- If it is your plan to transfer real property to your children at some point in the future or you have considered making gifts of real property to your children while alive, doing so before Prop 19 becomes effective on February 15, 2021 will have major property tax ramifications for your children.
For reasons listed below, I would like to advise you to contact your financial advisor immediately if you want to gift real property to your children now or in the near future. It is necessary to complete the property transfer prior February 15, 2021 so your children may take advantage of current property tax laws.
- What are the effects of Prop 19? Prior to the passing of Prop 19 you could gift your primary residence to your children and maintain the current property tax levels no matter the value of the home and no matter whether they were going to live in the home or treat it as an investment property. For non-primary residence (investment or vacation) property your children had an exemption up to $1 million of assessed value for keeping the property taxes at your level.
Under Prop 19 there is no property tax reassessment exemption for non-primary residence property. This means any non-primary residence property that you gift to your children or they inherit from you will be reassessed to current full fair market value for property tax reasons.
- Under Prop 19, for the primary residence if, and only if, your children will be making the gifted/inherited property their primary residence-meaning they are going to move into it and live there-there may be no property tax reassessment. Whether or not there will be a reassessment will depend on its current fair market value and its current assessed value. If the fair market value of the property at the time of the transfer exceeds the assessed value by less than $1 million, then your children would take the current assessed value. If the fair market value of the property at the time of the transfer exceeds the current assessed value by $1 million or more, then your children’s assessed value is the current value of the property less $1 million.
Here is a link to an article that covers this issue in more detail as well as the age 55 transfer questions: https://www.jdsupra.com/legalnews/prop-19-passes-preserve-low-property-47713/ and a second link: https://www.aaepa.com/2020/11/planning-for-californias-proposition-19/
- According to CoreLogic, homeowners across the country are gaining significant equity.
- Over the past year, the average homeowner gained $9,800 in equity, growing their overall net worth.
If you’re ready to sell your current house and ready to look for your dream home, contact me to learn how your home equity can help make that possible.
Today we feature three properties in Redwood Estates, Ben Lomond, and Los Gatos mountains that allow multi-generational housing, acreage for spreading out and the proximity of being near major tech hubs and headquarters. The properties in Santa Cruz Mountains offer exceptional views, peace & tranquility – what better place to gather family with a sprawling compound and room to play!
21399 Lee Dr Los Gatos, CA 95033 3 bedroom/ 3 bath 2,535 SqFt, 1 acre lot Listed by Compass at 1.45M
For more info: https://bit.ly/340XLDv
Wonderful neighbors, great community and excellent Los Gatos schools.
Coming Soon – Ben Lomond 3 bedroom / 5 Bath 5,656 SqFt 200+ acres Listed at 4,250,000.
Call me for more details: 831.346.2743
485 Cresci Road Los Gatos, CA 95033
4 bedrooms / 3 bath 3,263 SqFt, 4.5 acres Listed at 1.249 by Coldwell Realty
For more info: https://bit.ly/331c9ws
This property at the time of recording has been on the market for 138 days, but don’t let the days on market worry you about the stigma of ‘something must be wrong with the property’!
Often these mountain properties have longer days on market but also remember we had the CZU fires (Here’s my vlog post https://youtu.be/gLbKNZ9SX9I ) and sometimes new buyers who aren’t used to the features of country living (such as living with septic, well water, foundation inspection, just to name a few) all these new systems can be a bit alarming to ‘city folks’! Having an inspection and becoming familiar with reports is important so buyer and seller know how to proceed.
If you’re interested in any of these listings or interested in discussing what your home is worth, give me a call 831-346-2743 text or voice.
I’ll help you get through any new transitions you’d like to make with ease and confidence so you can focus on what’s important in your life.
831-346-2743 text anytime!
Lynne Watanabe MacFarlane, MCDM, SRES | Realtor
PFAC Silicon Valley affiliate
Intero | A Berkshire Hathaway Affiliate
Last May, the Brookings Institution wrote about the post-Covid19 recovery as having several possible shapes of recovery (Z-shaped, V-shaped, U-shaped, W-shaped, L-shaped, and even the Nike Swoosh) but here are four major financial institutions predictions for recovery (below image).
In a Realtor.com study- we have seen a similar V-Shape recovery, but recently there’s been a deceleration as potential sellers found it harder to list and show their home as wildfires spread through the West coast.
Housing Market Recovery Index Highlights – Week Ending September 12
California has shown that social distancing and economic resilience continue to be key factors driving local differences in the housing recovery. Per Realtor.com’s research, the spread of COVID-19 is closely linked to the housing slowdown, with markets with higher cases per capita more likely to see a bigger impact on supply and the pace of sales. The speed and sustainability of the reopening, and each market’s ability to contain COVID-19, are dictating the speed of recovery across the regions. Finally, resilient economies may have an edge in the housing recovery, and areas with strong job markets before COVID-19, especially those with thriving tech sectors (such as in the SF Bay Area), are seeing buyers and sellers reconnect faster than the rest of the country.
Below are the V-shaped curved found in the northern California communities. Notice the downward trend in Aug – Sept due to the numerous wildfires.
The higher the index value, the higher the level of recovery. The lower the index value, the lower the level of recovery.
Thank you to the brave California Fire Department for coordinating a fantastic job containing many of the fires in California, we applaud their heroic service as many sacrificed their time, energy away from their families to protect people and properties throughout California.
How is your family and how are you handling the aftermath of the fires? I hope you and your family are doing well, but just know that it has effected everyone. It’s been a very rough few weeks here in northern California and the housing market certainly has been effected by the enormity and tragedies around us. Be safe & let me know if there’s anything we can do to assist.
|Lynne Watanabe MacFarlane, MCDM, SRES | Realtor
PFAC Silicon Valley affiliate
Intero | A Berkshire Hathaway Affiliate
The value of your home has never been higher, and the interest rates have never been lower!
Call me to discuss your selling options and purchase options in this HOT market and don’t miss out!
Listing prices in California have risen 34% since January as inventory shriveled amid the pandemic according to Mercury News (click link below.)
California housing market continues recovery as median home price breaks $700,000 mark, C.A.R. reports
– Existing, single-family home sales totaled 465,400 in August on a seasonally adjusted annualized rate, up 6.3 percent from July and up 14.6 percent from August 2019.
– August’s statewide median home price was $706,900 up 6.1 percent from July and up 14.5 percent from August 2019.
– Year-to-date statewide home sales were down 6.8 percent in August.
Seller’s ‘Love Letter’ to a buyer is a good idea – The seller can elaborate about their favorite best features of the property and the memories attached to the home. Also sometimes included in a letter to prospective buyers are neighborhood shops, restaurants, and parks. This love letter from the seller describes the pros and perceived cons and how much they think their home is worth and why. If you’re a seller would you consider writing a buyer love letter to your prospective buyers? Do you think this would benefit the sale of your home?
Leave your comments below and. your questions!
Curious to see the home which seller was referring to?
Check out the post here
Lynne Watanabe MacFarlane, MCDM, SRES, SRS | Realtor PFAC Silicon Valley affiliate Intero | A Berkshire Hathaway Affiliate
Here’s my search for all Saratoga homes listed on the market, click here: