An inherited California house keeps the parent’s low property tax only if a child moves in within one year and files for the homeowners’ exemption, and even then only up to a cap. For deaths from February 16, 2025 through February 15, 2027, the protected amount is the parent’s factored base-year value plus $1,044,586 (Rev. & Tax. Code § 63.2; BOE Letter To Assessors 2025/009). Everything above that is reassessed. A rental, a second home, or a house no child moves into is reassessed to full market value as of the date of death.
Prop 19 is a property tax rule. It isn’t an inheritance tax, and California has neither an inheritance tax nor an estate tax (Rev. & Tax. Code § 13301). What’s at stake is the property tax bill every year after.
If you’re still deciding whether to keep the house at all, start with what to do with an inherited house in California, which compares selling, moving in, renting, a 1031 exchange, and a sibling buyout.
What Prop 19 does to an inherited house
Prop 19 replaced the old parent-child exclusion for transfers on or after February 16, 2021 (Cal. Const. art. XIII A, § 2.1; Rev. & Tax. Code § 63.2). The regulation that implements it is Property Tax Rule 462.520, and the BOE’s most recent guidance is Letter To Assessors 2026/026, issued August 3, 2026, a question-and-answer set on intergenerational transfers.
The family home qualifies when:
- It was the parent’s principal residence, eligible for the homeowners’ or disabled veterans’ exemption.
- It passes to a child (or to a grandchild whose parent, the grandparent’s child, has died).
- The child makes it the child’s own principal residence and files for the homeowners’ exemption, Form BOE-266, within one year of the death.
- Someone files the exclusion claim, Form BOE-19-P (BOE-19-G for a grandchild).
The old Proposition 58 exclusion, which protected any parent-child transfer of a residence with no move-in requirement, still applies only to deaths on or before February 15, 2021 (former Rev. & Tax. Code § 63.1). Anyone quoting it for a recent death is working from dead law.
The cap, worked out
Under Rev. & Tax. Code § 63.2(d), add the exclusion amount to the parent’s factored base-year value (the Prop 13 value, grown by up to 2% a year). If the market value at death is below that total, the child keeps the parent’s value. If it’s above, the excess is added to the parent’s value.
| House A | House B | House C | |
|---|---|---|---|
| Parent’s factored base-year value | $250,000 | $300,000 | $300,000 |
| Market value at date of death | $1,200,000 | $1,400,000 | $2,000,000 |
| Protected amount (base + $1,044,586) | $1,294,586 | $1,344,586 | $1,344,586 |
| Excess over protected amount | $0 | $55,414 | $655,414 |
| New taxable value | $250,000 | $355,414 | $955,414 |
| Annual tax at about 1.1% | about $2,750 | about $3,900 | about $10,500 |
| Annual tax if fully reassessed | about $13,200 | about $15,400 | about $22,000 |
Actual rates vary by tax rate area, usually between 1% and 1.25% of assessed value. The exclusion amount is adjusted every other February 16 using a California house price index. It was $1,000,000 at the start, $1,022,600 for transfers from February 16, 2023 through February 15, 2025, and is $1,044,586 now. The date of death sets which figure applies, not the date the trust distributes or the probate closes. To run your own numbers, use the Prop 19 reassessment calculator.
The exclusion amount by transfer date
| Date of transfer | Amount added to the parent’s factored base-year value |
|---|---|
| February 16, 2021 to February 15, 2023 | $1,000,000 |
| February 16, 2023 to February 15, 2025 | $1,022,600 |
| February 16, 2025 to February 15, 2027 | $1,044,586 |
Use the row that matches the date of death.
Deadlines and forms
| Form | What it does | Deadline |
|---|---|---|
| BOE-502-D | Tells the assessor the owner died | 150 days after death; in probate, when the inventory and appraisal is filed (Rev. & Tax. Code § 480(b)) |
| BOE-266 | Homeowners’ exemption for the child who moves in | Within one year of the death to keep the exclusion |
| BOE-19-P or BOE-19-G | Claims the Prop 19 exclusion | Within three years of the death, and before the house is transferred to anyone else or the child stops living there (Rev. & Tax. Code § 63.2(f)(1)(A)) |
- A slow trustee doesn’t extend anything. The three-year claim period and the one-year move-in window both run from the date of death. The assessor can accept a claim before the trust is distributed (LTA 2026/026).
- A late claim gets partial relief. A claim filed within six months after the assessor mails a supplemental or escape assessment notice is still timely. After that, relief runs only from the January 1 lien date of the year you file, and only if the house hasn’t been sold.
- A late homeowners’ exemption can sink it. If the child moved in on time but didn’t file BOE-266 within the year, and has since sold, the BOE says the exclusion can’t be applied at all (LTA 2026/026).
- Penalty for not filing BOE-502-D. If the assessor asks in writing and nobody files within 90 days, the penalty is $100 or 10% of the new tax, whichever is greater, capped at $5,000 for a house eligible for the homeowners’ exemption unless the failure was willful (Rev. & Tax. Code § 482).
Expect a supplemental tax bill after any reassessment. It covers the rest of the fiscal year at the new value and arrives separately from the regular bill (Rev. & Tax. Code § 75 et seq.). Filing mechanics are covered step by step in how to file the Prop 19 exclusion.
Where to file in Ventura County
The exclusion claim is filed with the county assessor (Rev. & Tax. Code § 63.2(b)). For a Ventura County house, that’s the Ventura County Assessor’s Office, in the Hall of Administration at the Ventura County Government Center, 800 S. Victoria Avenue, Ventura, CA 93009, phone (805) 654-2181. Its forms page carries the homeowners’ exemption claim, BOE-266.
Does a living trust protect me from Prop 19 reassessment?
No. A revocable living trust does not protect an inherited house from Prop 19 reassessment. The BOE looks through the trust to the parent and the child (Rev. & Tax. Code § 63.2; LTA 2026/026), so the result is the same whether the house comes through a trust, a will, or a transfer-on-death deed. A trust avoids probate. It doesn’t change who gets reassessed.
If someone tells you “put the house in a trust and Prop 19 won’t touch it,” they are confused or selling something.
Siblings and unequal trust distributions
Only the parent-to-child transfer is excluded. That one rule decides most sibling situations.
Only one child has to live there. Title can go to all the children, and the exclusion applies as long as one of them makes it a principal residence and files the homeowners’ exemption (LTA 2026/026).
Unequal distributions from a trust can protect the whole house. California lets a trustee distribute different assets to different beneficiaries (Prob. Code § 16246). The BOE treats the whole house as coming from the parent when the child who takes it receives less of everything else, as long as the house’s value doesn’t exceed that child’s share of the entire trust. Anything above that share is treated as coming from the siblings and is reassessed. If the trust names a specific child for the house, the trustee can’t rearrange it.
Buying out siblings after distribution is a sibling transfer. If the house is deeded to three children equally and one later buys the other two out, the two-thirds bought from siblings is reassessed. In one BOE example, two brothers swapped their half interests in two inherited houses after distribution, and each house was 50% reassessed (LTA 2026/026).
A trust loan can fund the siblings’ shares. Some county assessors accept a structure where the trust borrows against the house to pay the other beneficiaries before the house is distributed, as long as the child keeping the house isn’t the lender. The BOE hasn’t addressed this in a Letter To Assessors, so confirm with your county assessor before relying on it. Details in buying out a sibling without losing the Prop 19 basis.
What happens if the child moves out later
The exclusion lasts only while an eligible child lives there. When the child stops qualifying for the homeowners’ exemption, the assessor enrolls the date-of-death market value, grown for inflation, as of the next January 1 lien date (Rev. & Tax. Code § 63.2(a)(1); Property Tax Rule 462.520). If another eligible child moves in within a year, the exclusion can be restored.
Two other moves end the exclusion. Deeding the house into the child’s own LLC is a transfer to a third party, even a single-member LLC. And renting the house out means it’s no longer the child’s principal residence.
Property that wasn’t the parent’s home
A rental, a vacation cabin, or a commercial building gets no exclusion and is reassessed to market value as of the date of death (LTA 2026/026). For a long-held rental, that’s often the largest cost of inheriting it, and a reason to think hard before the family keeps it. See Prop 19 planning for what parents can still do during life.
A family farm is the exception. It qualifies without anyone living there, and the cap applies separately to each legal parcel (Rev. & Tax. Code § 63.2(a)(2)).
Prop 19 and the step-up in basis pull in opposite directions
The income tax rule works in the other direction. An inherited house takes a new basis equal to its value on the date of death (IRC § 1014), so a prompt sale usually produces little or no capital gains tax. Say your mother bought her Ventura County home in 1985 for $120,000 and it’s worth $850,000 when she dies. Sell a few months later for $860,000 and the taxable gain is about $10,000 before selling costs, not $740,000.
Keeping the low property tax requires a child to live there. Capturing the clean sale requires selling. No trust or deed arrangement gets you both. For the income tax side in full, see capital gains tax on inherited property.
What about the mortgage or reverse mortgage?
A regular mortgage survives the death, and federal law bars the lender from calling the loan just because the house passed to a relative (12 U.S.C. § 1701j-3(d)). A reverse mortgage comes due at death; heirs who want to keep the house pay the lesser of the balance or 95% of appraised value. Neither loan changes the Prop 19 analysis. See inheriting a house with a reverse mortgage.
Talk to a real California estate attorney
If you’re holding your parent’s house and trying to work out what Prop 19 will do to it, I’ll run the reassessment math on your actual numbers and tell you which forms are due and when. Talk to Eric Ridley is a free 30-minute consultation by phone or Zoom, anywhere in California. Or call (805) 244-5291.
Frequently asked questions
How much will my property tax be if I move into my parents’ house under Prop 19?
For deaths from February 16, 2025 through February 15, 2027, the new taxable value is the parent’s factored base-year value plus any market value above that base plus $1,044,586 (Rev. & Tax. Code § 63.2). A $1.4 million house with a $300,000 base is reassessed to $355,414, roughly $3,900 a year at a 1.1% rate.
Do all the heirs have to live in the house to keep the Prop 19 exclusion?
No. Only one eligible child has to make the inherited house a principal residence and file the homeowners’ exemption within one year of the death. Title can be held by all the children (BOE Letter To Assessors 2026/026). The exclusion ends when no eligible child lives there anymore.
Does a living trust protect me from Prop 19 reassessment?
No. A revocable living trust does not shield an inherited house from Prop 19 reassessment. The assessor looks through the trust to the parent and child (Rev. & Tax. Code § 63.2), so the house is treated the same as if it passed by will. A trust avoids probate; it is not a Prop 19 workaround.
When is the Prop 19 claim form due?
Form BOE-19-P is due within three years of the parent’s death and before the house is transferred to anyone else or the child stops living there (Rev. & Tax. Code § 63.2(f)(1)(A)). Separately, the child must move in and file the homeowners’ exemption within one year, and the change in ownership statement, BOE-502-D, is due 150 days after death.
What happens to the Prop 19 exclusion if I move out of the inherited house?
The exclusion ends when no eligible child lives in the house as a principal residence. The assessor then enrolls the date-of-death market value, adjusted for inflation, as of the next January 1 lien date. If another eligible child moves in within a year, the exclusion can be restored.
Is Proposition 58 still the law for parent-child transfers?
Only for deaths on or before February 15, 2021. Prop 19 replaced the old Prop 58 exclusion (former Rev. & Tax. Code § 63.1) for later transfers (Cal. Const. art. XIII A, § 2.1; Rev. & Tax. Code § 63.2). Under Prop 19 the child must live in the home, and the protected value is capped.
Does a rental property I inherit get reassessed in California?
Yes. An inherited rental or second home is reassessed to market value as of the date of death, because Prop 19 excludes only the parent’s principal residence and family farms (Rev. & Tax. Code § 63.2). The heir’s plans for the rental don’t change that result.
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