SB 539 — Property taxation: taxable value transfers.

Summary

The California Constitution generally limits ad valorem taxes on real property to 1% of the full cash value of that property, defined as the county assessor's valuation of real property as shown on the 1975–76 tax bill and, thereafter, the appraised value of the property when purchased, newly constructed, or a change in ownership occurs after the 1975 assessment, subject to an annual inflation adjustment not to exceed 2%. Existing property tax law provides that the purchase or transfer of the principal residence, and the first $1,000,000 of other real property, of a transferor in the case of a transfer between parents and their children, or between grandparents and their grandchildren if all the parents of those grandchildren are deceased, is not a "purchase" or "change in ownership" for purposes of determining the "full cash value" of property for taxation. Existing provisions of the California Constitution, adopted as Proposition 19 by the voters at the November 3, 2020, general election, beginning on and after February 16, 2021, exclude from the terms "purchase" and "change in ownership" for purposes of determining the "full cash value" of property the purchase or transfer of a family home or family farm, as those terms are defined, of the transferor in the case of a transfer between parents and their children, or between grandparents and their grandchildren if all the parents of those grandchildren are deceased, as specified. In the case of a transfer of a family home, existing law requires that the property continue as the family home of the transferee. Existing law authorizes, if certain conditions are fulfilled, the new taxable value, defined as the base year value determined as provided above plus any inflation adjustment, of the purchased or transferred family home or family farm to be the sum of (1) the taxable value of the property, subject to adjustment, as determined as of the date immediately prior to the transfer or purchase, and (2) a portion, if any, of the assessed value of the property, as specified. In the case of property tax benefits provided to a family home under these provisions, existing law requires the transferee to claim the homeowner's or disabled veteran's exemption within one year of the transfer. This bill would implement these newly adopted constitutional provisions, as provided. The bill would require that the principal residence transferred be the principal residence of the transferor, and that it become the principal residence of the transferee within one year of the transfer. The bill would require, in order to claim the exclusion, that a claim be filed with the assessor. Because the bill would require county assessors to provide new services in relation to family farms, it would impose a state-mandated local program. The bill would require the State Board of Equalization to prescribe a form for claiming eligibility for the exclusion to be filed as provided. The bill would require the State Board of Equalization to adopt emergency regulations in order to implement these provisions, as provided. The bill would also provide that a claim filed under this section is not a public document and is not subject to public inspection, except to specified parties. Existing property tax law authorizes, pursuant to constitutional authorization, a person over 55 years of age, or any severely and permanently disabled person, who resides in property eligible for the homeowners' exemption to transfer the base year value of the property to a replacement dwelling, subject to certain conditions and limitations. Existing provisions of the California Constitution, adopted as Proposition 19, beginning on and after April 1, 2021, instead authorizes an owner who is over 55 years of age, severely disabled, or a victim of a wildfire or natural disaster to transfer the taxable value, defined as the base year value determined as provided above plus any inflation adjustment, of a primary residence eligible for either the homeowner's exemption or the disabled veteran's exemption to a replacement primary residence located anywhere in this state, regardless of the value of the replacement primary residence, that is purchased or newly constructed as that person's principal residence within 2 years of the sale of the original primary residence. Under the California Constitution, a person who is 55 years of age or severely disabled may transfer the taxable value of their primary residence up to 3 times. The California Constitution requires that a person seeking to transfer the taxable value of a primary residence under these provisions file an application, containing specified information, with the assessor of the county in which the replacement primary residence is located. This bill, in accordance with the above-described constitutional provisions, on and after April 1, 2021, would authorize any person who is over 55 years of age, any severely and permanently disabled person, or a victim of wildfire or natural disaster who resides in property that is eligible for the homeowner's exemption or the disabled veteran's exemption to transfer the taxable value of that property to a replacement dwelling that is purchased or newly constructed as a principal residence within 2 years of the sale of the original property, as provided. The bill would require that any claim be filed within 3 years of the date that the replacement dwelling was purchased or the new construction of the replacement dwelling was completed. The bill would limit a person to 3 transfers of taxable value under these provisions, except with respect to claims filed by victims of wildfire or natural disaster, and would require each county assessor to report quarterly to the State Board of Equalization specified information regarding all approved claims. By adding to the duties of local tax officials with respect to the transfer of the taxable value of real property, this bill would impose a state-mandated local program. The bill would require the State Board of Equalization to adopt emergency regulations in order to implement these provisions, as provided. The bill would also provide that a claim filed under this section is not a public document and is not subject to public inspection, except to specified parties. 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. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. This bill would take effect immediately as a tax levy.

Bill Text

• Chaptered 09/30/21 - Chaptered Current pdf September 30, 2021
• Enrolled 09/10/21 - Enrolled pdf September 10, 2021
• Amended 07/13/21 - Amended Assembly pdf July 13, 2021
• Amended 05/28/21 - Amended Senate pdf May 28, 2021
• Introduced 02/18/21 - Introduced pdf February 18, 2021
• SB539 View text html

Action History

1. September 30, 2021

   Chaptered by Secretary of State. Chapter 427, Statutes of 2021.

2. September 30, 2021

   Approved by the Governor.

3. September 13, 2021

   Enrolled and presented to the Governor at 3:30 p.m.

4. September 08, 2021

   Assembly amendments concurred in. (Ayes 38. Noes 0. Page 2523.) Ordered to engrossing and enrolling.

5. September 07, 2021

   In Senate. Concurrence in Assembly amendments pending.

6. September 07, 2021

   Read third time. Passed. (Ayes 69. Noes 0. Page 2822.) Ordered to the Senate.

7. August 30, 2021

   Read second time. Ordered to third reading.

8. August 26, 2021

   From committee: Do pass. (Ayes 16. Noes 0.) (August 26).

9. August 26, 2021

   August 26 set for first hearing. Placed on APPR. suspense file.

10. July 13, 2021

    Read second time and amended. Re-referred to Com. on APPR.

11. July 12, 2021

    From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 10. Noes 0.) (July 5).

12. June 10, 2021

    Referred to Com. on REV. & TAX.

13. June 03, 2021

    In Assembly. Read first time. Held at Desk.

14. June 03, 2021

    Read third time. Passed. (Ayes 37. Noes 0. Page 1416.) Ordered to the Assembly.

15. June 01, 2021

    Read second time. Ordered to third reading.

16. May 28, 2021

    Ordered to second reading.

17. May 28, 2021

    Read third time and amended.

18. March 09, 2021

    Read second time. Ordered to third reading.

19. March 08, 2021

    From committee: Be ordered to second reading pursuant to Senate Rule 28.8.

20. March 04, 2021

    Set for hearing March 8.

21. March 03, 2021

    From committee: Do pass and re-refer to Com. on APPR. (Ayes 5. Noes 0. Page 366.) (March 3). Re-referred to Com. on APPR.

22. February 26, 2021

    Set for hearing March 3.

23. February 25, 2021

    Referred to Com. on GOV. & F.

24. February 22, 2021

    Joint Rule 55 suspended. (Ayes 32. Noes 4. Page 272.)

25. February 22, 2021

    (Ayes 32. Noes 4.)

26. February 22, 2021

    Art. IV. Sec. 8(a) of the Constitution dispensed with.

27. February 19, 2021

    From printer. May be acted upon on or after March 21.

28. February 18, 2021

    Introduced. Read first time. To Com. on RLS. for assignment. To print.

Sponsors

• Megan Dahle · Cosponsor
• Gray · Cosponsor
• Hertzberg · Primary
• Benjamin Allen · Cosponsor
• Mike McGuire · Cosponsor
• Megan Dahle · Cosponsor

Votes

Subjects