Current law allows for some exceptions to this general rule. For example, current law allows parents to sell or transfer ownership of their principal residence and up to $1 million of other property to their children without a reappraisal of the property and a corresponding change in its assessed value.
Proposal
This constitutional amendment would extend the existing parent-child exemption from reappraisal to sales or transfers of property between grandparents and grandchildren. These sales or transfers would be exempt only in cases where both parents of the grandchild are deceased, and would apply only to the sale or transfer of a principal residence and the first $1 million of other property. Grandchildren would not be eligible to receive the exemption--or would be eligible to receive only a reduced exemption--if they had already benefited from a purchase or transfer that was exempt from reappraisal.
The new exemption proposed by this measure would apply only to sales or transfers of property occurring after March 26, 1996.
Fiscal Effect
By exempting from reappraisal these grandparent-
to-grandchild property sales and transfers, this measure would reduce property tax revenues to local governments. Because these sales and transfers occur infrequently, the property tax revenue loss would not be significant. After several years, the loss statewide could be about $1 million annually.
Counties, cities, and special districts would bear nearly one-half of the annual revenue loss. The remainder of the loss would affect schools and community colleges, which also receive property tax revenue. Under existing law, losses to schools and community colleges would be made up by the state General Fund.