Los Angeles County Assessor Jeff Prang plans to discuss new rules related to tax assessment of inherited properties in California, among other topics, at an online forum to be hosted by the Pasadena-Foothills Association of Realtors later this month.
PFAR’s Town Hall, titled “Conversation with Assessor Jeff Prang,” is scheduled for 1 p.m. March 16, according to PFAR Director of Government Affairs Rian Barrett.
No specific agenda was set for the meeting, however, the recent changes to Proposition 13 brought on by the passage of Proposition. 19 in November were expected to be a hot topic.
“We are going to have an opportunity for people to ask questions and for him to answer them,” Barrett said.
“I think people are interested in how Proposition 19 will be implemented and at the assessor’s office, what guidelines they’re going to be following,” he said.
“We are anxious to hear how they plan to address them,” Barrett added. “We are waiting to see how they handle that and how they move forward with that as a united front with all the assessors.”
Prang said he planned to give a brief overview of his office and discuss local trends related to real estate values.
“We’ll talk a little bit about how COVID has impacted the real estate market, both residential and commercial, and what to expect over the course of the next year, and the value that we establish leads to your property taxes.”
Programs to help residents lower their tax bills will also be discussed, according to Prang.
“But then one of the primary topics we’re going to talk about is Proposition 19,” he said. “That’s been an issue of great concern since it was enacted by a vote of the people last November. Proposition 19 is an amendment to Proposition 13 and makes some significant changes to property tax administration.”
In part, the complex piece of law allows for seniors, the disabled and natural disaster victims to maintain their existing property tax base when moving, Prang explained.
For those who qualify, “It basically makes your property tax base portable anywhere in the state, whereas under the previous law it was only within participating counties. I think there were 13,” he said.
Proposition 19 allows qualified individuals to maintain their tax rate when buying a home of any value, compared with previous law, which mandated the new home be of equal or lesser value.
“The measure was sponsored by the California Association of Realtors and they were concerned a lot of seniors who may have wanted to downsize or move weren’t doing so because they were afraid that they would lose their low property tax bases,” Prang said. “This gave them the flexibility to move. And the realtors are hoping that’s going to increase the amount of inventory that changes hands.”
Prang said the bulk of questions he has received related to intergenerational transfers, or the inheritance of properties.
Proposition 19 placed some new limits and ruled on when inherited properties are exempt from reassessment, he said.
“If you inherit a rental property or commercial property from your parents, that will be reassessed at market value. So you’ll inherit the property, but you also inherit a larger tax bill,” Prang said.
“Secondly, when it comes to the residence, the only property that your parents can give to you without reassessment is their primary residence,” he said. “And then for you to take advantage of that tax benefit, it must become your primary residence.”
Some aspects of the new rules remain unclear and will likely require clarification from the legislature, Prang said.
The March 16 forum will be free for PFAR members and $15 for the general public. Those interested in attending can register online at pfar.org/event/with-jeff-prang.
