Under Proposition 19, a parent transfers their primary residence—assessed (Prop 13 base year) value of $300,000 and current market value of $900,000—to their child, who moves into the home as their primary residence within one year of the transfer. Assuming the property qualifies for the parent-child exclusion, what will the property's new assessed value be for property tax purposes?
- A$900,000, because the property is fully reassessed to market value
- B$600,000, the average of the base year and market values
- C$300,000, because the base year value transfers to the child unchanged since market value does not exceed the exclusion threshold
- D$1,000,000, the standard exclusion amount added to the base year value
Show answer & explanationAnswer & explanation
Correct answer: C. $300,000, because the base year value transfers to the child unchanged since market value does not exceed the exclusion threshold
Proposition 19 allows a parent-child transfer of a primary residence to retain the parent's Prop 13 base year value if the child makes it their primary residence within one year, as long as the market value does not exceed the factored base year value plus $1,000,000. Since $900,000 is below $300,000 + $1,000,000, no reassessment occurs and the base year value of $300,000 carries over.
Why the other options are wrong
- A. Full reassessment would occur only if the exclusion did not apply or the value exceeded the threshold.
- B. Averaging is not how Prop 19 calculates assessed value.
- D. The $1,000,000 figure is an exclusion threshold added to the base year, not the new assessed value itself.
Prop 19 Parent-Child Exclusion
Proposition 19 allows a parent's primary residence to pass to a child with the Prop 13 base year value preserved, if the child uses it as their primary residence within one year and value stays under the exclusion cap.
- Effective February 16, 2021, replacing older unlimited parent-child exclusion
- Exclusion cap: factored base year value + $1,000,000
- Child must file for homeowner's exemption and reside within one year
Memory trick: Keep the family discount, but only under the million-dollar ceiling.