Does Prop 19 apply to trusts?
Yes. When a parent’s trust passes the family home to a child at the parent’s death, it is treated as a parent-child transfer, so the same rules apply: the home must become the child’s principal residence and the value limit applies. A living trust avoids probate. It does not avoid Proposition 19.
People also ask how Prop 19 affects inherited property in a trust when there are several children. The trustee’s choices about who receives the house, and when, can decide whether any of the tax base survives, which is why the trustee and the heirs should look at Prop 19 before anyone signs a deed.
Is Prop 19 still in effect in California?
Yes. The parent-child exclusion changes became operative on February 16, 2021, and the value limit is adjusted every two years. It was $1,022,600 for transfers from February 16, 2023, and is $1,044,586 for transfers from February 16, 2025 through February 15, 2027 (State Board of Equalization).
What are the Prop 19 primary residence requirements?
The home must have been the parent’s principal residence and must become the child’s principal residence. The child must file for the homeowners’ exemption within one year of the date of death or transfer. A late filing gets the exclusion only going forward (State Board of Equalization).
How much more tax will we pay? A worked example
In the example below, a San Francisco home a parent has owned for decades would see its annual property tax rise from about $3,600 to about $11,500 if a child moves in, and to about $24,000 if the family keeps it as a rental.
Assumptions, for illustration only: the market value at the parent’s death in 2026 is $2,000,000; the factored base year value is $300,000; the tax rate is 1.2%. Your county’s rate and your home’s factored base year value will differ.
| Taxable value | Annual tax at 1.2% | |
|---|---|---|
| Parent’s tax before death | $300,000 | About $3,600 |
| A child moves in (Prop 19 exclusion) | $955,414: market value of $2,000,000 less the $1,044,586 limit | About $11,465 |
| Heirs keep it as a rental | $2,000,000, full reassessment | About $24,000 |
How the middle row is calculated: the limit is $300,000 plus $1,044,586, or $1,344,586. The market value is $655,414 above that, so the new taxable value is $300,000 plus $655,414, which equals $955,414.
What are your choices when you inherit a parent’s house?
There are three: one child moves in and keeps part of the tax base, the heirs keep the home as a rental and accept reassessment, or the heirs sell. When the heirs cannot agree, the dispute can end up as a partition action.
| Choice | Property tax | What to watch |
|---|---|---|
| One child moves in | Exclusion up to the value limit, while it remains that child’s principal residence | The other heirs usually expect to be paid for their share, which can require a buyout or a loan. |
| Keep it as a rental | Reassessed to market value | Rent must cover a much higher tax bill. Co-owners must agree on management. |
| Sell | No ongoing tax for the heirs | Capital gains are usually limited by the step-up in basis at death, but confirm with your tax adviser. |
When one sibling wants to move in and the others want to sell, see partition actions.
How to avoid Prop 19 reassessment in California?
For a family home, the only reliable way is to meet the rules: a child makes it their principal residence and files the exemption claim within a year. Planning can make that easier, for example by deciding in advance which child receives the house and how the others are paid, but it cannot turn a rental into a protected home.
What is the CA Prop 19 loophole?
There is no reliable loophole, and you should be wary of anyone selling one. Transfers into business entities, for example, have their own change-in-ownership rules and are not a workaround for most family homes. Talk to an estate planning lawyer and a tax professional before you move title.
This page explains California law in general terms. It is not legal advice, and reading it does not create an attorney-client relationship. Statutes change; the code sections linked above are the current text on the California Legislature’s website. It is not tax advice. The value limit changes every two years; the figures here apply to transfers from February 16, 2025 through February 15, 2027.