Governor Gavin Newsom signed Assembly Bill 872 by Assembly Member Cecilia Aguiar-Curry (D-Winters) into law on Thursday, Oct. 10. AB 872 expands the existing change-in-ownership exclusion in property tax law, which allows property to be passed down from a parent to a child without being reassessed to a higher property tax value. This new protection will ensure that if a small, family-owned farm was incorporated prior to Prop 58, it will receive the same family heritage protections that proposition intended.
“AB 872 resolves an inequity in California’s complicated reassessment laws by making tax code consistent with the intent of Prop 58 and protects agricultural open space as intended under the Williamson Act,” said State Treasurer Fiona Ma. “Furthermore, it protects children still living in their family home from unfair tax increases, which is significant while we continue to tackle California’s massive housing crisis.”
Prop 13 reformed state property tax laws by reducing property tax rates on homes, businesses and farms by about 57 percent. Eight years later, California voters passed Prop 58, which prevented the triggering of a property tax reassessment when the property was transferred to a child after the death of a parent, except in cases of incorporated property.
Without AB 872 as law, transfers of incorporated property triggered a property tax reassessment that could raise tax bills so much it could be impossible for children to stay in their homes. This narrowly drafted law will make sure that only qualified property would be safe from reassessments, which means it solely applies to families whose home is on a farmstead.
“I am proud to have worked on this important measure that both protects small family farm homesteads and our agricultural open space,” said Assembly member Aguiar-Curry. “Losing a parent is devastating, and the last thing a grieving family should have to worry about at such a devastating time is losing their home due to a sky-rocketing tax bill.”]]>