Decision Tool · California

Sell Before Prop 19?

Compare two paths — sell now and gift cash, or hold and pass to your kids — accounting for capital gains, stepped-up basis, and Prop 19 reassessment.

All numbers shown are estimates only. They are not tax, legal, or financial advice. Consult a licensed California real estate agent and a CPA before relying on any figure for a real transaction.

1 · Property

Current value Original purchase price Capital improvements Years owned

2 · Parent's tax bracket

Filing status

Federal LTCG rate

California marginal income tax

3 · Future plans

What will the kids do with the home?

Annual appreciation (assumed)

Investment return on gifted cash

Years until transfer / inheritance

Your Decision

Tell us about the property + plans. We'll compare both paths over your time horizon.

The short answer

Because Prop 19 ended the old parent-to-child tax-base transfer for homes that heirs don’t live in, families sometimes compare keeping a property for the next generation against selling it. The decision turns on whether your child will actually live in the home (preserving a reduced tax base under the new $1 million cap) versus inheriting a property that would be reassessed to market value and carry a much higher tax bill.

Frequently asked questions

It depends on how your children will use it. If a child will move in as their primary residence, they may keep a reduced tax base (subject to the $1 million cap). If the home would become a rental or second home, it gets reassessed to market value — and selling or other estate-planning strategies may make more financial sense. This is a question for an estate attorney and CPA.

When a qualifying child inherits and lives in a parent’s home, they keep the parent’s assessed value plus $1 million. If the market value exceeds the old assessed value by more than $1 million, the amount above that is added to the tax base, partially reassessing the home.

The parent-to-child reassessment changes took effect February 16, 2021, so the older, more generous rules are no longer available. There is no future deadline to “beat” now, but families with appreciated property often revisit their plans because the tax outcome for heirs changed substantially.

Possibly — trusts, gifting strategies, or having an heir occupy the home can all change the result. Each has trade-offs in taxes, control, and flexibility, and the right choice is highly personal. Treat this tool as a starting point and confirm any strategy with a qualified estate-planning attorney.

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