(1) The California Constitution generally limits ad valorem taxes on real property to 1% of the full cash value of that property. For purposes of this limitation, "full cash value" is defined as the assessor's valuation of real property as shown on the 1975–76 tax bill under "full cash value" or, thereafter, the appraised value of that real property when purchased, newly constructed, or a change in ownership has occurred. The California Constitution specifies various transfers that are not deemed to be a "purchase" or "change in ownership" of a property for these purposes, including the purchase or transfer of a principal residence from parents to their children, or, under certain circumstances, from grandparents to their grandchildren, and the purchase or transfer of the first $1,000,000 of the full cash value of all other real property transferred from parents or grandparents to their children or grandchildren. This measure would limit the exclusion for the purchase or transfer of a principal residence from parents or grandparents to their children or grandchildren as provided, and would require that the principal residence transferred to a child or grandchild continue as a principal residence of the transferee. The measure would also delete the latter exclusion for the purchase or transfer of the first $1,000,000 of the full cash value of all other real property, thereby requiring these properties to be reassessed upon a purchase or transfer to a child or grandchild. The measure would apply these changes to purchases or transfers that occur on or after January 1, 2021. The measure, commencing January 1, 2022, and each January 1 thereafter, would require the county assessor to adjust the amount of the exclusion, as specified. (2) The California Constitution authorizes the Legislature to provide that a severely disabled person and a person over 55 years of age may transfer the base year value, as defined, of property that is eligible for the homeowner's property tax exemption to a replacement dwelling that is of equal or lesser value located within the same county as the property from which the base year value is transferred, and, if a county ordinance so providing has been adopted, to a replacement dwelling that is located in a different county. This measure, on and after January 1, 2021, would instead require the base year value of property eligible for the homeowner's exemption of any person who is severely disabled or over 55 years of age to be transferred to any replacement dwelling, regardless of the value of the replacement property or whether the replacement property is located within the same county. The measure would also prescribe the method for calculating the base year value of a replacement dwelling that is of lesser or greater value than the original property. (3) The California Constitution requires the Legislature to provide for the transfer of base year value, in the case of property that is substantially damaged or destroyed, as defined, by a disaster, as declared by the Governor, to a comparable property within the same county, as specified. This measure, on and after January 1, 2021, would instead require the transfer of the base year value of a property that is substantially damaged or destroyed to any replacement property, regardless of whether that replacement property is comparable, as specified, or whether the replacement property is located within the same county. The measure would also prescribe the method for calculating the base year value of replacement property that is of lesser or greater value than the original property. (4) The California Constitution requires the Legislature, with respect to a qualified contaminated property, as defined, to provide that either (A) the qualified contaminated property may have its base year value transferred to a replacement property that is of equal or lesser value within the same county or, if a county ordinance so providing has been adopted, in another county, or (B) repairs to a substantially damaged structure, or construction replacing a destroyed structure, as a result of the remediation of environmental problems on the qualified contaminated property, does not constitute "new construction," if it is similar in size, utility, and function to the original structure. With respect to the transfer of the base year value to a replacement property under these provisions, this measure, on and after January 1, 2021, would instead require the transfer of the base year value of qualified contaminated property to any replacement property, regardless of whether the replacement real property is of equal or lesser value than the qualified contaminated property or whether the replacement property is located within the same county. The measure would also prescribe the method for calculating the base year value of replacement property that is of lesser or greater value then the original property.
