Does Prop 19 apply when you inherit your parents’ house?

01Does Prop 19 let you keep your parents’ property tax base?

Prop 19 lets a child keep a parent’s tax base on the family home, within limits. Since February 16, 2021, a transfer of a parent’s principal residence to a child is excluded from reassessment if the home becomes the child’s principal residence within one year and the child files the required claims. The child keeps the parent’s factored base year value; if the market value exceeds that value plus a set amount, the excess is added^2,4.

Factored base year value means the base year value plus the annual inflation adjustments, which the Board of Equalization also calls taxable value². When a parent has died, the date of death counts as the date of transfer². For a house a parent bought decades ago, that value can sit far below today’s market value, which is why this rule can weigh heavily on whether keeping the house makes financial sense.

02What counts as a family home, and what must the child do?

A family home is a dwelling that was eligible for the homeowners’ or disabled veterans’ exemption because the parent owned it and lived in it. The child must make it their own principal residence within one year of the transfer and file for one of those exemptions within the same year to receive the exclusion from the transfer date^4,2.

1. 01Confirm the house was the parent’s principal residence, eligible for the homeowners’ or disabled veterans’ exemption⁴.
2. 02Move in as your principal residence within one year of the transfer, which is the date of death when a parent has died².
3. 03File the homeowners’ exemption (BOE-266) or the disabled veterans’ exemption (BOE-261-G) within one year. If it is filed later, the exclusion starts only in the year of filing².
4. 04File the exclusion claim, BOE-19-P, with the county assessor (deadlines below)².

“Children” in the statute includes stepchildren while the stepparent relationship lasts, sons-in-law and daughters-in-law under a similar rule, children adopted before age 18, and certain former foster children⁴. When several children inherit, only one needs to live in the house. The Board of Equalization says the exclusion should be allowed as long as at least one child who received the home lives there and files for the exemption within a year¹.

At least one eligible child must keep living there. If one moves out and a sibling moves in, a new claim is due within one year of the first child’s move-out date². Once no eligible child lives in the house, it takes a new taxable value on the next January 1 lien date: the market value on the date of the inheritance, adjusted for inflation since then^1,4.

03How much value can be excluded? (BOE worked example)

The exclusion covers the factored base year value plus an amount the Board of Equalization adjusts every other year. For transfers from February 16, 2025 through February 15, 2027, that amount is $1,044,586. If the market value at transfer is higher than the sum, the difference is added to the parent’s taxable value^2,3.

Earlier amounts were $1,000,000 for transfers from February 16, 2021 through February 15, 2023, and $1,022,600 from February 16, 2023 through February 15, 2025². If market value is at or below the excluded amount, the child’s taxable value stays at the parent’s factored base year value².

04What happens to an inherited rental or second home?

An inherited rental or second home is generally reassessed. Prop 19 limits the parent-child exclusion to a family home or a family farm, so a rental, a beach house or any other property that was not the parent’s principal residence does not qualify^1,5. The same applies to a family home that no child makes their principal residence².

This is the largest change from the old rules. Under Propositions 58 and 193, the exclusions covered every inherited principal residence plus up to $1 million of other property, such as second homes and business property. Prop 19 replaced them with an exclusion for a family home or farm that continues as the child’s family home or farm⁵. How trusts, partial interests and family farms are treated is fact-specific; an estate attorney should review those cases.

05Which form do you file in Orange County, and by when?

File form BOE-19-P with the Orange County Assessor within three years of the transfer date, and before the property is transferred to a third party. A claim is also timely if it is filed within six months after the Assessor mails a supplemental or escape assessment notice for the transfer².

A late claim still helps. As long as the child owns the property, the exclusion begins with the year the claim is filed². The Orange County Assessor’s family-transfer page links the claim form and lists (714) 834-2727 for questions⁶. Its worked example uses the original $1,000,000 allowance; the current amount is on the Board of Equalization’s Prop 19 page^6,1.

06Does it apply to grandchildren?

Only in a limited case. A grandchild can use the same exclusion only if the grandchild’s parents who are children of the grandparents have died by the date of the transfer. Every other condition is the same, including the one-year move-in rule, and the claim form is BOE-19-G, filed on the same schedule as BOE-19-P^2,4.

07Did anything change in 2026?

As of October 2, 2026, the parent-child rules are unchanged. None of the measures certified for the November 3, 2026 statewide ballot concerns Prop 19, and SB 288, which would have started the one-year move-in clock at the probate court’s final order, was held in committee on August 13, 2026^7,8.

The problem SB 288 addressed remains. The one-year clock runs from the date of death, and a Board of Equalization analysis of the bill notes that probate “generally takes 9 to 18 months from beginning to end”^9,2. Heirs whose parent’s house is going through probate should raise the move-in timing with their attorney early.

The dollar amount is next adjusted for transfers on or after February 16, 2027, under the Board of Equalization’s every-other-year adjustment².

08Keep, rent or sell: how does the tax base change the decision?

The parent’s tax base helps only while a child lives in the house. Keeping it as a principal residence preserves the factored base year value up to the cap. Renting it out or using it as a second home means the exclusion does not apply. Selling ends the question, because a buyer’s purchase sets a new base year value regardless^1,4.

• Keep and live in it: file the exemption and BOE-19-P. Taxable value is the parent’s factored base year value, plus any market value above the cap².
• Keep and rent it out, or use it as a second home: the home does not qualify, so it is reassessed to market value as of the date of death^1,2.
• Move in, then later move out and rent it: the exclusion ends, and on the next January 1 the Assessor enrolls the market value from the date of the inheritance, adjusted for inflation^1,4.
• Sell: the parent’s tax base does not pass to the buyer. For the heirs, the income-tax question is the step-up in basis, which generally resets the home’s basis to its fair market value at the date of death¹⁰.

When one sibling keeps the house and buys out the others, how Prop 19 applies depends on the details of the transfer. Ask the Assessor and an attorney before agreeing terms.