PART TWO: If Every State in America Had Property Tax Relief Similar to California…

California Transfer Parents Property Taxes To A Child

All things considered, there is no good reason residential, commercial and industrial property owners in every state in the United States  shouldn’t have property tax relief, modeled after California tax relief.  And not wind up in a nightmare with the tax people as they did in California. with widows  and elderly veterans and retirees living off fixed incomes being evicted from their homes on a regular basis… prior to 1978.  

This is really where the major problem is with many middle class estates, along with estate taxes often enough. Without property tax benefits, as California has had since 1978, so many beneficiaries in so many different estate, inheriting property from parents, simply can’t afford the upkeep and property taxes on their inherited home, and frequently are forced to sell their parents’ property. Often against their will.

There is a lot of talk among real estate attorneys and property tax advisors in states other than California about adopting some sort of property tax shelter to help middle class Americans in a genuine fashion, long-term.  Instead of consistently bleeding the general public dry year after year, decade after decade… while multi-millionaires and billionaires pay less and less taxes by raising the national debt by a trillion or two.  Especially during so-called conservative administrations, which generally lean towards assisting the wealthy with tax cuts   while ignoring tax relief needs of the middle class and working classes. Moreover,  particularly in the midst of a global Pandemic, where we have millions our of work, no federal leadership, and 30 or so states in the Midwest and Deep South in deep trouble with Coronavirus health and economic issues piling up, with no end in sight.  What better time than now to pass national property tax relief, benefiting all states.

To out it bluntly, it’s time that the middle class have their day, and get to enjoy genuine property tax relief to free up some more cash so they can enjoy their lives a bit more, with a little less financial stress. However, the trick is to enlist the interest of the public itself, as well as certain name brand  politicians, which would, if they had some intelligence and common sense, endear them to their constituents forever.

If, by any chance you reside in California, and you happen to be a beneficiary inheriting property from your parents, consider yourself to be very lucky. Instead of buckling under to family conflicts revolving around property issues, you’d be able to buyout siblings’ property shares, while retaining a low Proposition 13 protected base property tax rate – plus always  take advantage, anywhere in the state, of your right to avoid property tax reassessment; to transfer parents property taxes, and keep parents property taxes when inheriting property taxes.

This is why so many property tax advisors and real estate lawyers in various locations believe every single state should have a property tax measure similar to CA Proposition 13, Proposition 58 & Prop 193.  The California model is a perfect prototype to mirror for effective, seamless property tax breaks;  including the right to transfer parents property taxes, inheriting property taxes and the ability to keep parents property taxes for all property tax transfer scenarios involving parent to child transfer or parent to child exclusion from present day property tax rates…  involving beneficiaries of family trusts – most importantly, avoiding property tax reassessment.  To mirror Proposition 58 type of benefits, states without property tax relief would need to also adopt the ability to help beneficiaries buy out sibling property – as realtors call it, “transfer of property between siblings” or “sibling to sibling property transfer”, or buying out siblings’ share of a house.  And beneficiaries everywhere, if they are aware of it, rarely disagree.

Beneficiaries, as well as residential, industrial and commercial property owners in every state in America need to research these forms of property tax relief at resource blogs like “Property Tax Transfer”;  as well as  Websites that focus on California Proposition 58, on the property tax transfer process, and on how trust loans from trust lenders work, to help beneficiaries buy out sibling property, from start to finish… outlining how the unique combination of a trust loan with Proposition 58 serves to equalize the  distribution  of  cash for trust beneficiaries… at Websites like “Trust & Estate Loans”… 

Or perhaps at a well known, premium trust lender’s Website that delves into the actual nuts & bolts of the Proposition 58 / trust lending process, for example at the popular, first-class Commercial Loan Corp. Website; which is, arguably, the most visited Website of it’s kind in this specific lending category.

This gives beneficiaries enough information to successfully avoid estate conflicts between siblings; with some beneficiaries insisting on selling inherited property, and some wanting to keep their inherited property, at a low long-term property tax base. 

>> Click Here to go to Part Three…

PART ONE: If Every State in America Had Property Tax Relief Similar to California…

California Proposition 58 Property Tax Transfer

Considering every state in America, if we were to project into the future and take into account all the ways we could avoid wasting money as a  result of inheriting  property from our parents… If you were expecting property as an inheritance – what would you do to make sure you were inheriting a home you could afford to keep? 

Nothing comes to mind?

What if every state in the union embraced the same sort of property tax breaks that California has employed since 1978… when Proposition 13 was voted into law so every residential, industrial and commercial   property owner would be able to avoid property tax reassessment. 

Subsequently, CA Proposition 58 was passed in 1986, enabling the transfer of property between siblings, making it possible to buyout your siblings’ property shares, plus insuring that you keep parents property taxes, basically forever – maintaining a low Proposition 13 guaranteed property tax base, capped at  a 2% maximum rate – all with the help of a loan to an irrevocable trust. 

Sounds simple, however it’s not quite as simple as it sounds. You need a reliable trust lender to help you, and you must qualify for all  the requirements necessary to be approved for Proposition 58 – in order to take advantage of it. 

Given the stunning unraveling of the job-based economy over the past several  months in the United States, due to all the lay-offs and so-called “furloughs” resulting from the Coronavirus crisis – as of August 2020 there are over 51 million lost jobs nation-wide, and more than 6.7 million unemployed in California alone… although what percentage of that is  temporary or permanent – we don’t yet know.

Frankly, the danger that the loss of millions of jobs poses to the country, not to mention the startling lack of engagement exhibited by the federal government, only exacerbates the health crisis.  Therefore, it’s clear to most of us that it’s high time lawmakers in Washington begin to put in place some permanent financial guardrails to help working class and middle class households lower expenses to some degree, to hopefully free up some spending cash for those that are out of work, with no resolution yet in sight. 

One such guardrail would be to free up additional personal spending cash by lowering property taxes on the middle class, whose spending habits, historically, keep the economy flowing.  It would make a great deal of sense right now, with no end to the Coronavirus challenges in sight, to not defer certain taxes – but to completely eliminate them! 

Most likely,  the least risky form of taxation to lower right now would be property taxes, as we have a successful property tax relief model in California to mirror in all the other states – preventing politicians from claiming that it probably wouldn’t work out, so why bother… why try.   Clearly, property  tax relief has worked out, and continues to be a successful system, in California. 

It would certainly help to prop up a flagging middle class besieged by an unprecedented Pandemic, and corresponding recession, to put in place residential and commercial property tax breaks similar to Californian property tax relief measures made possible by CA Proposition 13, enabling property owners, in the wake of  transfer of property measures, to avoid property tax reassessment every year… Making sure to transfer parents property taxes when  inheriting property and inheriting property taxes from parents… in other words inheriting property taxes that equal the lowest taxes your parents paid after 1978. 

Prior to 1978, property taxes were unpredictable and way too high in California… until trust  beneficiaries and heirs of estates were given “parent to child transfer”, or “parent to child exclusion” as real estate attorneys refer to it.  

Interestingly enough, since 1986 California trust loans have been used to resolve seemingly unsolvable inherited property conflicts between siblings; working alongside CA Proposition 58. Once approved, Prop 58 helps heirs to buyout sibling property through trust liquidity – siblings that are intent on selling their property shares… Generally called a beneficiary buyout of sibling property shares, sibling to sibling property transfer, or a transfer of property between siblings – siblings looking to sell their property shares wind up with more liquidity in trust than if they had sold out directly to an outside buyer.  Conversely, folks looking to keep their inherited property can avoid property tax reassessment at present day rates, going forward; retaining the same low property tax base their parents had. 

That’s the real genius of the property tax relief system in California… and the bottom line gift for middle class home owners and non-wealthy landlords in California – the legal right to avoid property tax reassessment. 

The magic of trust loans from trust lenders is that they make it possible, when working in concert with Proposition 58, to equalize cash to beneficiaries – in other words Prop 58 helps heirs to buyout sibling property – if they’re looking to sell an inherited property held up by beneficiaries of the same trust that are looking to keep the same inherited home and/or land…

For once, this would force estate property conflicts to end up as win-win scenarios for heirs of estates or trust beneficiaries in states other than California.  And we’re talking about beneficiaries who generally do not get along terribly well, as is illustrated by the frequently hard-nosed conflicts associated with their inherited property issues… where one or two want to keep their inherited home…  while several wish to sell… One wants to evaluate the property at one amount, the others at a different amount. Many families, typically the siblings, just can’t agree on anything.

And yet other families agree on everything in these estate or inherited property matters…. So you just never know.  However, typically there are some problematic conflicts to address.  And that’s where a trust lender tends to come into the picture – as we have said, to “equalize cash” for  those who wish to sell, while setting  a low base tax rate for siblings who are set on keeping the home inherited from beloved parents. 

>> Click Here to go to Part Two…