San Diego County & California

California property tax inheritance

Prop 19 inheritance rules for a parent's home

  • The Assessor keeps the parent's assessed value for a child who moves in, excluding up to $1,044,586 of added market value (2026).
  • The child must make the home a principal residence and file a homeowners' or disabled veterans' exemption within a year, or the Assessor reassesses at market value.
  • The Assessor grants the exclusion only on a claim, filed within three years of the transfer or before a sale to someone else.

First step: file the homeowners' exemption on the inherited home within a year of the transfer, since the Assessor requires that filing for the exclusion.

Since February 16, 2021, under Proposition 19, a son who keeps his Clairemont house and rents out the inherited Point Loma home pays tax on its market value.

California property tax inheritance rules under Prop 19

  • The Assessor keeps the old assessment only on a family home or family farm, and only while the child lives there as a principal residence.
  • The Assessor reassesses rentals, second homes and commercial property transferred since February 16, 2021 at market value.
  • A grandchild qualifies when the grandchild's parents who are the grandparents' children have died by the date of transfer.
  • The Assessor accepts property held in a parent's trust, with the trust documents, and refuses property held by a corporation or partnership.

Prop 19 parent-child exclusion amount

Transfer dateExclusion above the parent's assessed value
February 16, 2023 to February 15, 2025$1,022,600
February 16, 2025 to February 15, 2027$1,044,586
  • The Board of Equalization resets the amount every two years from the Federal Housing Finance Agency's House Price Index for California.
  • For a home worth more than the parent's taxable value plus the cap on the transfer date, the Assessor adds the excess to the old value.

Inherited property tax for a Point Loma home bought in 1988

A daughter who inherits a Point Loma home in 2026, taxable at $400,000 and worth $1,600,000, moves in and files the exemption within a year:

  • Taxable value plus the exclusion: $400,000 + $1,044,586 = $1,444,586
  • Excess over that: $1,600,000 − $1,444,586 = $155,414
  • New taxable value: $400,000 + $155,414 = $555,414
  • Tax at the County's 2025-26 average rate, before the homeowners' exemption: $555,414 × 1.16729 percent = $6,483.29 a year
  • Tax on a full reassessment: $1,600,000 × 1.16729 percent = $18,676.64 (2026)

How to file a parent-child exclusion claim in San Diego County

  1. Complete the Assessor's Parent-Child Exclusion Application.
  2. Attach the trust documents when the home passed through a trust.
  3. Email the claim to ARCCPC@sdcounty.ca.gov, or mail it to the Intergenerational Exclusion Unit, 1600 Pacific Highway, Suite 103, San Diego, CA 92101.
  • The Assessor accepts a claim within three years of the transfer or death, or before a sale to a third party.
  • After a supplemental or escape notice, the Assessor accepts a claim within six months of its mailing.
  • On a later claim before any sale to a third party, the Assessor grants the exclusion from the year of filing, with no refund for earlier years.
  • To head off a supplemental tax bill, the child files as soon as possible after the transfer or death.
  • The Intergenerational Exclusion Unit answers questions at 619-531-5848.

When to hire a CPA for an inherited home

Bring in a CPA before moving in when the child may sell within a few years. The IRS sets an inherited home's basis at its market value on the date of death, a rule separate from the property tax exclusion. Vet a firm using how to choose a CPA.

Sources:

  • San Diego County Assessor: Parent to Child Exclusion page
  • State Board of Equalization: news release NR 25-02
  • San Diego County Auditor and Controller: 2025-26 tax rate book, historical statistics
  • Internal Revenue Code section 1014 (basis of inherited property)