California Proposition 193, Tax Implications of Grandparent-Grandchild Property Transfers (1996)
Prop 193 is about what happens to the tax-assessed valuation of a residential property in California when it is sold or transferred between grandparents and grandchildren. Ordinarily, when California residential real estate is sold or transferred, its tax-assessed value is increased to reflect the market value of that transaction whereas if the property doesn't change owners, ts assessed value generally cannot increase by more than 2 percent a year.
Proposition 193 states that under certain conditions, real estate transactions between grandparents and grandchildren are exempt from the general rule that a property's tax-assessed value should be set at a new level when it is sold.
The conditions under which property transfers between grandparents and grandchildren are exempt from tax-assessment increases beyond the 2% cap are:
- When both parents of the grandchild are deceased.
- When the real estate in question is a principal residence.
- The exemption also applies to the first $1 million of other property.
- Grandchildren are not be eligible to receive the exemption if they have already benefited from a purchase or transfer that was similarly exempt from reappraisal.
|I • II • III • IV • V • VI • VII • VIII • IX • X • XA • XB • XI • XII • XIII • XIII A • XIII B • XIII C • XIII D • XIV • XV • XVI • XVIII • XIX • XIX A • XIX B • XIX C • XX • XXI • XXII • XXXIV • XXXV|
Text of measure
The official ballot summary that appeared on the ballot said:
- Amends State Constitution by not requiring new appraisal of real property upon purchase or transfer between grandparents and their grandchild, subject to certain conditions.
- Parents of grandchild must be deceased as of date of purchase or transfer.
- Purchase or transfer of principal residence does not qualify if grandchild already received a principal residence through previous purchase or transfer not requiring a new appraisal.
- $1,000,000 limit on purchases or transfers of real property not requiring new appraisals, includes purchases or transfers between grandparents and grandchild, as well as between parents and children.
The California Legislative Analyst's Office provided an estimate of net state and local government fiscal impact for Proposition 193. That estimate was:
- "Property tax revenue losses to schools, counties, cities, and special districts of about $1 million annually. School revenue losses would be made up by the state General Fund."
Path to the ballot
Proposition 193 was voted onto the ballot by the California State Legislature via Assembly Constitutional Amendment 17 (Statutes of 1994, Resolution Chapter 110).
|Votes in legislature to refer to ballot|
- Official Voter Guide to Proposition 193
- Full text of Proposition 193
- March 26, 1996 California elections results
- PDF of the March 26 voter guide