SB 668: Property taxation: change in ownership: inheritance exclusion.

The California Constitution generally limits ad valorem taxes on real property to 1% of the full cash value of that property. For purposes of this limitation, full cash value is defined as, among other things, the appraised value of that real property when a change in ownership has occurred. Existing property tax law provides that specified transfers are not deemed a change in ownership for which if a claim is filed, including, in accordance with the California Constitution, the purchase or transfer between parents and children, and in certain circumstances between grandparents and grandchildren, of the transferors principal residence and the first $1,000,000 of full cash value of all other real property. The California Constitution makes this exclusion inoperative as of February 16, 2021, and, beginning on and after that date, instead excludes the purchase or transfer of a family home or a family farm, as those terms are defined, between parents and their children or, under certain circumstances, grandparents and their grandchildren, subject to certain limitations and restrictions.

This bill would provide that exclude from change in ownership for purposes of property taxation transfers between parents and children and grandparents and grandchildren of the transferors principal residence and the first $1,000,000 of full cash value of all other real property, in a manner similar to the above-described existing statutory provisions governing the purchase or transfer of real property between parents or grandparents and their children or grandchildren, as described above, are inoperative as of February 16, 2023, and repeal those provisions as of January 1, 2024. Beginning on and after February 16, 2023, the bill would implement the above-described constitutional provisions enacted by Proposition 19, in a manner similar to existing law. provisions. The bill would require a person seeking to claim the exclusion under these new provisions to file a claim that includes certain information, certified under penalty of perjury. The bill would provide that the claim is not a public document and is not subject to inspection, except to specified parties. The bill would require the State Board of Equalization to design the claim form. The bill would apply its provisions retroactively to February 16, 2021, make these provisions inoperative as of February 16, 2023, and repeal these provisions as of January 1, 2024. The bill would make legislative findings with regard to its provisions.

Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.

By adding to the duties of local tax officials in administering the inheritance exclusion for purposes of property taxation, and by expanding the scope of the crime of perjury, this bill would impose a state-mandated local program.

This bill would take effect immediately as a tax levy.