Transferring A Parent’s Property Tax Rate & Prop 58 Loans

Transferring A Parent's Property Tax Rate & Prop 58 Loans

Transferring A Parent’s Property Tax Rate & Prop 58 Loans

This “parent to child exemption” has saved so many  beneficiaries, homeowners and commercial property owners, thousands  of dollars;  making it possible to put a few dollars away in the bank every year, with the ability to avoid property tax assessment… and transfer parents property taxes at a reasonably low base rate — having the right to keep parents property taxes at the low tax base they were accustomed to paying; i.e., inheriting property taxes that remain low.

Otherwise — very few middle class homeowners could afford to keep an inherited home. They’d have to sell out, given that most of these estate heirs or trust beneficiaries have their own home to maintain and pay taxes on! Or, beneficiaries can still go to a blog or Website that is deeply focused on Proposition 58 and Proposition 13, trust loans and estate property tax reduction like, for example  Property Tax Transfer Trusts.

Or you can conduct research on some other sites focused on Prop 58 and unique, consistently  effective uses of intra-family trusts as  trust loans, generally to buyout property shares owned by co-beneficiaries of the same estate or trust — along with locking in a low property tax base by avoiding CA property tax reassessment at current, typically  high market values, such as https://cloanc.com/tag/california-prop-58

Exactly why many of us think other states, particularly expensive  states, should be looking into property tax relief for all property tax transfer scenarios, involving property tax breaks like the parent to child transfer of inherited property, similar to tax breaks avoiding CA property tax reassessment at current market value. 

Realistic examples of high-tax states that desperately need property tax relief are, for example, states like Massachusetts, or New York, Texas, or Pennsylvania… States like this should all have a property tax exclusion or exemption to protect middle class homeowners  from property tax evaluation at current market rates… giving residential and commercial property owners the right to avoid property tax reassessment every year.  Establishing lower property taxes for all property owners, including landlords; which would  affect  apt. building and commercial store rentals all across any major state… thereby impacting the finances of middle class residents and commercial property owners in an extremely positive fashion.

The surprising reality in California is the fact that so many homeowners do not understand property tax transfer, nor do they understand the use of trust loans and trust lenders, when inheriting a property you want to keep, and need a trust loan to pay off beneficiaries who had insisted on selling their shares in the inherited property, to equalize cash for them in the process, so they don’t need to sell, often below fair value, to a third party.

People that do not understand any of this need to do a little research, on info blogs like this one; or on Websites that delve into Proposition 58, and how property tax transfers and trust loans work, such as the  Trust and Estate Loans Website… or at one of the transaction oriented sites like Commercial Loan Corp  This gives nervous  beneficiaries a great deal of accurate information to help them avoid estate conflicts with co-beneficiaries… typically siblings.  So for once, the inheritance and estate process becomes a win-win experience for all concerned! If you need assistance with a Trust or Estate Loan, you can reach Commercial Loan Corporation at 877-464-1066. They can assist you with the process and answer any questions you might have on the topic of Parent to Child Exclusion from Reassessment and transferring the property taxes from a parent to a child when a trust is involved. 

Parent to Child Transfer

Parent to child real estate transfer

Parent to child real estate transfer

It’s time we ask ourselves – exactly what kind of affect will CA Proposition 19 most likely have on California?

There is a lot more to this than meets the eye. As of June 6, 1978 California has been the one state in America with direct access to a low tax base model, becoming accustomed to the classic Prop 13 property tax cap… working in tandem with the 1986 Proposition 58 protected property tax transfer & parent to child exclusion, making it possible thanks to Proposition 58 for homeowners & commercial property owners  to avoid property tax reassessment at current market  rates.   Basically forever, as long as they retained the property they inherited. 

Proposition 19 has now cut deeply into critical Proposition 58 property tax benefits, closing the door on the parent to child exclusion (i.e., parent to child exemption), if a property owner is not able, for whatever reason, to move into their inherited home within a year after the passing of the parent that has left the house and/or land to his or her heirs. 

Proposition 58, and of course Prop 13 tax relief, as well as trust loans to buyout co-beneficiaries while locking in a low tax base, has been a life saver for so many estate heirs and trust beneficiaries in California. Life everywhere is hard these days for middle class residents, and California is an especially expensive state to live in.  Moreover, inheriting a home from a parent is a major asset, and being able to save thousands of dollars on property taxes during the initial property transfer, and yearly, certainly adds value to the good fortune provided by these property tax breaks. 

A quote from the Los Angeles Times summed it up succinctly on Oct. 19, 2020:

…a qualifying homeowner who owns a home with a taxable value of $200,000 that is worth $600,000 on the market would pay roughly $2,200 in property taxes now. If the homeowner moves to a $700,000 house, the homeowner would pay $3,300 a year in property taxes under Proposition 19. Without the initiative, the same homeowner would pay $7,700 annually…”

Of course they forgot to mention that this property tax “initiative” must be implemented strictly within a year after the decedent passes away.  Or the door to the tax break slams shut. 

Yet, adding absurdity yet again to redundancy, the Los Angeles  Times once again repeats the one, almost comical, example of “families taking advantage” of this sort of property tax relief, using your right to a parent to child transfer exemption…  indicating repeatedly that there are numerous examples of inherited homes and Prop 13 as well as Prop 58 tax breaks being used by all these rich folks as money making outrages , renting our inherited properties on the beach for $16,000+ per month, and never using it as a primary residence. 

Yet it truly is comical that after 40 years we still have not heard  about one other specific family in California engaged in this sort of money-making practice, but “Jeff Bridges and his siblings”.  Now, we’re certainly open to hearing about other families involved in property tax transfer activities like this, inheriting property taxes from parents at a super low base rate every year, just to be a beachfront landlord raking it in every year from other rich people who are addicted to sun and surf. Yet no other family name ever surfaces. 

And again and again we hear about this one family, the  Bridges, taking advantage of Proposition 13 by renting out luxury homes to wealthy residents… once again in the LA Times in Oct. of 2020, 

“The provision has since been dubbed “the Lebowski loophole” after The Times found that “The Big Lebowski” actor Jeff Bridges and his siblings had advertised a beachfront home in Malibu inherited from their parents for nearly $16,000 a month in rent despite an annual property tax bill that’s a fraction of that amount.”

So is the LA Times telling us that they simply cannot come up with one other family that inherits a luxury property like this and then makes a killing every year renting it out?

These property tax benefits are indeed genuine, and actionable for mostly middle class families.  Not rich movie stars like Jeff Bridges.  The parent to child transfer exemption has always been there for middle class home owners and beneficiaries… since 1986, and actually since 1978 with the advent of Howard Jarvis’  Proposition 13.

The ability to avoid property tax reassessment, to exercise your right to a parent to child transfer exemption, even for a modest secondary property from parents, really can be a life saver for middle class residents who are not rich, and need every break they can lay their hands on.  This conspiracy theory that gives Californians the impression that these tax breaks are mainly for wealthy property owners is completely  false.  If anything, you could call it a middle class tax break, period… and you’d be 100% truthful. 

Now all of a sudden that tax break is gone unless you move into your inherited property within one year of having inherited it.  Is this simply to upset the Bridges family?  And if you don’t move into your inherited home as a primary residence within one year you will lose your property tax transfer benefits… you will lose your parent to child transfer exemption.  You won’t be able to transfer parents property taxes, there will be no inheriting property taxes fro parents.  If you miss that 12-month deadline your ability to keep parents property taxes will evaporate completely.  And if you don’t think this is real, guess again. 

Critics of property tax relief in California, proponents of Proposition 19, repeatedly tell us, “Fine! What’s the big deal anyway? You can move into inherited property within a year and then enjoy your right to avoid property tax reassessment forever!  So what’s the problem:”  Well… the problem is that perhaps some beneficiaries  can’t make that move so easily within year one. Perhaps this is not the most realistic tax revision ever voted into law.

Over 650,000 new homeowners, beneficiaries, took advantage of a Proposition 58/Prop 13 tax break over the past ten years;  that gave them the right to maintain their parents’ low property tax base upon inheriting a home from a parent.  How many heirs or beneficiaries inheriting a home this way over the next ten years will lose inherited property because they will not be able to move into their inherited home smoothly, without problems, as a primary residence within 12 months?

No one knows exactly.  However, we can safely say – a lot!  More revenue for the Legislature.  More homes on the market for realtors.  More cash to pay off unfunded state government pensions.  That, we know.

There are a myriad of reasons why Proposition 19 will turn out to be inconvenient and awkward at best – to be, at worst, an unnecessary tax measure that will effectively fray the fabric of the estate and property inheritance system in California. For example:

     Ones’ job may be an extra 60, 90, whatever, hours away on the freeway getting to work from this new inherited home from mom or dad – and then back again after work.

•     Perhaps a spouse also may have significant travel issues, to and from work, regarding distance to and from a new home.

•     School for children can easily be an issue, if an inherited home is in a new school zone.  All familiarity, neighborhood friends,  teacher relationships, social relationships – all gone, if they’re near where you lived previously. This can cause all sorts of issues for children.

•     A beneficiary could be disabled; and prior to moving abruptly within a year, may need to start fixing up an inherited home to accommodate disabilities – generally costing a good deal of money to implement physical changes of this kind, ramps, safety measures in various rooms, etc.

     Many beneficiaries are senior, which would make such an abrupt move very difficult at best – and for many, downright impossible.

     There is also the matter of selling your inherited house, most likely for a good deal less than it’s probably worth due to Covid issues affecting many California properties; over the next decade.

     Lastly, and ironically, all this hub-bub regarding additional presumed mountains of revenue from new Proposition 19 driven property taxes will, if Jon Coupal and the Taxpayers Association are correct, serve mainly to pay for unfunded state government pensions.  Perhaps a small fraction for the schools system… But that’s about it.

So, as we originally indicated – there is a lot more to this issue than meets the eye.

Inherit A Home And Keep The Property Tax Base

Inherit Property and The Property Tax base

Inherit Property and The Property Tax base

The Los Angeles Times, in their inimitable fashion, put it like this on Oct. 19, 2020:   

About 650,000 California homeowners over the last decade received a tax break that allows them to maintain their parents’ low property tax payments when they inherit their homes…

The provision has since been dubbed “the Lebowski loophole” after The Times found that “The Big Lebowski” actor Jeff Bridges and his siblings had advertised a beachfront home in Malibu inherited from their parents for nearly $16,000 a month in rent despite an annual property tax bill that’s a fraction of that amount.

Proposition 19 would eliminate this property tax break for investment homes and commercial properties, meaning that heirs who inherit their parents’ properties would pay taxes based on market value. With some limitations, children who move into homes inherited from their parents would be able to retain the tax break.

Interesting how the Times gives credence to deceptive wording, while confusing the so-called benefits of Proposition 19.  They parse the actual Prop 19 rules and regs, and purpose in fact…twisting the facts to read, “Proposition 19 would eliminate this property tax break for investment homes and commercial properties…”  Prop 19 does not now exist to eliminate investment homes and commercial properties.  It exists to eliminate the parent to child exclusion, or parent to child exemption… unless you change your life  and move into a new inherited home within a year. 

Interesting that The Times chooses to leave out the fact that inherited property  will be sold off at a loss by inheritors who may not be able to move into inherited property within a year… because middle class homeowners, 95% of the folks affected by this new tax law, won’t be able to afford the new property taxes without the parent to child exemption being utilized within that year one after mom or dad dies.

Instead of telling it like it is The Times tells us, “With some limitations, children who move into homes inherited from their parents would be able to retain the tax break.”  Sure, “some limitations” meaning those folks inheriting property must uproot themselves and set up a  new life within 12 months, plus sell the home they are living in, or give up their inherited home at a financial loss. And maybe they can’t just up and leave their current residence, sell it, and move to a new home that was owned by their parents, that perhaps does not suit them and their family. For a number of reasons. 

Proposition 19 doesn’t exist to eliminate greedy real estate investors… It exists to push middle class home owners out of the way, to force them to sell inherited property if they can’t uproot themselves and move into their inherited home within a year while figuring out a way to sell their own home. In a market hampered by Covid, where maybe it’s not so easy to sell that home they’ve been living in.  These are not investment sharks and real estate hustlers, as the Los Angeles Times is falsely hinting at.  These are regular middle class home owners.

This new tax law affecting property tax relief in California was put in place to generate more money for realtors and the CA Legislature.  Directly impacting consumers.  Regular folks, like you and I.  Not to eliminate “property tax breaks for investment homes and commercial properties”.   That is, we’re sorry to say,  a false characterization.

Abruptly, the entire state found out at the last moment, prior to the November vote, that C.A.R. had launched Proposition 19, along with the California Legislature, which passed by a few votes; due mainly to an extremely clever, albeit a bit deceptive, marketing campaign – confusing voters while hiding the fact that Prop 19 exists to kill parent to child exclusion benefits, bit by deceptive bit.  Don’t be fooled, completely unraveling the parent-to-child exemption is their eventual goal.  Not giving residential and commercial property owners the ability to avoid property tax reassessment every year.

This type of tax break frees property owners from chronic stress based on unpredictable property taxation that is typically high for middle class incomes. This form of property tax relief makes life in general more secure and more affordable for middle class and even upper middle class residents. Rich folks we don’t really need to worry about. They’ll be fine either way. This type of tax relief allows beneficiaries to keep parents property taxes, and of course gives them the ability to transfer parents property taxes when inheriting property; avoiding property tax reassessment, keeping their tax base low through CA Proposition 13.

What is truly incredible to many of us is the ability for a beneficiary in California to use Proposition 58 to get a special loan providing cash to co-beneficiaries through an irrevocable trust, for middle class beneficiaries who want to smooth out cash obstacles (often referred to as “equalizing liquidation”) when it comes to conflicts between siblings who want to sell property versus family members who prefer to keep inherited real property… an invaluable property tax benefit.  Which is exactly why it’s so important to understand how and why Prop 19 exists to kill parent to child exclusion benefits at some point in the future… This is the C.A.R. and CA Legislature’s first baby step in that direction.

All states, forever grappling with this Covid crisis, should be heading towards tax breaks for regular middle class people, and not wasting the country’s time with absurd tax law benefiting a few wealthy corporations, a couple of hundred billionaires and multi-millionaires, with huge tax cuts they do not really need; and corporate welfare for immense companies that would be just fine without it. While a couple of hundred million Americans struggle by generally without tax breaks or tax loopholes of any kind to help them put away some extra cash in the bank every year.

In fact, all states need a Proposition 13 and Proposition 58, to help middle class families get by every year. That’s why beneficiaries or heirs in every state who are expecting real property, or are leaving real property to their own heirs, should conduct some careful research on blogs and Websites that focus on inheritance matters, to get more familiar with Proposition 58 and trust loans, on beneficiary issues and CA Proposition 13.  They should study informative niche blogs like this one…  as well as other niche  Websites that cover property taxes in depth… that delve into California Proposition 13, 58 and 193, as well as how trust loans can help beneficiaries.

All resident should learn more about why Prop 19 exists to kill parent to child exclusion benefits, bit by bit; how to keep parents property taxes and how to transfer parents property taxes, inheriting property taxes, or property tax transfer, parent to child transfer and parent to child exclusion – for residential properties of course; however, also for business oriented sites and commercial properties… that take full advantage of Proposition 58 — making use of trust loans to buyout inherited property from siblings, such as simply to get the facts straight on the transfer of property between siblings, how to buy out siblings share of a house; what makes sibling to sibling property transfer work; and how loans to irrevocable trusts help co-beneficiaries get cash while avoiding the necessity to sell their share of the inherited property.

Then, once they get your pitch together, folks in all states can tell their congressional representatives to get moving on passing property tax law for middle class home owners, not just rich folks that live in lovely upscale neighborhoods!

Many of us wonder when it got to this point in this country, when virtually the only way you can have a genuinely comfortable, safe, secure life is if you are fabulously wealthy – and nothing below that or in between.

Why Does the CA Legislature Want to Remove Tax Breaks for Residential & Business Property Owners?

 

It’s no surprise to anyone in California that if commercial property owners, landlords, business and industrial facility owners ever have their property taxes increased by any tax measure like Prop 15 – rents will go up for business tenants and apt. dwellers.  Most goods and services in the state will go up, increasing the cost of living and negatively impacting 40 million consumers in the state of California.  Companies that can’t abide higher taxes will soon leave California, to more empathetic states, and they will take their jobs with them.  If Proposition 15 ever returns, or comes back with another name, with more deceptively effective marketing.  It is indeed a mystery as to why the Legislature in California would want to impact the entire state in this fashion.  They claim it’s to fund the school system.  According to Jon Coupal at the Taxpayers Association and other analysts and state economists, this is merely a thinly disguised ruse to pay for a few hundred unfunded local government staff pensions. Either way… is it worth it, to impact 40 million Californians this way?

 
It appears that Proposition 19 will now become tax law in California. Removing the so-called parent to child exemption, also called parent to child exclusion or parent to child transfer; destroys a critical property tax relief benefit from homeowners… No longer allowing residential property owners to avoid property tax reassessment every year – which effectively destroys property tax relief in the state of California.           
 
Another related process that may well be affected by Proposition 19 are trust loans, used in conjunction with Proposition 58.  These days, called intra-family loans to trusts to minimize property taxes, with one small, successful boutique firm in Newport Beach, Commercial Loan Corp, opening this historically exclusive,  restricted elite-door for families of all incomes and backgrounds – formerly open only to V.I.P.s and mega-wealthy families – now open to  all middle class and upper middle class  California residents.  Where visionary CEO Kerry Smith’s concept for trust loans are used in conjunction with Proposition 58, to buyout a co-beneficiary’s inherited property; also referred to as a sibling-to-sibling property transfer; while  locking in a low property tax base. Keeping property taxes inherited from parents, plus fulfilling the need to equalize cash going to co-beneficiaries who wish to sell the same inherited property to outside  buyers… walking away with less than if bought out by a trust loan organized by co-beneficiaries.
 
In California, Proposition 58 protects families that owe thousands of dollars in property taxes, while they organize and resolve related issues, typically over a 17 or 18 month period, settling an estate after the passing of the decedent leaving property to his or her heirs. Under Proposition 58 (voted into law overwhelmingly in 1986), a home and up to $1 million of assessed value of other real estate are excluded from reassessment when transferred between parents and children. This keeps the property tax assessment the same as if the property was still owned by the surviving parent.
 
People should research and get more familiar with these great tax breaks, at Websites like the BOE site at https://www.boe.ca.gov, covering Proposition 58; Or, informational Blogs and Websites like this free resource Blog, that focus on Prop 13 and Prop 58 as well as trust loans working in concert with the right to buyout a co-beneficiary’s inherited property; on business  Websites like Trust and Estate Loans or  Proposition 58 / Trust Loan specialists such as Commercial Loan Corp.  Folks need to get their facts straight, and begin calling and emailing  their political representatives, to get them working on property tax relief like they have in California!                                   

To be fair, every single state in America should have property tax breaks like this – not just for wealthy folks and massive companies… but for everyone… regular middle class Americans. What is so difficult to understand about this? Are working class people in states other than California going to keep voting in the interests of billionaires, which is OK, but against their own best interests? Against property tax breaks for middle class or working class families? Now that makes no sense.
 
The fact of the matter is, especially during an endless pandemic, every state needs property tax breaks like they have in California, Proposition 13 tax relief benefits, the ability for beneficiaries that are inheriting residential or commercial property from parents to avoid property tax reassessment for the rest of their life if they hold on to that property — and even a secondary property as well. Proposition 13 has saved California taxpayers over $500 billion – saving the average middle class family over $60,000… since 1978.

People ask, what is so crucial about CA Proposition 58;  important enough to stop a Proposition 19 tax upheaval to unravel Prop 58 and Prop 13 parent to child transfer ability, the parent to child exemption or exclusion. Which every state should have in one form or another. That’s the point here. Tax relief allowing you to save on the transfer of property from parent to sibling and sibling to sibling.
 
Using property tax relief solutions as an income-saving device for home owners makes it possible for beneficiaries to buyout another sibling’s share of inherited property; when getting a trust loan from a trust lender. Trust lenders advance you a loan of, for example, $400K, $500K, $700K, whatever you need to buyout a co-beneficiary’s inherited property; while at the same time you get to retain a low property tax base guaranteed by Proposition 13. Every state needs this badly right now.  Especially with Covid-19 upending the US job-based economy. Every state needs CA Proposition 58 and Prop 13 type of transfer of property tax benefits and discounted rates.
 
Residents of all states should be communicating with their political representatives, to tell them all states in the US should be able to keep parents property taxes during property tax transfer, with parent to child transfer, or as attorneys call it, “parent to child exclusion” (from present day tax evaluation).  Why should California be the only state in the union that enjoys genuine property tax relief?

To find out, or to confirm, who your Senators are, make use of the search tools at https://www.senate.gov/senators/index.htm or go to https://www.senate.gov/general/contact_information/senators_cfm.cfm Or to confirm who represents you and your family in Congress, you can go to – https://www.house.gov/representatives/find-your-representative or you can use the search tools at https://www.govtrack.us/congress/members    These Websites make the investigation process extremely easy… Whereas years ago it was almost impossible to figure all this out.

Now, it’s simply a quick search and you have  all the info you need to move forward and start telling your representatives in Washington how they should be doing their job!


PART THREE: Property Tax Relief Fights for Its’ Life in California…

As we all know, the Coronavirus crisis is not abating in many states – causing severe and consistent unemployment, and overall economic uncertainly.   Certain states are floundering more than others, without any federal support of any kind, even PPE – thereby costing tens of thousands of families the lives of loved ones. 

With millions of jobs initially put on hold – jobs that were placed on  “furloughed”  status or were standard “lay-offs”… are still in question, as far as resurgence is concerned.  Regrettably, it’s impossible to determine the exact number of jobs lost, as some return: whereas others do not.  Therefore, constant fluctuations make permanent calculations difficult to nail down. 

Making matters even more challenging, the federal government historically calculates “unemployment rates” by adding up the number of workers signing up for unemployment checks;  and deduce an unemployment rate in this fashion. However, once workers stop getting  unemployment checks they somehow magically disappear off the grid.  As if they somehow were never in the system.

It would be safe to say that unemployment, nationally and statewide, remains at critical levels.   And yet California is still the only state in the union that provides middle class residential and commercial property owners with genuine property tax breaks.  

And this is exactly what every state in America needs right now, with unemployment and Covid still spiraling out of control.  Lowering property taxes would surely loosen up some cash to help working families buy food and maintain some decent health coverage, plus put some money away for emergencies. 

If we were able to get property tax measures passed in most states, similar to the mega-popular tax breaks California home owners and commercial property owners enjoy, the overall positive cumulative affect on American tax payers would be significant. Folks would be able to easily transfer parents property taxes, and keep transfer parents property taxes, or buyout while inheriting property taxes at a low base rate. 

Especially in times like this – shouldn’t we all have access to property tax relief like this?  An intra-family loan to a trust, using Proposition 13 and Proposition 58 type of property tax transfer benefits and tax breaks, with parent to child transfer or as law firms refer to it – parent to child exclusion, or exemptions.

Do some research and push your Beltway representatives in Congress to put together some bills like California has passed to help home owners and commercial property owners.  And you can use the Covid crisis for added motivation.  This is covered on  informative, accurate niche Websites such as Commercial Loan Corp.  

An intra-family loan to a trust in conjunction with Proposition 58, or Prop 193, makes it possible to maintain a low property tax base basically forever upon a beneficiary buyout of sibling property shares, or as realtors call it, “the transfer of property between siblings”, and “lending money to an irrevocable trust“ – typically from an irrevocable trust loan lender.

While you’re at it, take a look at the CA State Board of Equalization to find out how all this works, or research niche info blogs such as  this one, Property Tax Transfer…  Plus other sites focused on property tax breaks for Californians. And let’s be frank… Living in that state, although there are great benefits, is admittedly expensive – in relation to many other states. 

States like New York, Texas, New Jersey, Connecticut, Massachusetts… are all expensive states to reside in.  With zero property tax relief or significant tax breaks of any kind – unless you’re a multi-millionaire or billionaire.  Then you get nothing but legislated V.I.P. tax cuts. However,  firms like Commercial Loan Corp, or Paramount Property Tax Appeal,  provide V.I.P. property tax breaks or V.I.P. personal business and  property tax reduction to everyone…. regardless or income or overall net worth. 



PART TWO: Property Tax Relief Fights for Its’ Life in California…

A couple of things worth mentioning, as we’re on the subject of replacing political noise with fact-based information…

The Coronavirus driven mortgage  foreclosure and credit card default catastrophes are coming, given the tens of millions of people that are unemployed nationally… with millions unemployed in California alone.  Let’s not forget that. And the CA Legislature wants to raise property taxes in the middle of a pandemic?

Making matters even scarier for people, there is talk about  eliminating the payroll tax,  unraveling Medicare, and Social Security so those programs are defunded by 2023.  Not a particularly good idea in the midst of a Covid-19 pandemic, where we saw 84,000 people infected in one day last week.  Does California really need a tax hike on property, in a time like this?

We’d have to say no. We don’t need a Proposition 19 to unravel crucial elements making up the foundation of property tax relief in California… And we don’t need a Proposition 15 to take away much needed tax breaks for already struggling landlords and commercial property owners in the state of California. Frankly, we also do not need politicians politicizing the Coronavirus crisis, and we don’t need PR and disinformation from the federal government. 

What we do need, however, are some ways to help home owners, and renters, spend less while unemployment rages – and afterward as well. We need a permanent property tax relief system in place in the United States, just like they have in California, to genuinely help Americans spend less and save more. Making sure, for example, that we have the ability to transfer parents property taxes, when inheriting property taxes, so we can avoid property tax reassessment. Without present value tax assessment taking a large bite out of our savings every year. 

And of course on top of parent to child transfer protections, we need, just like Californians have – the legal right to transfer parents property taxes when inheriting property taxes; with the ability to keep parents property taxes, in other words property tax transfer that maintains everyone’s property taxes at a predictable low base level, say 2% no more, with iron clad parent to child transfer of low property tax rates when we inherit property from our parents or parent – or, as attorneys call it, “parent to child exemption”.  Exclusion from present day property tax evaluation… avoiding property tax reassessment.  As they do in California.

Also, with the ability to buyout siblings’ property shares with a trust loan, through Proposition 58, always insuring we keep our parents low property tax rate; avoiding property tax reassessment. Also, being able to buyout sibling’s share of an inherited house – as realtors call it, “transfer of property between siblings” or “sibling to sibling property transfer”.  

Californians take these property tax relief measures for granted! Buying my brother’s share of our house or the transfer of property between siblings; Buying out siblings’ share of a house; Buying out property shares through cash to a trust loan from a trust lender, such as Commercial Loan Corp, for example. Imagine that. Meanwhile,.

Most Americans don’t even know what these terms even mean, or what Proposition 13 or Proposition 58, or trust loans, even signify. Just do some initial research on sites like https://cloanc.com/category/prop-58 to learn up on trust loans with Proposition 58 or Prop 193 – keeping a low tax base upon beneficiary buyout of sibling property shares, or as realtors call it, “the transfer of property between siblings”, and “lending money to an irrevocable trust“ – typically from an irrevocable trust loan lender.

Just take a careful, thoughtful  look at CA State Board of Equalization, at https://www.boe.ca.gov/ or do some easy research on info blogs like https://propertytaxtransfertrusts.com simply to get the basics down, so you know what you’re talking about when you talk to snooty staffers answering calls at your representative’s office in Washington DC.

>> Click Here to go to Part Three…

PART ONE: Property Tax Relief Fights for Its’ Life in California…

Jon Coupal, articulate and persistent president of the authoritative and well respected “Howard Jarvis Taxpayer’s Association”, has been leading the charge in California to keep property tax relief safely in place.

There are a few other notable property tax reduction leaders, like Michael Wyatt, “Property Tax Consultant”; and Kerry Smith, courageous and visionary president of the “Commercial Loan Corp”, that furnishes trust loans tied into Proposition 58, making the transfer of property between siblings and buying out a sibling’s share of a house possible.

All of this, of course, ties into the process of inheriting property taxes, ones ability to keep parents property taxes, and property tax transfer as it pertains to the parent to child transfer (which Proposition 19 seeks to unravel) — commonly known as parent to child exclusion or a parent to child exemption.  Plus, there are high end tax reduction specialists, like noted Paramount Property Tax Appeal president Wes Nichols,  who  specialize in personal business tax reduction and property tax assessor appeals.  These folks have all been on the front lines of these issues for many years.

Not known for soft ball opinions, or for taking it easy on property tax relief opponents, Mr. Coupal was extremely candid in an interview with this Blog; and had some interesting things to say recently, in a particularly hard-hitting article in The Tahoe Daily Tribune, on Oct. 9, 2020 “Explaining the Confusing Prop 19 to Californians” and in his own column on the http://www.hjta.org Website, “Prop-15 Backers Try to Mislead Homeowners”  where Mr. Coupal stated, on Oct 21:

“Prop-15 backers try to mislead homeowners. It’s a sign of desperation. When anyone in politics starts making wild claims less than a month before an election, you know something is amiss. So it is with the proponents of Proposition 15, the “split roll” initiative which would impose the largest property tax increase in California history.

Throughout this campaign, proponents have consistently argued that the measure won’t impact homeowners because it just raises property taxes on commercial and industrial properties. But now, they claim that Prop. 15 actually saves homeowners money.

This is absurd on its face. Recent polling suggests that support for split roll is sinking fast, especially among homeowners. This might explain why proponents have, at the 11th hour, countered with the argument that, as corporations have to pay more, the tax burden for homeowners goes down. Nobody believes this.”

Mr. Coupal also brings to our attention the deliberate confusion around proposed Proposition 19; as he reiterates,

“It’s no secret that ballot initiatives can be confusing, but Proposition 19 takes obfuscation to a whole new level. Voters can’t be blamed if they can’t remember whether Prop. 19 is the initiative that is a massive property tax hike or the measure that actually has something good for homeowners or the initiative that has something to do with firefighting. The fact is, all three are at least somewhat true — especially the part about the big tax increase.

Let’s clear up the confusion: Proposition 13, passed in 1978, gave California homeowners certainty about their future property tax liability because increases in the “taxable value” of property would be limited to 2 percent per year. Property would be reassessed to market value only when it changed hands. But that tax hike even applied when property owners transferred a property to their own children.

Prop. 19 would repeal Proposition 58 and force the reassessment of inherited or transferred property within families. The only exception is if the property is used as the principal residence of the person to whom it was transferred and even that exclusion is capped…”

If you repeal Proposition 58, the uniquely Californian funding process involving trust loans tied into Proposition 58 may have to be revised. And by the way, the ‘principal residence’ ruling must take place within one year of the passing of the decedent who left behind the property in question.  This in itself creates a myriad of problems, if you have an additional mortgage thrust upon you, plus the expenses that very well may accompany  another residence if you’re also a homeowner at the time you inherit this additional property. 

You may have a large family that won’t fit into the inherited property, noo that you’re forced to move in within a year.  The inherited home may be a much longer drive from your job or your spouses’ job.  Your children may attend a school in a totally different district, causing additional problems; etc. so on and so forth.  Otherwise, you may be forced to sell your inherited property, and that can bring inconvenient and expensive issues along with it as well.  It may not be so simple.

At any rate, Mr. Coupal added, “The non-partisan Legislative Analyst’s Office estimates that the repeal of the “inter-generational transfer protections” will result in tens of thousands of California families getting hit with higher property taxes every year. The LAO acknowledges that Prop. 19 imposes an additional tax burden in the “hundreds of millions of dollars”.

>> Click Here to go to Part Two…