Inherited a home in Santa Clara County? Keep, rent or sell under Prop 19

Many of the homes I sell belong to families settling a parent's estate. The first question is almost always the same: “Can we keep Mom's property tax if we keep the house?” Before 2021 the answer was usually yes. Under Proposition 19 it depends on what you do with the home.

The rule in one sentence

A child (or in some cases a grandchild) keeps the parent's low tax base only if the home becomes the child's own primary residence, and only up to a set amount of value.

What you have to do to keep the tax base

• It must have been your parent's home, their principal residence.
• It must become your home. At least one child has to live there as their main residence.
• File within one year for the homeowners' exemption.
• File the Prop 19 claim (form BOE-19-P for parent to child, BOE-19-G for grandparent to grandchild), ideally within three years of the transfer.

The state explains the details on the Board of Equalization's Prop 19 page.

How much value carries over

The parent's taxable value carries over, plus an allowance that is adjusted every two years. For transfers from February 16, 2025 through February 15, 2027, that allowance is $1,044,586 (BOE).

A simple example: your parent's taxable value is $150,000. Add the allowance and the limit is about $1,194,586. If the home is worth less than that, you keep the $150,000 base. If it is worth $1,800,000, the difference above the limit, about $605,414, is added, so your new taxable value is about $755,414. That is still far below a full reassessment. The county has a calculator to estimate your own numbers.

If you rent it out or do not move in

If no child moves in, or the home later becomes a rental, the exclusion does not apply and the home is reassessed to market value as of the date you inherited it (BOE publication 800-2). For many Santa Clara County homes bought decades ago, that can mean a property tax bill several times higher than your parent paid.

If you sell

A sale to someone outside the family is a normal sale, and the buyer's taxes are based on the price. For the family, the question is usually capital gains. In general, inherited property gets a new cost basis equal to its value on the date of death, which can greatly reduce the gain when you sell (IRS on inherited property). This is general information, not tax advice. Please talk to a CPA or tax attorney before you decide.

How families usually decide

• Keep and live in it: works well when one sibling truly wants to live there and can buy out the others if needed.
• Keep and rent it: run the numbers with the new, reassessed property tax, not your parent's bill. This surprises people.
• Sell: often the cleanest choice when several siblings share the home, especially with the stepped up basis.

Whatever you choose, timing matters: the one year move in window and the filing deadlines are real. If you are sorting this out, I am happy to give you a free value estimate and walk through the options with your family. I will never rush the conversation.

A 2026 ballot effort to undo this part of Prop 19 did not make the November 2026 ballot, so the rules above are the ones in place.

I am a REALTOR®, not an attorney or a tax advisor. Sources: BOE Prop 19, BOE publication 800-2, Santa Clara County Assessor, parent to child, County Prop 19 calculator and IRS. Checked September 2026. For your own situation, contact the County Assessor and a tax professional.