Parent-Child Exclusion Archives

What You Should Know About California’s Parent-Child Property Tax Exclusion

By Office Staff|2026-07-28T10:13:14-07:00July 28, 2026|Categories: California Tax Planning|Tags: Parent-Child Exclusion, Parent-Child Property Tax Exclusion|0 Comments

Start Here: California’s parent-child property tax exclusion can help preserve a family’s lower property tax value when a home passes from one generation to the next. The rules changed significantly under Proposition 19, which was passed into law in November of 2020. To qualify for the exclusion now depends on how the property is used, who receives it, when required forms are filed, and the home’s value. If you’d like a deeper overview of Prop 19, including the rules for transferring your property’s taxable value when you move, see our companion blog post, Understanding Proposition 19: Property Tax Planning for California Homeowners.

Passing a home from one generation to the next often involves more than estate planning. California property tax rules can have a lasting effect on the cost of owning inherited property, and understanding those rules before making a transfer can help your family members and loved ones avoid unexpected tax consequences.

Here at SWC, we closely monitor changes to federal tax law and California property tax rules. Our ongoing attention allows us to incorporate new tax planning opportunities into each client’s personalized tax-saving and wealth-building strategy while helping them make informed financial decisions.

Understanding California’s Parent-Child Property Tax Exclusion

California generally reassesses real property (aka, real estate) to its current market value when ownership changes hands. A higher assessed value often results in higher annual property taxes.

One important exception applies to certain transfers between parents and children. When all of the state’s statutory requirements have been met, the transfer may qualify for an exclusion from reassessment, allowing the child to retain some or all of the parents’ existing taxable value instead of receiving a full reassessment.

Proposition 19 substantially changed these rules for transfers occurring on or after Feb. 16, 2021. Today, the exclusion is more narrowly applied than it was under prior law.

Who Qualifies as a “Child” for California’s Parent-Child Property Tax Exclusion?

For purposes of the parent-child exclusion, California law generally recognizes the following relationships: Continue reading… Continue reading… Continue reading…

Keeping Pace with California Tax Law: Part 2 — The Parent-Child Exclusion

By Office Staff|2022-08-18T12:28:56-07:00August 9, 2022|Categories: Legislation|Tags: California Prop 19, Parent-Child Exclusion|3 Comments

This week, in Part 2 of our three-part series on keeping pace with California tax law, we bring you up to speed on the parent-child exclusion, which applies to any real property purchases or transfers between parents and children. In last week’s post, we covered Prop 19, which makes it more affordable for older homeowners to relocate in California.

In a nutshell, the parent-child exclusion enables children to inherit their parents’ property and parents to inherit their children’s property without a property tax increase, subject to certain qualifications and limitations. Prop 19 changed the way the parent-child exclusion works as of Feb. 16, 2021.

The Parent-Child Exclusion Before and After Prop 19

In California, real property, such as a home, is reassessed only upon a change in ownership, but when the change in ownership is within a family — specifically parent to child, child to parent, or grandparent to grandchildren — you can file for a reassessment exclusion to prevent a reassessment or reduce the reassessed value.

Before Prop 19 (effective Feb. 16, 2021), here’s how the parent-child exclusion worked:

Parents (transferor) could transfer their primary residence to their child/children (transferees) without a reassessment.
There was no limit on the value of the home that could be transferred.
The child/children could live in the home, use it as a vacation home, or rent it out.
Parents could transfer up to $1 million of California real property other than their primary residence to a child/children without reassessment. If the assessed value is more than $1 million, the first million dollars is transferred without change, and only the balance is reassessed.

Prop 19 changed the rules. For any property transfers occurring on or after Feb. 16, 2021, the parent-child exclusion works like this: Continue reading… Continue reading… Continue reading…