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Grandparent to Grandchild Transfer Exclusion

Sonoma County Neighborhood

Voters passed Proposition 19 in November 2020. This legislation affects Parent-Child and Grandparent-Grandchild exclusions and Base Year Value Transfers. This legislation is currently being reviewed by the State Board of Equalization (BOE) for guidance and regulations. The Assessor’s Office will not be able to answer detailed questions about the legislation at this point in time. Visit the BOE’s Proposition 19 page for the most up to date information. 

Overview

The grandparent to grandchild exclusion allows certain transfers from grandparents to grandchildren to be excluded from reappraisal. 

The grandparent to grandchild exclusion is an extension of the parent-child exclusion to be used in situations where the parent of the grandchild has predeceased the grandparent. This exclusion only applies to transfers from grandparent to grandchild (one direction).

Proposition 19 (Current Law)

Effective February 16, 2021

Applies to:

  • Transfers between grandparent(s) and grandchild(ren) - both ways
  • A family home that is the principal residence of transferor and transferee
    • Must file for homeowner's exemption within 1 year of transfer
  • A family farm and must continue as a family farm of the transferee
  • Value limit of current taxable value plus $1,000,000 (as annually adjusted)

Proposition 193

March 27, 1996 to February 15, 2021

The following types of real property transfers may be excluded:

  • Transfers of primary residences (no limit)
  • Transfers of the first $1 million of real property other than the primary residences.

The exclusion applies only to real property transfers between eligible grandparent and grandchildren, not legal entities. In order to qualify, all the parents of the grandchild must be deceased as of the date of purchase or transfer. Parents are those persons who qualify under section 63.1 as the children of grandparents. However, for transfers that occur on or after January 1, 2006, a son-in-law or daughter-in-law of the grandparent that is a stepparent to the grandchild need not be deceased in the meeting the condition that "all of the parents" of the grandchild must be deceased. The grandparent to grandchild exclusion does not apply when a parent disclaims their interest.

Current Law vs. Proposition 19

  Proposition 193 (Prior Law) Proposition 19 (Current Law)
Principal Residence
  • Principal residence of transferor
  • No value limit
  • Residence and homesite (excess land may be excluded as "other property")
  • Principal residence of transferor and transferee
  • Value limit of current taxable value plus $1,000,000 (as annually adjusted)
  • Family homes and farms
Other Real Property
  • Transferor lifetime limit of $1,000,000 of factored base year value
  • Eliminates exclusion for other real property other than the principal residence
Grandparent-Grandchild Middle Generation Limit
  • Parent(s) of grandchild, who qualifies as child(ren) of grandparent, must be deceased on date of transfer
  • No change:  parent(s) of grandchild, who qualifies as child(ren) of grandparent, must be deceased on date of transfer
Filing Period
  • File claim within 3 years or before transfer to third party
  • File for homeowners' exemption within 1 year of transfer
Implementing Statute
  • Revenue & Taxation Code section 63.1 (implements Propositions 58/193)
  • To be determined
Important Dates
  • Through February 15, 2021
  • Effective February 16, 2021

 

Note: The information presented is intended to provide general and summary information about Proposition 19. It is not intended to be a legal interpretation or official guidance or relied upon for any purpose, but is instead a presentation of summary information. If there is a conflict between the information presented and the text of the proposition or its implementation, the text of the proposition or legal interpretation will prevail. It is highly encouraged that you consult an attorney for advice specific to your situation.

 

Proposition 193 (Prior Law)

Timely Filing Requirements

To get relief retroactive to the date of transfer, a completed claim must be filed with the Assessor's office by the earliest of the following:

  • Within three years of the transfer
  • Prior to transferring to a third party

If a notice of supplemental or escaped assessment is mailed after either of these periods have passed, then the transferee has an additional six months from the date of the notice to file a claim. 

Prospective Relief

If the transferee has not transferred the property to a third party, applications may still be filed at any time after the three-year deadline; however, those filed after three years will only become effective for the lien date in the assessment year in which they are filed and will not be retroactive to the date of transfer.

More Information

State Board of Equalization Property Taxes Department

Grandparent to Grandchild Frequently Asked Questions

Proposition 19 Information

California Legislative Information

Revenue and Taxation Code Section 63.1