Inheriting a parent's house in Sacramento County under Prop 19
Under Proposition 19, a child who inherits a parent's house keeps the parent's property tax base only if the child moves in, within one year, and files for the homeowners' exemption within that same year. If nobody moves in, the house is reassessed to its market value as of the date of death. If the exemption is filed late, the family loses the benefit for the time before the filing. The rest of this page is detail, and some of it moves the bill by thousands of dollars a year.
I fielded a lot of these questions after 2021, usually from grieving people holding a form they did not understand. Here is the version I wish I could have handed them.
What changed on Feb. 16, 2021
Before Prop 19, transfers between parents and children fell under Propositions 58 and 193, which were more generous. Those older rules still apply to transfers and deaths on or before Feb. 15, 2021. For anything after that, the Board of Equalization's Prop 19 page lays out a much narrower exclusion:
- It covers a family home or a family farm. Rental houses and second homes do not qualify.
- The home must have been the parent's principal residence.
- It must become the child's principal residence.
- Grandchildren qualify only when their own parent, the grandparent's child, has died.
The two one-year deadlines
The clock starts on the date of death. In a recent letter to county assessors, the Board's Prop 19 questions and answers (Letter to Assessors 2026/026) is blunt about the move-in rule: the home has to become the child's principal residence within one year, and it says there are no exceptions.
The second deadline is paperwork. The child must file for the homeowners' exemption (form BOE-266), or the disabled veterans' exemption, within one year. Separately, the exclusion claim itself (BOE-19-P for parent to child, BOE-19-G for grandparent to grandchild) is due within three years of the death or before the house is transferred to anyone else, whichever comes first. File late and you get relief only from the year you file, not back to the date of death.
A few points that surprised people at my counter:
- Only one child has to live there. If three siblings inherit and one moves in, the whole house can qualify, as long as every new owner is an eligible child.
- An LLC is not a child. Deeding the house into a company counts as a transfer to a third party and ends eligibility.
- If the child who lives there moves out, a sibling can keep the exclusion by moving in within a year.
The value cap
Prop 19 also limits how much value can pass untaxed. The cap is your parent's factored base year value plus $1 million, adjusted every two years.
The factored base year value is the number the Assessor already uses: the value set when your parent bought or built, raised by inflation or 2 percent a year, whichever is less. The Sacramento County Assessor's Prop 13 page explains it.
The $1 million part moves with the California house price index. For transfers from Feb. 16, 2025 through Feb. 15, 2027 it is $1,044,586, according to the Board's March 2025 announcement. The next adjustment is due Feb. 16, 2027.
If the house was worth more than the cap on the date of death, only the amount above the cap gets added to the old value. With a factored value around $200,000, the house would have to be worth more than about $1.24 million before the cap mattered at all.
A worked example
For property tax I use 1 percent of assessed value, which is the base rate under Prop 13, plus an illustrative 0.1 percent for voter-approved bonds. The Assessor says rates average roughly 1.1 percent countywide. Your real add-on depends on the bonds where the house sits, and flat charges on the bill are left out here.
Worked example, not a real parcel. House A has a factored base year value of $180,000 and was worth $650,000 at the date of death. House B has $210,000 and $1,450,000. The cap uses $1,044,586 for deaths from Feb. 16, 2025 to Feb. 15, 2027.
| Scenario | Annual tax at 1.1 percent |
|---|---|
| House A, child moves in | $1,980 |
| House A, nobody moves in | $7,150 |
| House B, child moves in | $4,460 |
| House B, nobody moves in | $15,950 |
Source: Value cap from the California State Board of Equalization; tax rate illustration based on the Sacramento County Assessor's 1.1 percent average; author's arithmetic.
House A is the simpler case. Its cap is $180,000 plus $1,044,586, or $1,224,586. The house is worth $650,000, well under that, so the child keeps the $180,000 value and pays about $1,980 a year. If nobody moves in, the house is reassessed to $650,000 and the bill is about $7,150.
House B shows a partial reassessment. Its cap is $1,254,586. The house is worth $1,450,000, so $195,414 is over the cap. That amount is added to the old value for a new taxable value of $405,414 and a bill of about $4,460. Without the exclusion it would be about $15,950.
How each situation comes out
| Situation | What the Assessor does |
|---|---|
| Child moves in within a year and files the exemption within a year | Keeps the parent's factored base year value, plus any amount over the cap |
| Nobody moves in, house kept as a rental or left empty | Reassesses to market value as of the date of death |
| Child moves in, later moves out | Removes the exclusion and enrolls the date-of-death value, adjusted for inflation, on the next Jan. 1 lien date |
| A sibling moves in within a year after that | The exclusion can continue |
| Death or transfer on or before Feb. 15, 2021 | Old Prop 58 and 193 rules apply |
| House deeded to an LLC | Treated as a transfer to a third party, so no exclusion |
| Heirs sell to an outside buyer | The buyer is reassessed at the purchase price |
If the heirs sell instead
Plenty of families decide nobody is moving in. Maybe everyone lives out of town, or the house needs more work than anyone can take on. Here is what that does to the property tax.
The buyer is reassessed at the purchase price, as with any sale. For the months the heirs owned the house, it depends on what they did. The Board's letter covers this case. If a child did move in and filed the homeowners' exemption within a year of the death, the exclusion can apply for the period up to the sale, as long as the claim was filed on time. If nobody moved in, the Assessor will reassess to the date-of-death value. Expect supplemental bills to cover the time between the death and the sale, sometimes many months later.
Those supplemental bills catch a lot of estates off guard. If the plan is to sell, ask the estate's escrow or attorney to set money aside for it.
Families who decide to sell an inherited house fast generally weigh a listing against a direct sale. Lorris Home Buyers, which lists inherited and probate houses among the ones it buys, walks through how a direct sale to a buyer works. Get an agent's opinion of value too, so you have two numbers to put side by side.
Family farms
A family farm qualifies without the residence rule. The Sacramento County Assessor's Prop 19 FAQ says the child does not have to live there, but the land has to keep being used as the family farm. The Board defines a farm as land under cultivation, used for pasture or grazing, or used to produce a commercial agricultural product.
The value cap applies to each legal parcel of the farm separately. Only the exclusion claim is needed, since there is no homeowners' exemption to file for land nobody lives on. If a house sits on the farm and the child lives in it, the house and its homesite can qualify as the family home while the rest qualifies as farm. Once the land stops being farmed by an eligible child, the exclusion comes off and a supplemental assessment follows.
A checklist for the first year
- Write down the date of death. Both one-year deadlines run from it.
- Decide as a family whether anyone will live in the house, and who.
- If someone will, have them move in and file the homeowners' exemption well inside the year.
- File BOE-19-P (or BOE-19-G) within three years, and before any sale or transfer to a company.
- Find your parent's factored base year value on an old tax bill or by asking the Assessor at (916) 875-0700.
- If the child who lives there moves out later, tell the Assessor.
I am not an attorney or a tax adviser. Inheritance also raises income tax and title questions this page doesn't cover, so check with a probate attorney or tax professional before you sign anything.
Of all the paperwork, the homeowners' exemption claim matters most. File it late and the exclusion only counts from the year you filed, which on a house like House A can mean several thousand dollars gone.