The Inheritance Mistake I See LA Families Make Every Year
Most people assume that when they inherit their parents' house, the low property taxes come with it.
For decades that was true. It isn't anymore. And the families who find out the hard way usually find out at the worst possible moment.
Here's what actually happens now under Prop 19.
What Prop 19 Changed
Proposition 19 passed in November 2020 and took effect February 16, 2021. Before that, a parent could pass a home to a child and the child kept the parent's assessed value. No reassessment, no conditions.
That protection is mostly gone. What's left is narrow, and it comes with conditions:
The child has to move into the home as their primary residence within one year of the transfer.
Even then, the protection only covers the parent's assessed value plus a capped amount, currently just over $1 million, adjusted every two years for inflation.
Anything above that gets added to the new assessed value.
If it's a rental, a second home, or nobody moves in, there's no break at all. Full reassessment to market value, day one.
The math on a Brentwood house
Say your parents bought in Brentwood in the 1980s. Their assessed value is $300,000, so they're paying somewhere around $3,750 a year. The house is worth $2.5 million today.
If you move in within a year and file the claim correctly, you don't keep the $300,000 base. Your new assessed value is roughly $1.46 million, the market value minus the capped exclusion. At LA rates, that's about $18,000 a year.
If you don't move in, you keep it as a rental, or you and your siblings can't agree, or the year slips by, the house is reassessed at the full $2.5 million. That's roughly $31,000 a year.
Either way, the jump is permanent. It isn't a one-time hit. It's every year you own it.
Why it breaks families, not just budgets
I've watched this play out. A parent passes, the kids want to keep the house, and a few months later the new tax bill shows up and the math stops working.
The house becomes a monthly drain instead of the gift it was supposed to be. Then siblings start arguing about who's covering what, and a family that agreed on everything suddenly doesn't. None of it is really about the house. It's about a tax bill nobody planned for.
The frustrating part is how avoidable it is. The law is the law, you can't change it. But you can plan around it if you know the rules before anyone passes, not after.
Two things worth doing now
Have the conversation while your parents are here. Who wants the house, who's actually going to live in it, and does keeping it even pencil once the taxes reset. Awkward, but far less awkward than sorting it out during a funeral.
Talk to an estate attorney and a CPA. There are trust structures and timing strategies that can protect a lot of this, but they only work if they're set up in advance. I'm happy to point you to people I trust who do this for LA families.
Where the "Fix Prop 19" effort stands
There has been a push to soften these inheritance rules at the ballot box. The most recent one, "Fix Prop 19 to Save Our Children's Future," was cleared to gather signatures in late 2025 and needed 874,641 valid signatures to make the November 2026 ballot. As of this writing, it has not qualified. Two earlier attempts, in 2022 and 2024, also fell short.
Read that as: plan under the rules that exist today. If something changes, I'll let you know.
I walk through all of this in more detail in the full video, it's on the Paul Salazar Group YouTube channel.
FAQ
When did Prop 19 take effect? February 16, 2021. Transfers that happened before that date are governed by the old rules.
If I inherit my parents' house, do I keep their property taxes? Only partly, and only if you move in as your primary residence within one year of the transfer. Even then, the protection is capped, you keep the parent's assessed value plus just over $1 million of value. Anything above that is added to your new assessed value.
What is the current exclusion amount? It's indexed to inflation and adjusted every two years. It started at $1 million in 2021 and now sits just above that. Your county assessor publishes the figure that applies to the date of transfer.
What if I inherit a rental property or a second home? There's no exclusion. The property is reassessed at full market value.
Do all the siblings have to move in? No. The rules turn on at least one eligible child occupying the home as a primary residence. How that works in a multi-sibling situation is exactly the kind of detail to run past an estate attorney before anything is signed.
Is there a deadline to file? Yes. The intergenerational transfer claim is filed with the county assessor, and there are time limits tied to the date of transfer. Missing them can cost you the exclusion even if you qualified.
Does a trust protect me from Prop 19? A trust doesn't exempt you by itself. What it can do is control the timing and structure of the transfer. That only helps if it's set up before a parent passes.
Let's talk it through
Paul Salazar | Paul Salazar Group at Compass | 📞 310-387-1976 | ✉️ info@paulsalazargroup.com | 🔗 paulsalazargroup.com | DRE #01763227 | 20+ years in Westside residential real estate and over $800M in career sales across Santa Monica, Brentwood, Mar Vista, Venice, Marina del Rey, and Pacific Palisades.
