Inherited a House in San Diego? How Prop 19 Can Change the Property Taxes, and What That Means for Keeping, Renting, or Selling
I'm Matt. I buy houses for cash around San Diego County, and a lot of the people I talk with have just inherited Mom's or Dad's house. Usually it's a home the family has owned for decades, with a property tax bill that's still surprisingly low. Then someone mentions "Prop 19," and suddenly nobody's sure what the taxes will be.
Here's a plain-English look at how Prop 19 works for an inherited home, and how it plays into deciding whether to keep it, rent it, or sell it.
What changed with Prop 19
Before 2021, parents could usually pass their home (and often other property) to their kids without the property being reassessed. Prop 19 changed that for transfers on or after February 16, 2021.
Now the parent-child exclusion only covers the family home, and only if two things are true:
It was the parent's principal residence, and
It becomes the child's principal residence.
If none of the kids move in, the house is generally reassessed to current market value. That's often a big jump on a home that's been in the family since the '80s or '90s. Rentals and other property no longer get the exclusion.
There's a value cap, too
Even when a child moves in, the exclusion has a limit. For transfers between February 16, 2025 and February 15, 2027, the cap is the home's existing taxable value (its "factored base year value") plus $1,044,586. If the home's market value is above that, the difference gets added to the taxable value.
The math depends on your home's numbers, so I'm not going to guess at yours. The State Board of Equalization walks through examples on its Prop 19 page, and the County Assessor's office can tell you what applies to your property.
Deadlines that are easy to miss
When you're grieving and handling an estate, paperwork slips. Two deadlines matter here:
The homeowners' exemption. The child moving in generally needs to file for the homeowners' exemption (or the disabled veterans' exemption) within one year of the transfer.
The exclusion claim. The claim for the parent-child exclusion is generally due within three years of the transfer, or before the home is transferred to someone else, whichever comes first.
Call the San Diego County Assessor's office early and ask which forms you need.
What if you move in, then move out later?
The exclusion lasts only as long as the home is your principal residence. Once you move out, the BOE says the home gets a new taxable value, at market value, as of the next lien date. So "I'll live there a year and then rent it out" usually means a higher tax bill once you move out.
Your three real options
1. Keep it and live there. If the house works for you and you meet the rules, this can keep the taxes low. Just make sure the filings get done.
2. Keep it and rent it out. This works for some families, but go in with eyes open: the taxes will likely be reassessed, older homes often need work before they're rentable, and being a landlord in California comes with real rules and responsibilities. If you're in the City of San Diego, local tenant rules apply on top of state law.
3. Sell it. For many families, especially when siblings share the house and live in different places, selling is the simplest way to settle things fairly. Whether the home is in La Mesa, Poway, Santee or Lakeside, you can list it with an agent or sell it as-is for cash.
If selling to me makes sense
I buy inherited houses as-is. That means:
No clean-out. Take what matters to your family and leave the rest. I'll handle it.
No repairs. Old roof, original kitchen, foundation questions, it's all fine.
A cash offer within 24 hours of seeing the house.
Close in 7–14 days, or later if the estate needs more time. If the house is in probate, I work with the executor and the estate's timeline. My probate guide covers how that works.
One number for everyone. When there are several heirs, a written offer makes it easier for everyone to agree.
There's no fee and no obligation. If listing makes more sense for your situation, I'll tell you that.
Your next step
Before you decide anything, talk with a CPA about the taxes, including how the home's tax basis works when you sell. Then if you want to see what a cash sale would look like, call or text me at 858-625-1873, or request an offer on my Get My Fair Offer page. For more on inherited homes, see 5 Things to Know Before Selling an Inherited House in San Diego.
This article is general information, not tax or legal advice. Property tax rules are complex and every situation is different. Please check with a CPA, an attorney, or the San Diego County Assessor about yours.