The California State Board of Equalization released the new amount adjusting the $1 million exclusion for Proposition 19 intergenerational transfers occurring on Feb. 16, 2023 through Feb. 15, 2025. The BOE is required to calculate and publish the adjustment every other year based on the Federal Housing Finance Agency’s House Price Index for California. This is the first adjustment since the passage of Proposition 19 in November 2020, and the amount increased by 2.26 percent to $1,022,600.
“The 2.26 percent increase will provide additional tax savings to those who transfer their home or family farm to their children or grandchildren,” said BOE Chairman Antonio Vazquez.
Proposition 19 only allows for a principal residence or a family farm to be transferred between a parent and a child or between a grandparent and a grandchild, where the grandchild’s parents are deceased without a property tax increase up to a certain value if the property continues to be the principal residence or the family farm of the transferee. The excludable amount is capped equal to the principal residence or family farm’s taxable value at the time of transfer plus $1,022,600. As part of the requirements, the transferee must apply for the homeowners’ or disabled veterans’ exemption within one year of the purchase or transfer of the family home or farm.