California Real Estate Resources & Guides

Guide 01 — Property Tax Law

Proposition 19 Complete Guide

Passed in 2020 and implemented in February 2021, Prop 19 fundamentally changed how California handles property tax reassessment for inherited homes and senior transfers.

⬥ Key Takeaways

Inherited homes are now reassessed unless the heir uses it as their primary residence
The $1M exclusion cap limits how much tax protection heirs can claim
Seniors 55+ can transfer their tax base to any home in California, up to three times
Claims must be filed with your county assessor — not through escrow
Deadlines are strict — missing them triggers full reassessment

Who Prop 19 Affects

Prop 19 impacts three primary groups: families transferring property between generations, seniors moving to a new primary residence, and homeowners who lost their property in a wildfire or natural disaster.

Families Inheriting Property

Tax reassessment rules
Primary residence requirements
$1M exclusion explained
What happens if you rent it out

Seniors (55+) Moving

Tax base transfer anywhere in CA
Use the benefit up to 3 times
Applies to downsize or upgrade
Works on primary residence only

Wildfire / Disaster Victims

Replace destroyed home with tax base intact
One-time use benefit
Must buy replacement within 2 years

The $1 Million Exclusion Rule

When a child inherits a home worth more than $1M above the parent's assessed value, only the first $1M is excluded. The remainder is reassessed at current market rates. This is one of the most misunderstood rules in Prop 19.

Step-by-Step Filing Process

Property transfer or deed change occurs
File a Homeowners' Exemption (BOE-266) within 30 days
File the Prop 19 exclusion claim (BOE-19-P for parent-child, BOE-19-B for base-year transfer)
County assessor reviews your claim
Tax base is adjusted — or reassessment letter is issued if ineligible

Common Mistakes That Trigger Reassessment

Renting out the inherited property — immediately triggers reassessment
Missing the filing deadline with the county assessor
Confusing the $1M exclusion as covering all properties regardless of value
Assuming the exclusion is automatic — it is NOT, you must file
Allowing siblings who don't occupy the home to claim the exclusion

◆ Prop 19 Eligibility Check

Did you inherit the property?

YES — Possible exclusion

NO — Consider Prop 19 base transfer

Will you live in it as your primary residence?

YES → File claim with county assessor

NO → Full reassessment at market value

Is home value within $1M of parent's assessed value?

YES → Full tax base protection

NO → Partial reassessment on excess

◆ Tax Reassessment Impact

Inherited home — $1.5M market value / $300K parent's assessed value

Old Tax Base

$3,000

Annual property tax
(Parent's rate)

After Reassessment

$18,750

Annual property tax
(1.25% of market)

Filing correctly can preserve the $3,000 base rate.

◆ Prop 19 Filing Timeline

Day 0

Property transfer / deed change occurs

Within 30 Days

File Homeowners' Exemption (BOE-266)

Within 1 Year

File Prop 19 exclusion claim (BOE-19-P or BOE-19-B)

County Review

County assessor reviews and approves or denies

Outcome

Tax base adjusted — or reassessment applied

Guide 02 — Investment Real Estate

Income Property Investor Guide

From first-time rental owners to experienced portfolio builders — understand how to evaluate, acquire, manage, and exit California income-producing real estate.

⬥ Key Takeaways

Cap rate = Net Operating Income ÷ Purchase Price
Vacancy rate and expense ratio are critical to cash flow
California landlord-tenant laws are strongly tenant-protective — know them before you buy
Depreciation is a powerful tax benefit for rental property owners
A 1031 exchange lets you exit and upgrade without paying capital gains tax

Types of Income Property

Single-family rentals — easiest to finance, easiest to sell
Duplex / multi-family (2–4 units) — residential financing, multiple income streams
5+ unit apartment buildings — commercial financing, higher yield potential
Short-term rentals (Airbnb, VRBO) — higher gross income, local regulation risk
Mixed-use property — commercial + residential, complex but rewarding

Who This Guide Is For

First-Time Investors

How rental income works
Financing basics (DSCR loans, conventional)
Property management options

Portfolio Builders

Value-add acquisition strategies
Cap rate vs. cash-on-cash return
Using equity to scale

Owners Considering Selling

Capital gains tax implications
1031 exchange eligibility
Market timing strategies

Buying Income Property — Step by Step

Define your investment criteria (location, property type, budget)
Get pre-approved for investment financing
Analyze deals using NOI, cap rate, and cash-on-cash return
Conduct property inspection and review rent rolls
Open escrow and complete due diligence
Close and transfer title

California Landlord Considerations

AB 1482 rent control applies to many multi-family properties
Tenant eviction protections are extensive — plan before buying
Security deposit limits and habitability standards are strictly enforced
Local rent control (Los Angeles, Riverside, etc.) may add restrictions

◆ Cap Rate Formula

Net Operating Income (NOI)

Purchase Price

= Cap Rate

Example: $60,000 NOI ÷ $1,000,000 = 6% cap rate

◆ How NOI Is Calculated

Gross Rental Income

−

Vacancy Loss

−

Operating Expenses

= Net Operating Income

◆ Investment Acquisition Funnel

Step 1

Market Research

Step 2

Financial Analysis

Step 3

Due Diligence

Step 4

Offer & Negotiation

Step 5

Closing

Guide 03 — California Probate Code

Probate Sale Complete Guide

When a California property owner passes without a trust, the estate typically enters probate — a court-supervised process that governs how the property is sold or distributed.

⬥ Key Takeaways

Probate is required when property is not held in a trust or joint tenancy
The court must confirm most probate sales — a process that includes overbidding
California probate typically takes 9–18+ months
Buyers can finance probate property — it is not cash-only
The minimum overbid is calculated as: Accepted Offer × 1.10 + $500

When Probate Is Required

Decedent owned property in their name alone (no trust, no joint tenancy)
Estate value exceeds $184,500 (California 2024 threshold)
There are creditors' claims or disputes among heirs
No valid beneficiary designation was made

Who This Guide Is For

Executors & Administrators

Your legal responsibilities
Listing and selling the property
Court confirmation requirements

Heirs & Beneficiaries

What to expect from the process
Distribution timeline
Prop 19 implications

Property Buyers

How probate bidding works
Court confirmation overbid process
Deposit requirements

Court Overbidding Explained

California probate sales include a court confirmation hearing where outside buyers can overbid the accepted offer. The minimum overbid formula is:

Accepted Offer × 110%

$500

= Minimum Overbid Amount

At the hearing, buyers must appear with a cashier's check for 10% of their overbid amount. The highest bidder wins.

Common Probate Challenges

Multiple heirs with conflicting interests about sale timing or price
Property sold in as-is condition — limited disclosures
Court scheduling delays can extend the timeline 3–6 months
Creditors' claims must be satisfied before heirs receive distributions
If the estate owes back taxes, these must be resolved at closing

◆ California Probate Sale Timeline

Month 1

Death — Probate petition filed with the court

Month 2–3

Executor appointed; estate assets inventoried

Month 3–5

Property listed for sale; marketing period

Month 5–6

Offer accepted; petition for court confirmation filed

Month 6–8

Court confirmation hearing — overbidding process

Month 8–9+

Escrow closes; proceeds distributed to heirs

◆ Court Confirmation Process

Step 1

Offer Accepted by Estate

Step 2

Court Hearing Scheduled (30–45 days)

Step 3

Overbidders Appear with Cashier's Check

Step 4

Judge Confirms Highest Bid

Step 5

Escrow Opens — 30–45 Day Close

Guide 04 — Internal Revenue Code Section 1031

1031 Exchange Complete Guide

A 1031 exchange allows real estate investors to sell an investment property and defer capital gains taxes by reinvesting the proceeds into another like-kind property — one of the most powerful tax strategies available.

⬥ Key Takeaways

You have 45 days from closing to identify replacement properties
You have 180 days from closing to complete the purchase
A qualified intermediary (QI) must hold your proceeds — you cannot touch the money
The replacement property must be of equal or greater value
California recognizes 1031 exchanges but has its own claw-back rules

Who Should Consider a 1031 Exchange

Investors Upgrading

Trading a smaller rental for larger property
Consolidating multiple properties into one
Relocating investment to new market

Landlords Exiting

Avoid immediate capital gains tax
Exchange into low-maintenance property
Delaware Statutory Trusts (DST) as passive option

Commercial Owners

Large gain deferral opportunities
Reinvest into residential or commercial
Diversify property type or geography

The 5 Types of 1031 Exchanges

Delayed Exchange — most common; sell first, then identify and buy replacement
Reverse Exchange — buy the replacement first, then sell your current property
Improvement Exchange — use exchange proceeds to renovate the replacement property
Simultaneous Exchange — both properties close on the same day
Personal Property Exchange — limited applicability post-2017 Tax Cuts and Jobs Act

Common Mistakes That Disqualify a 1031

Missing the 45-day identification deadline — there are no extensions
Receiving funds directly ("constructive receipt") immediately triggers taxes
Identifying more than 3 properties without meeting the 200% or 95% rules
Moving into the exchange property as your primary residence too quickly
Failing to use a licensed qualified intermediary

◆ 1031 Exchange Critical Deadlines

Day 0

Relinquished property closes — clock starts

Day 45

⚠ Identification Deadline — must identify replacement property in writing

Days 46–180

Due diligence, escrow, and financing on replacement property

Day 180

⚠ Exchange Deadline — replacement property must close

◆ 1031 Exchange Process Flow

Step 1

Sell Investment Property

Step 2

Proceeds Held by Qualified Intermediary

Step 3 (by Day 45)

Identify Replacement Property in Writing

Step 4 (by Day 180)

Close on Replacement Property

Result

Capital Gains Tax Deferred

Southern California County Resources

County Assessor Offices & Forms

Property tax programs, Prop 19 filings, and exemption claims are administered at the county level. Select your county below to find contact information, key forms, and filing guidance.

📍 Office Information

Los Angeles County Assessor

500 W Temple St
Los Angeles, CA 90012

📞 (213) 974-3211

assessor.lacounty.gov →

🏠 Key Programs

Homeowners' Exemption ($7,000 assessed value reduction)
Prop 19 parent-child transfer exclusion
Senior base-year value transfer (55+)
Disabled homeowner exemption
Disaster relief reassessment reduction

📋 Statewide Forms

Form	Purpose
BOE-266	Homeowners' Exemption
BOE-19-P	Prop 19 Parent-Child Exclusion
BOE-19-B	Base Year Value Transfer (55+)
BOE-19-G	Grandparent-Grandchild Exclusion

Forms submitted to LA County Assessor office. Deadline: within 1 year of transfer.

📍 Office Information

Orange County Assessor

630 N Broadway
Santa Ana, CA 92701

📞 (714) 834-2727

ocassessor.gov →

🏠 Key Programs

Homeowners' Exemption — full exemption by Feb 15
Prop 19 transfer claims
Supplemental assessment after ownership change
New construction reassessment

Assessed Value

$250,000

Less Exemption

−$7,000

📋 Filing Deadlines

Homeowners' Exemption: February 15 for full exemption
Late filing: prorated exemption still available
Prop 19 exclusion: within 1 year of transfer
Supplemental assessment: 60 days to appeal

📍 Office Information

Riverside County Assessor-County Clerk-Recorder

2720 Gateway Drive
Riverside, CA 92507

📞 (951) 955-6200
Toll-free: (800) 746-1544

assessor.riversideca.gov →

🏠 Key Programs

Homeowners' Exemption — free to file, stays active while owner occupies
Prop 19 parent-child and senior transfer claims
Disabled veterans' exemption
Property ownership records and deed searches

📋 Important Notes

Once approved, Homeowners' Exemption renews automatically each year
File Prop 19 claims separately from escrow — assessor does not receive automatic notice
Supplemental assessments issued within 12 months of ownership change

📍 Office Information

San Bernardino County Assessor-Recorder-Clerk

222 W Hospitality Lane
San Bernardino, CA 92415

📞 (909) 387-8307

arc.sbcounty.gov →

🏠 Key Programs

Homeowners' Exemption ($7,000 assessed value reduction)
Prop 19 parent-child and grandparent-grandchild exclusions
Senior base-year value transfer
Calamity reassessment relief

⚠ Critical Prop 19 Note

When claiming a Prop 19 parent-child or grandparent transfer exclusion in San Bernardino County, you must also file a Homeowners' Exemption claim within 1 year of the transfer.

Many property owners miss this step — resulting in a denied exclusion and full reassessment at market value.

📍 Office Information

San Diego County Assessor/Recorder/County Clerk

1600 Pacific Highway
San Diego, CA 92101

📞 (619) 236-3771

sandiegocounty.gov/assessor →

🏠 Key Programs

Property valuation and assessment appeals
Homeowners' Exemption
Prop 19 exclusion claims
Property tax savings programs
Ownership records and title research

📋 Filing Process

Property Transfer Occurs

File Exemption Claims with SD Assessor

Assessor Review (4–8 weeks)

Tax Base Adjusted

Frequently Asked Questions

Common Questions Answered

The most frequently asked questions across all four guide topics, answered plainly.

Proposition 19

Can siblings share the Prop 19 exclusion?

No. The Prop 19 exclusion only applies to the heir who actually moves into the property as their primary residence. If multiple siblings inherit a home and only one moves in, only that sibling's share may be excluded from reassessment.

What if I rent out the inherited property?

Renting the inherited property — even temporarily — triggers full reassessment at current market value. The property must be used as the heir's primary residence to maintain any tax exclusion under Prop 19.

Does Prop 19 apply to property held in a trust?

Yes, Prop 19 applies to property held in a revocable living trust. When the property passes to a beneficiary, the Prop 19 rules apply. The exclusion is still available if the beneficiary occupies it as their primary residence within one year.

Probate & 1031 Exchange

How long does probate take in California?

California probate typically takes 9 to 18 months for a straightforward estate. Complex estates — those with multiple heirs, creditor disputes, or contested wills — can take 2 to 3 years. Properties with a living trust bypass probate entirely.

Can probate property be financed with a mortgage?

Yes. Buyers can obtain conventional mortgage financing for probate properties. However, the court confirmation timeline means escrow typically runs 45–60 days rather than the standard 30 days, so lenders should be made aware upfront.

Can I exchange into multiple properties in a 1031?

Yes. You can identify up to three replacement properties using the "3-property rule," or more properties under the "200% rule" (total fair market value must not exceed 200% of the sold property) or the "95% rule."

Can I eventually move into a 1031 exchange property?

Yes, but you must first use it as a rental for at least 24 months, and there are strict rules about the conversion to primary residence. IRS Rev. Proc. 2008-16 provides a safe harbor. Consult a CPA before converting.

Your Resource Centerfor Confident Decisions

What Is Your Situation?

Inheriting a Home

Senior Moving Homes (55+)

Buying Investment Property

Settling an Estate

Selling a Rental Property

Filing County Forms

California Real Estate Knowledge Hub

Proposition 19 Guide

Income Property Guide

Probate Sale Guide

1031 Exchange Guide

Proposition 19 Complete Guide

⬥ Key Takeaways

Who Prop 19 Affects

Families Inheriting Property

Seniors (55+) Moving

Wildfire / Disaster Victims

The $1 Million Exclusion Rule

Step-by-Step Filing Process

Common Mistakes That Trigger Reassessment

Income Property Investor Guide

⬥ Key Takeaways

Types of Income Property

Who This Guide Is For

First-Time Investors

Portfolio Builders

Owners Considering Selling

Buying Income Property — Step by Step

California Landlord Considerations

Probate Sale Complete Guide

⬥ Key Takeaways

When Probate Is Required

Who This Guide Is For

Executors & Administrators

Heirs & Beneficiaries

Property Buyers

Court Overbidding Explained

Common Probate Challenges

1031 Exchange Complete Guide

⬥ Key Takeaways

Who Should Consider a 1031 Exchange

Investors Upgrading

Landlords Exiting

Commercial Owners

The 5 Types of 1031 Exchanges

Common Mistakes That Disqualify a 1031

County Assessor Offices & Forms

📍 Office Information

🏠 Key Programs

📋 Statewide Forms

📍 Office Information

🏠 Key Programs

📋 Filing Deadlines

📍 Office Information

🏠 Key Programs

📋 Important Notes

📍 Office Information

🏠 Key Programs

⚠ Critical Prop 19 Note

📍 Office Information

🏠 Key Programs

📋 Filing Process

Common Questions Answered

Proposition 19

Probate & 1031 Exchange

Have Questions About Your Situation?

Your Resource Center
for Confident Decisions