Attention homeowners: California lawmakers to consider estate tax hike

Legislators want to fill in the estate tax gap left by the 2017 tax overhaul

TRD LOS ANGELES /
Mar.March 26, 2019 09:00 AM
SB 378 author Scott Wiener and mansions in Beverly Crest (Credit: Wikipedia and Flickr)

The federal government gave wealthy Californians — particularly homeowners — a helping hand in 2017 when it slashed the estate tax.

Now, the California legislature is set to consider raising a state-level estate tax, essentially making up the difference from the savings under the federal tax, according to the Los Angeles Times.

The 2017 federal tax overhaul raised the minimum estate value to qualify for the tax from $3.5 million to $11.4 million for individuals, and $22.8 million for a married couple, meaning far fewer people had to pay.

But California’s SB 378 would lower the estate tax to $3.5 million, capping it at the federal threshold. It wouldn’t apply to estate valued above the federal threshold, in order to avoid double taxation, the Times reported.

For high-net worth Californians, the tax might be another reason to leave the state. Some wealthy people are fleeing high-tax states like California and New York because the 2017 tax overhaul also capped the federal deductions allowed on state and local taxes.

The cap puts 11 million people on the hook for $323 billion in taxes they could write off before the 2017 overhaul.

Florida is a popular destination, because there’s no estate tax. The influx of wealthy people has also buoyed a slowing condo market in Miami.

SB378’s authors say it could raise as much as $1 billion per year. The state wants to earmark it for programs designed to fight income inequality, including a program that would create savings accounts for children from low-income families. [LAT]Dennis Lynch 


Related Articles

arrow_forward_ios
Los Angeles apartments (Credit: iStock)

Expanded unemployment has kept California renters afloat. But that’s set to expire

Expanded unemployment has kept California renters afloat. But that’s set to expire
A rendering of Times Mirror Square

Onni Group’s Times Mirror Square project clears major hurdle

Onni Group’s Times Mirror Square project clears major hurdle
Gary Gold, Paul George, Deandre Jordan, Jeff Bezos, and Garrett Camp (Credit: Getty Images, Flickr, Hilton & Hyland, Google Maps, Realtor, Pinterest, and iStock)

Long live NAR: Agents won’t defy powerful trade group in pocket listings spat

Long live NAR: Agents won’t defy powerful trade group in pocket listings spat
Mitchell Englander in front of L.A. City Hall (Credit: Lilly Lawrence/Getty Images, and iStock)

Ex-LA council member surrenders to FBI in real estate probe

Ex-LA council member surrenders to FBI in real estate probe
David Ryu (Credit: Getty Images)

LA becomes 1st city to enact ban on developer money

LA becomes 1st city to enact ban on developer money
From left: Jose Huizar, Huang Wei, Mohamed Hadid, Robert Herscu, Raymond Chan, and Arman Gabay, with Los Angeles City Hall (Credit: iStock and Getty Images)

Real estate’s role in LA corruption scandals

Real estate’s role in LA corruption scandals
From left: Governor Gavin Newsom, Assemblymember David Chiu, Senator Holly Mitchell, and Senator Nancy Skinner (Credit: Getty Images)

Here are the key housing and rent control bills state lawmakers are debating

Here are the key housing and rent control bills state lawmakers are debating
California Governor Gavin Newsom and a home burned in Malibu following the Woolsey Fire

After devastating wildfires, could restrictions on homebuilding be in LA’s future?

After devastating wildfires, could restrictions on homebuilding be in LA’s future?
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...