By Corcoran Smith Law Corp. · Updated
Does California Have an Inheritance Tax?
No. California has no inheritance tax and no estate tax. What an heir can still face is the federal estate tax, which requires a return only when the estate is larger than $15,000,000 for deaths in 2026; a property tax reassessment of an inherited California home unless the Proposition 19 parent-child exclusion applies; and income tax on a later sale, measured from the property’s value at the date of death.
This page explains the general rules that apply after a death. It is not tax advice for a particular estate: the executor’s or trustee’s accountant, or a tax attorney, should review the actual figures before anything is filed.
California has no inheritance or estate tax
Revenue and Taxation Code section 13301 bars the state, and every city and county, from imposing a gift, inheritance, succession or estate tax. Section 13302 is the only exception, and it is an empty one today: it imposes a California estate tax equal to the federal credit for state death taxes, and Congress has repealed that credit (26 U.S.C. section 2011). So an heir does not pay California tax for inheriting, and the estate does not pay a California estate tax, whatever its size.
Sources: Revenue and Taxation Code s.13301 - No gift, inheritance or estate tax · Revenue and Taxation Code s.13302 - Estate tax equal to the federal credit for state death taxes · 26 U.S.C. s.2011 - Credit for State death taxes (repealed) · Verified 2026-09-27.
The federal estate tax: which estates file
The federal estate tax is paid by the estate, not by the heirs. A federal estate tax return (Form 706) is required only where the gross estate, plus certain lifetime taxable gifts, exceeds the filing threshold for the year of death. Deductions for debts, administration expenses and property passing to a surviving spouse or a charity then reduce the taxable estate before any tax is figured. A surviving spouse can keep the unused part of the exemption only by an election on a timely filed return, which is a reason some executors file even when no tax is due.
Sources: Estate tax - filing threshold for year of death · What’s new - Estate and gift tax · Verified 2026-09-27.
| Year of death | Return required if the estate exceeds |
|---|---|
| 2024 | $13,610,000 |
| 2025 | $13,990,000 |
| 2026 | $15,000,000 |
A return also changes the probate calendar: where one is required, the executor has eighteen months rather than one year to petition for distribution or report on the estate’s status. See how long probate takes.
Property tax on an inherited home: Proposition 19
California does not tax the inheritance, but the county assessor can reassess inherited real property to its current market value, which can raise the property tax bill sharply. Proposition 19 limits the parent-to-child exclusion from reassessment for deaths and transfers on or after February 16, 2021. The home must have been the parent’s principal residence and must become the child’s principal residence within one year; the child must claim the homeowners’ or disabled veterans’ exemption within one year; and a claim must be filed with the assessor. Family farms also qualify, and so do transfers from grandparents where the grandchild’s parents have died. A rental house, a vacation home or other property the parent did not live in no longer qualifies. Even a qualifying home is protected only up to its existing taxable value plus an amount the Board of Equalization adjusts every two years; any market value above that is added to the taxable value.
Sources: Revenue and Taxation Code s.63.2 - Parent-child and grandparent-grandchild exclusion (Proposition 19) · Proposition 19 - parent-child transfers, filing requirements and the adjusted $1 million amount · Verified 2026-09-27.
| Date of transfer or death | Amount added to the taxable value |
|---|---|
| February 16, 2021 – February 15, 2023 | $1,000,000 |
| February 16, 2023 – February 15, 2025 | $1,022,600 |
| February 16, 2025 – February 15, 2027 | $1,044,586 |
An illustration, using the Board of Equalization’s method. A parent’s home has a factored base year value of $300,000 and is worth $1,500,000 when the parent dies in 2026. The limit is $300,000 plus $1,044,586, or $1,344,586. The $155,414 above the limit is added, so the child who moves in takes a taxable value of $455,414 rather than $1,500,000.
Deadlines to claim the exclusion
The claims are filed with the assessor of the county where the property is, not with the probate court, and nobody files them automatically. The date of death counts as the date of the transfer, including where the home was held in a living trust that became irrevocable at death. At least one child has to keep living there: when no eligible child does, the home is reassessed as of the next lien date to its market value on the date of the inheritance, adjusted for inflation.
Sources: Proposition 19 - parent-child transfers, filing requirements and the adjusted $1 million amount · Revenue and Taxation Code s.63.2 - Parent-child and grandparent-grandchild exclusion (Proposition 19) · Verified 2026-09-27.
| Claim | Form | Deadline |
|---|---|---|
| Homeowners’ or disabled veterans’ exemption | BOE-266 or BOE-261-G | Within one year of the death or transfer; a later filing applies only going forward |
| Parent-child exclusion | BOE-19-P | Within three years of the death or transfer, or before a transfer to a third party, whichever is earlier |
| Grandparent-grandchild exclusion | BOE-19-G | Same as the parent-child claim |
Where siblings inherit a home together and only one will live in it, the exclusion can still apply through that child, but the others share a property they cannot use. That is a common start of a dispute over selling an inherited house.
Income tax when you sell: stepped-up basis
An heir who sells inherited property pays federal income tax only on a gain, and the gain is measured from the property’s value on the date of death, not from what the parent paid. This is the “stepped-up basis”: a house bought decades ago for a fraction of its value may have little taxable gain if it is sold for about what it was worth at the death. California’s community property rule can make the step-up larger. When a married person dies, the whole community property, including the surviving spouse’s half, generally takes a new basis equal to its value at death, as long as at least half of it is included in the estate. The value at death therefore matters, and an appraisal made for the probate inventory or the trust often becomes the record of it.
Sources: Gifts and inheritances - basis of inherited property · Publication 551 - Basis of Assets · Verified 2026-09-27.
Selling through probate has its own rules: court confirmation or notice to the heirs, and the fees the sale adds. See how an estate sells a house.
What to check first
- The date of death, which fixes the federal threshold and the Proposition 19 amount
- Whether the home was the parent’s principal residence, and whether a child will move in within a year
- How each asset was titled, which decides whether it passes through probate, a trust or a simplified court petition
- The appraised value at death, which becomes the starting point for any later sale
Related: what probate costs, what the executor has to do, and how an heir receives an inheritance.
Before you call: What a dispute costs · How a case runs · Which court hears it