Prop 19 Tax Break for Family Property Transfers Gets a Small Boost

If you’re thinking about transferring your home or family farm to your kids or grandkids, there’s some good news out of Sacramento.

The California State Board of Equalization (BOE) just announced a small increase to the property tax exclusion under Proposition 19. Starting February 16, 2025, and running through February 15, 2027, the exclusion amount will go up from $1,022,600 to $1,044,586 — a 2.15% increase.

What Is Prop 19?

Prop 19 is a California law that allows parents to transfer their primary residence (or a family farm) to their children without triggering a big jump in property taxes, as long as the child keeps the home as their primary residence. In cases where both parents are deceased, grandparents can also transfer the property to their grandchildren under the same rules.

Normally, when a property changes hands, the county reassesses it at current market value — often leading to a major increase in the annual property tax bill. But under Prop 19, the transferee gets to keep the existing property tax base (known as the “base year value”), plus up to an additional $1,044,586 in market value, without triggering reassessment.

Why the Change?

The BOE is required by law to update this exclusion amount every two years based on California’s housing market. This is only the second time they’ve done so since Prop 19 passed in 2020.

The adjustment is small, but it still matters. It means families can transfer slightly higher-value properties to the next generation without losing their low property tax base.

A Few Key Things to Keep in Mind

• The new exclusion amount applies to transfers made between February 16, 2025, and February 15, 2027.

• The child or grandchild must live in the home as their primary residence or continue operating it as a family farm.

• They must apply for the Homeowners’ or Disabled Veterans’ Exemption within one year of the transfer to qualify.

• If the market value exceeds the base year value + the $1,044,586 cap, only the excess is subject to reassessment.

Final Thoughts

Even though the increase isn’t huge, it can still lead to meaningful tax savings for families looking to keep property in the family. These kinds of transfers can be complicated, so it’s always a good idea to speak with your tax, or legal professional to understand how the rules apply in your specific situation.

For the official update, the BOE issued Letter to Assessors No. 2025/009, and you can find more details on their website.