Decision ’96 : Yes on Inheritance Rule Change

Should grandparents who outlive their children be allowed to pass on property to grandchildren without a change in the tax assessor’s valuation of the property? Californians are allowed such an exemption from reassessment when they sell to or give their children their principal residence and up to $1 million in other real property. When a generation is skipped because of death, it is logical to extend this exemption. Proposition 193, on the March 26 ballot, would do just that.

The measure would amend the state Constitution to add grandparent-to-grandchild property sales or transfers to the list of transactions exempted from Proposition 13 requirements.

The parent-child exemption was passed by voters in 1986 to enable children to better afford property they inherited. Under 193, both parents of the grandchild must be deceased as of the date of the transfer. The purchase or transfer of a principal residence would be allowed only once.

The legislative analyst’s office, noting that such transfers are infrequent, said the loss of property taxes statewide to counties, cities, special districts and schools eventually would be only about $1 million annually. Under current law, the school revenue losses would be made up from the state general fund.

Opponents say allowing yet another exemption would worsen the inequities that already exist under Proposition 13. But such exceptions often have been made since 13 was passed in 1978. Vote yes on Proposition 193.