If you inherit your parents' house and you do not move into it, the property taxes are going up to market rate. That is the short version of Proposition 19, in effect since 2021, and it is the single largest change to California inheritance in a generation.
Even if you do move in, the old protection is capped now. Above a certain value, part of the increase happens anyway.
What used to happen, and what happens now
For decades, a child inheriting from a parent kept the parent's Prop 13 assessed value on the primary residence and on up to a million dollars of other property. Rentals, the vacation place in Big Bear, the duplex. All of it could pass with the low tax base intact, and it did not matter whether anyone lived there.
Prop 19 narrowed that to a family home or a family farm, nothing else. And it added a condition that did not exist before: the child has to occupy the home as their own principal residence, and has to keep doing so.
The three rules that decide your outcome
- It must be the family home or family farm. Rental and investment property no longer qualifies at all.
- You must move in and claim it as your principal residence, and the exclusion continues only while you keep it as your principal residence.
- The exclusion is capped. It equals the property's current taxable value plus $1,000,000, adjusted biennially. Market value above that cap gets added to the base year value.
The worked example, because the cap confuses everyone
Your mother bought in Mid-City decades ago. Her assessed value today is $200,000. The house would sell for $1,600,000. You move in and file the claim on time.
| Step | Amount |
|---|---|
| Current taxable value | $200,000 |
| Plus the statutory $1,000,000 | $1,200,000 cap |
| Market value at transfer | $1,600,000 |
| Amount above the cap | $400,000 |
| Your new taxable value | $600,000, being $200,000 plus the $400,000 excess |
So you did not keep her $200,000 base and you did not jump to $1,600,000. You landed in between. Most families I meet assume the exclusion is all or nothing, and budgeting on that assumption produces an unpleasant surprise from the assessor.
Three years, and it can be shorter
The claim has to be filed within three years of the transfer, or before the property is transferred to a third party, whichever comes first. Sell the house to a buyer in month eight without having filed, and the window has already closed. There is also a separate requirement to claim the homeowners' exemption within a year of transfer to show the home is genuinely yours. These are county assessor forms, not court filings, and missing them is a self-inflicted wound.
When there are three of you and only one wants to live there
This is the hardest real-world version. Three siblings inherit, one moves in, two want to be bought out. The occupancy requirement is satisfied by the sibling who lives there, and assessors generally treat the exclusion as applying to that person's interest rather than to the whole property. How your county handles the buyout mechanics, and whether the purchase of the other interests is treated as a change in ownership, is a detail worth getting right before money moves.
Do not improvise this. The sequence of the distribution and the buyout affects the answer, and it is much cheaper to plan the order of operations than to unwind it.
“I had a client keep a house in Eagle Rock she did not want, for two years, purely because the tax number worked. She rented a place near her job and used the house on weekends. The assessor eventually caught it, because they do check, and the bill was retroactive. Do not treat the occupancy rule as a formality.”
Delia Vasquez-HartWhat to do if you are not moving in
Then plan for the real number. At roughly one percent of assessed value plus local voter-approved additions, a jump from a $200,000 base to a $1,600,000 base is several thousand dollars a month in difference over a year. That changes whether keeping the house as a rental pencils out, and for many families the honest answer is that it does not.
Questions we get asked
Does the increase apply if we sell right away?
If you sell, the buyer gets reassessed to their purchase price anyway, so the exclusion is largely irrelevant to you. Selling within the first year is a common and reasonable outcome.
How long do I have to live there?
The exclusion continues while it remains your principal residence. Move out and the protection ends going forward.
Does a trust distribution count as a parent-child transfer?
Yes. Property passing to a child through a trust is treated as a parent-child transfer for this purpose, which is why the trust's distribution provisions matter here.
Is the $1,000,000 figure fixed?
No. It is adjusted biennially, so check the current figure with the assessor when you file rather than relying on a number you read online.
Next step
Look up the property on the Los Angeles County Assessor site and write down the current assessed value, then get a realistic market figure from an agent. Those two numbers give you the actual answer in about ten minutes. Bring them to a free 45-minute consultation at (310) 555-0219.