SLO County Agricultural Bureau and Assessor Win Inheritance Tax Battle
October 19, 2021
OPINION OF BRENT BURCHETT
Farm and ranch families can once again pass their land on to the next generation, thanks to the work of the Farm Bureau and our own San Luis Obispo County Assessor, Tom Bordonaro.
For those who don’t know, our farming community isn’t getting many wins in Sacramento these days. Our elected officials are further from the farm than at any time in our state’s history, and farmers face each legislative session as if entering a new challenge of regulations, red tape and government. fee increases, but we got a big win this session with the signing of Senate Bill 539 by Governor Newsom in October.
SB 539 clarifies a confusing and narrowly adopted initiative in November 2020, Proposition 19, which limits tax protections for a parent or grandparent who passes their land on to their children. The three key provisions for property tax assessments under Proposition 19 as adopted were:
If you don’t live in the property that was also your parents’ primary residence, the low valuation of the prop. 13 will be deleted and replaced with a new, much higher market value.
This new approach would also have limited the transfer of the old tax base to the first million dollars of market value over the old tax base for an entire farm or ranch.
This would have increased taxes on the difference between the old tax base and the market value greater than $ 1 million plus the old tax base on the entire ranch or farm.
Since the adoption of Proposition 19, Farm Bureau and Assessor Bordonaro have negotiated with Heads of State to minimize the implications of property tax for agriculture, and I am proud to report that SB 539 is strengthening in fact the tax protections that existed before Proposition 19 for family farmers and pastoralists.
SB 539 now specifies that each legal parcel, rather than the farm or ranch as a whole, will be assessed as a “family farm” under Proposition 19. The bill also specifies that a “family home” and a legal ‘family farm’ plot on which the family home is located are eligible for individual exclusions from property tax reassessment under Proposition 19.
Bordonaro represented the California Assessors Association in SB 539 negotiations, and our Farm Bureau was the voice of our 700 family members of the San Luis Obispo County Farm Bureau and the more than 34,000 Farm Bureau members across California. We would also like to thank our State Senator John Laird and Assembly Member Jordan Cunningham for voting in favor of these changes.
It is a centuries-old tradition that family farms are passed down from parents and grandparents to their children and grandchildren. This should be done without a “death tax” being passed on to the next generation. After all, we are talking about the land and agricultural infrastructure that produces the food and fiber we all depend on. We should all hope that family farms survive.
Unnecessary and excessive property taxes only discourage food production and lead to higher prices at the grocery store. Thank goodness Tom Bordonaro and our Farm Bureau have come together to right the mess of Proposition 19 and ensure the family farm survives in our community and across California.
If you would like to learn more about the specifics of SB 539 and how it affects your property, please contact me at [email protected] or call our office at 805-543-3654. The SLO County Agricultural Office will be hosting an information forum in the coming weeks on Proposition 19 and the new law under SB 539.
The San Luis Obispo County Agricultural Office has championed farmers and ranchers since 1922. Brent Burchett is its executive director. Learn more about slofarmbureau.org.