Proposed Constitutional Amendment Would Limit Proposition 19

On May 3, 2021, Assembly member Kevin Kiley introduced ACA 9, a proposed constitutional amendment that would repeal certain provisions of the recently passed Proposition 19. Proposition 19, passed in November 2020, amended the Proposition 13 property tax system to require a reappraisal of the property value for transfers between parents and their children, or between grandparents and their grandchildren if all the parents of those grandchildren are deceased.

Under the California Constitution, as amended by Proposition 13, property taxes are limited to 1% of a property’s market value and increases in annual property valuations are limited to 2% of a property’s base year value. Property values are reassessed at market value when the property is “purchased, newly constructed, or a change in ownership has occurred.”

Changes under Proposition 58 excluded the transfer of certain property between parents and children from the definition of a “change of ownership” that would trigger a reassessment. Proposition 193 allowed the same treatment for transfers between grandparents and grandchildren if the children’s parents were deceased. These exclusions allowed for transfers of homes of any value and other property valued at up to $1 million.

Proposition 19 amended the Proposition 13 property tax system to include as a “change in ownership” the purchase or transfer of a principal residence and the first $1 million of other real property of a transferor in the case of a transfer between parents and their children, or between grandparents and their grandchildren if all the parents of those grandchildren are deceased.  ACA 9 would repeal these measures and reinstate the prior rule.