If Prop 13 were repealed, what would it do to the market?
It would put a more inventory out there. Even if it is just repealed for “new and subsequent heirs,” a decedent’s property would likely be put on the market instead of one heir “buying out” the others, due to the permanent low tax basis. The heir(s) will have no incentive/reason to hang onto a deceased parent’s property and will just want to “cash out.”
As it stands, many more decedents’ properties in CA are actually “handed down” (by bequest or quitclaim deed) than are marketed, due to the “Prop 13 perk,” which allows (future or present) heirs to live in these (often free-and-clear) properties practically free (+ ins/utils).
In addition, when Prop 13 homeowners get ready to move in with kids or to an assisted-living facility, their property will be marketed instead of one of the kids “automatically” moving in to “hold down the (free) fort.” There’s no reason to hang onto it with market-rate taxes attached to it.
