Why it is essential to Reinstate 58
Background from the Howard Jarvis Taxpayers Association
California voters have been emphatic that they do NOT want state inheritance taxes.
In 1982, by an overwhelming vote of nearly two-thirds of the electorate, Californians repealed
the state’s inheritance and gift taxes and prohibited state and local governments from enacting
such taxes again.
By 1986, rapidly rising property values had created a new “inheritance tax” problem for
California families. When properties were transferred from parents to children, they were
reassessed to market value just as if they had been sold. Californians who inherited property
from their parents suddenly faced wildly unaffordable property taxes.
Californians were angry, so much so that the Legislature wrote a constitutional amendment to
exclude certain family property transfers from reassessment.
The measure that became Proposition 58 in 1986 passed the Legislature by a unanimous vote in
both houses. It was approved by more than 75% of voters statewide.
Proposition 58 said parents and children could transfer a home of any value and up to $1 million
of assessed value of other property, and that would not be considered a “change of ownership.”
This meant that long-held family businesses, rental properties and homes could be passed on to
the next generation without ruinous tax increases that forced children to sell the properties their
parents worked so hard to keep.
For more than thirty years, Proposition 58 protected the economic gains of hard-working
California families. And now, it’s gone.
In 2020, Proposition 19 repealed Proposition 58 as well as Proposition 193, a similar measure
that extended the same protections to property transfers between grandparents and grandchildren
if the children’s parents were deceased.
Proposition 19 passed very narrowly after a costly ad campaign that emphasized its benefits for
seniors, wildfire victims and disabled homeowners. Today, as voters discover the provision that
requires the reassessment to market value of properties transferred within families – with only
limited exceptions – anger is growing. Countless California families who lose a parent will
receive a new tax bill along with the sympathy cards.
When asked directly and clearly, California voters have said they do not want the tax code to
force families to sell the properties they have worked so hard to acquire. Proposition 58 and
Proposition 193 must be reinstated.
In the News:
“We are not talking about $25 million palaces in Malibu. We are talking
about humble homes. Middle-class homes. I live in the Bay View
community (of San Francisco). We’re talking about Baldwin Hills of
Los Angeles or Encanto in San Diego and other communities throughout
California. Homes that were purchased for $100,000 decades ago that
now have a market value of over $1 million. These homes were paid for
through hard work and could be potentially lost.”
Malia M. Cohen, Member of the State Board of Equalization
Los Angeles Sentinel
February 4, 2021
“BOE Member Malia Cohen Raises Red Flag on Bank-Breaking Prop 19 Tax
Costs” By Antonio Ray Harvey, California Black Media
https://lasentinel.net/boe-member-malia-cohen-raises-red-flag-on-bank-breakingprop-19-tax-costs.html
“Proposition 19 may actually drive working-class families of modest
means into selling their homes, family farms as well as other property to
avoid an enormous unintended tax burden because the property faces
reassessment.”
Jeff Prang, Los Angeles County Assessor
Santa Clarita Valley Signal
March 1, 2021
“Update on Prop 19, inheritance concerns” By Jeff Prang
https://signalscv.com/2021/03/update-on-prop-19-inheritance-concerns/
For More Information:
Scott Kaufman, Legislative Director, Scott@hjta.org, 916-444-9950
Susan Shelley, VP Communications, Susan@hjta.org, 213-384-9656