a nicer, larger home in Amador County for around $400,000. For that person, there appears to be a nice financial gain. For the Amador County resident transferring non-primary residences between parents and children, the result can be higher property tax expenses, without the benefit of a profit from a sale.
This proposition will need to be clarified and cleaned up before being administered, so some clarifications are still needed. Regardless, if you are planning to make changes with properties and are concerned about their assessments, there’s not a lot of time.
For assessment information, please visit the Assessor page on the county website (amadorgov.org) or contact the office at (209) 223-6351.
Jim Rooney is the Amador County Assessor.