New California law has raised property tax bills for hundreds of San Diegans

Proposition 19, which narrowly passed by California voters in 2020, amended the state constitution and changed how property taxes are calculated for hundreds of San Diegans.

Now, in many cases, if you are over the age of 55, you are able to keep your original tax rate on your home when you sell it and buy a new home. The new law allows people over the age of 55 to do this a maximum of three times.

However, in order to generate a net increase on property taxes statewide, property tax benefits on inheritances have become more limited.

San Diego County Assessor Jordan Marks said the passing of Prop 19 changed our property tax system in two major ways.

"The first is the parent-to-child transfer. This is a wealth-building tool that for years has helped our community," Marks said. "Also, it's helped maintain our communities of interest. We have a lot of communities that can't afford to stay in the same place, and that's leading to gentrification in many ways. And so we're seeing these communities be broken up because they can't afford the increased property taxes." 

Before Prop 19, you could keep the property taxes on a home or business you inherited. This applied to second homes, vacation homes, rental homes and businesses.

Now, you can only keep the original property taxes (for up to $1 million in value) from when the home was first purchased if you are inheriting the home from a parent or grandparent and if you make that home your primary residence. If you ever move out of that home and turn it into a rental property, the home will be reassessed, and you will have to pay a new rate based on the new value.

The other challenging factor Marks has found is that in order to keep that tax rate, you must file papers with the county's tax assessor's office within one year of your family member passing away.

"As you're taking that time to clean out mom and dad's boxes to go through the house and really, in some of these more confrontational family issues, you don't know who's going to get the house," Marks said. "You're not thinking, 'Well, I need to move in there and make that my primary residence, so my taxes don't go up $10,000, $15,000 while we sort this out.'"

Marks says he's seen some property tax bills increase from $1,600 per year to $10,000 per year because of the new law. His office says they have received queries from hundreds of San Diegans over the last year who saw their bills dramatically jump.

The assessor's office is trying to be proactive and educate San Diegans about the new law. It is reaching out to mortuaries and giving families a checklist of paperwork that needs to be filled out, so they don't see big increases on property tax bills.

The office has also launched a Navigating Loss Program that will walk family members through the process of what they need to do online.