For Proposition 19 intergenerational transfers occurring on February 16, 2023, through February 15, 2025, the $1 million exclusion amount is adjusted to $1,022,600 to reflect an increase of 2.26%. (BOE News Release 23-03 (March 7, 2023))
The BOE is required to calculate and publish the adjustment every other year based on the Federal Housing Finance Agency’s House Price Index for California. This is the first adjustment since the passage of Proposition 19 in November 2020.
Under Proposition 19, for transfers on or after February 16, 2023:
- In order to qualify for the principal residence exclusion, the receiving child must use the residence as their own principal residence, and only the first $1,022,600 of additional assessed value is excluded; and
- The non-principal residence exclusion has been completely eliminated. However, the principal residence exclusion will apply to transfers of family farms.