A ballot initiative that would have, if approved by voters, eliminated California’s “death tax” on inherited homes failed to reach the required number of signatures to be placed on the November 2020 ballot.
The initiative would have exempted from property tax reassessment transfers of primary residences between parents and children (and grandparents to grandchildren if parents are deceased), regardless of value (removing a cap set in 2020 by Proposition 19).
The initiative would have also exempted the transfer between same family members of other real property valued up to $2.4 million (e.g., second homes, rental/business properties). It would have also eliminated the California Fire Response Fund created by Proposition 19, and would require the state to reimburse local agencies for property tax losses due to Proposition 19’s other tax changes.
According to the estimate summary, prepared by the Legislative Analyst and Director of Finance, the cost to state and local governments would have been millions of dollars per year to cover local government property tax losses. These costs would grow over time, possibly to $1 billion or more per year. Local government funding would decline by tens of millions of dollars per year. Over time, these losses would grow to hundreds of millions of dollars per year. Schools would have losses of similar amounts.