The Senate Governance and Finance Committee rejected a measure May 10 that would repeal the provisions of Proposition 19 that increase property taxes after intergenerational transfers of real property.
Proposition 19, approved by the voters in 2020, expanded the ability of seniors and disabled homeowners to transfer the base-year value of their homes to replacement properties. The initiative also limited the reassessment exemption for intergenerational transfers of property, resulting in many properties being reassessed at market value when inherited by family members, unless at least one of the heirs began using the property as a principal residence within one year.
SCA 4, by Republican Senator Kelly Seyarto, would let voters reconsider the latter provision by placing a measure on the November 2024 ballot to reinstate the change-in-ownership exclusion for intergenerational transfers as it existed prior to Proposition 19.
Los Angeles County Assessor Jeffrey Prang testified in support of SCA 4.
“Prop 19 was the most significant change to California’s property tax system since Proposition 13 in 1978,” Prang said. “It contained numerous glaring deficiencies, contradictions, and ambiguities on issues fundamental to its implementation, and I will tell you candidly Proposition 19 was an administrative dumpster fire.”
During recent State Board of Equalization meetings, public testimony against Proposition 19’s tax increase provisions has been frequent and passionate. Many of the taxpayers who commented at the BOE hearings criticized the California Association of Realtors and California Professional Firefighters for sponsoring the measure, accusing the groups of using misleading tactics by focusing their campaign on the value transfer provisions and on Proposition 19’s expressed intent to raise funds to combat wildfires.
Proposition 19 was placed on the ballot by the Legislature at the behest of the firefighters’ union and the real estate agents, after the groups negotiated to take an initiative version off the ballot.
The Senate committee rejected the measure, with three members in support and four opposed. The vote was largely down party lines, but Democratic Senator Catherine Blakespear of Encinitas joined two Republicans in support. Democratic Senator Steve Glazer did not vote.
After the hearing, the Howard Jarvis Taxpayers Association (HJTA) – the sponsor of SCA 4 – filed an initiative to eliminate the change-in-ownership exclusion for the intergenerational transfer of property.
Proposition 19 was approved with just 51.1 percent of the vote, after a campaign in which the “yes” side spent $57 million and the “no” side spent $69,008.