One of our members recently alerted us to the impact of voter approval of Prop 19 upon annual property taxes imposed on all cabins by the County. (Yes, we do have property taxes on our “Possessory Interest” in the land, and they are covered by Prop 13 which limits increases in assessed valuations for tax purposes, except upon transfer to a new owner, at which time the County can and does a new higher assessment.)
Prior to Prop 19, parent-to-child (or grandchild) transfers of a vacation home ownership to their child permitted the child grantee to escape that assessment increase, and to preserve the same assessed value amount as the parent had (usually significantly below what a non-family buyer would be assessed upon transfer of ownership). However, Prop 19 eliminates that family tax benefit, effective Feb. 15, 2021. Accordingly, some cabin families are considering taking action to transfer ownership (and complying with related filing requirements) prior to that date. Anyone considering that option will need to consult with skilled tax counsel immediately for advice and assistance, as there are specific transfer documents and filings that must be made soon, and there are also other potential reasons and risks to be considered prior to making such a transfer – such as whether or not it is necessary to have the Forest Service process the transfer prior to it being treated as effective for County tax purposes.