Inherited apartment building · Prop 19 · San Diego Inherited an apartment building with your family? Start here.
Prop 19, step-up in basis, trust sales and sibling buyouts, in plain English. We help the whole family see the same numbers and make a calm decision.
- What the building is worth today
- How Prop 19 changes the property tax
- Sell, buy out, or keep: the numbers side by side
- We work with your attorney and CPA
Get your family's options
A value and side-by-side numbers for selling, buying out, or keeping. Confidential.
The first 90 days
If your family just inherited a building
- Keep it safe and insuredConfirm the insurance names the estate or trust. Keep up repairs and safety items.
- Keep rent flowingHave tenants pay into an estate or trust account. Don't change leases or raise rents in a hurry.
- Get a date-of-death valueIt sets the new tax basis. We can prepare a broker opinion; your CPA may want a formal appraisal.
- Gather the paperworkRent roll, leases, deposits held, last two years of expenses, loan statements.
- Decide togetherSell, buy out, or keep with management. We'll value it so everyone starts from the same number.
Prop 19 in plain English
Why the property tax can jump
For decades, California let parents pass property to children without a property-tax reassessment. Prop 19 ended that for rental property starting February 16, 2021.
Today, when children inherit an apartment building, the county generally reassesses it to market value. A building bought decades ago may be taxed on a small fraction of its value now, so the new bill can be many times the old one, and it comes out of the rent.
That doesn't mean you must sell. It means the family should compare the numbers before deciding.
Planning ahead
For parents who want to make it easy on the kids
If you own a building and want to plan now, the useful steps are simple: keep the building in a living trust, keep clean records, write down who your vendors and tenants are, and decide with your children whether they want to manage it. We can sit down with all of you, with your attorney and CPA on the phone, and lay out sell-now versus hold numbers.
Bring to a family meeting:
- Rent roll and leases
- Last year's income and expenses
- Property tax bill
- Loan statement, if any
- Trust or will summary, if you're comfortable sharing
Thamis GallanisBroker-Manager · CA DRE 01011756Who you'll talk to
You talk to the broker, not a call center.
Thamis Gallanis has spent 28 years in San Diego real estate: selling buildings, managing them, and advising the families who own them. Before that, he worked as a Resolutions and Receivership Specialist with the FDIC, taking over the real estate of failed banks and deciding, asset by asset, what to fix, what to hold and what to sell.
That job taught him to look at a building the way a lender or a buyer will, and to give owners a straight answer. Sometimes the right answer is to sell. Sometimes it is to fix the management and keep collecting rent. He'll tell you which.
- 28 yearsSan Diego sales, management and leasing
- FDICReceivership and asset-disposition background
- Broker-ManagerCA DRE 01011756
- North Park office4326 Oregon St, Unit 10
Questions owners ask us
What does Prop 19 mean for an inherited apartment building?
Since February 16, 2021, Proposition 19 limits the parent-to-child property tax exclusion to a family home that a child moves into as their primary residence. An apartment building passed to children is generally reassessed to market value, so the property tax bill can rise sharply.
Do we owe capital gains tax if we sell right after inheriting?
Usually much less than the parent would have. Inherited property generally gets a stepped-up basis to its value at the date of death, so a sale soon after inheriting often produces little taxable gain. Get a date-of-death appraisal and confirm with your CPA.
My siblings and I disagree about keeping the building. What are our options?
Common paths are selling and splitting the proceeds, one sibling buying out the others, or keeping it together with professional management and a written agreement. We can value the building so everyone works from the same number.
Can a trustee sell the building?
If the building is held in a living trust, the successor trustee can usually sell without going to court, following the trust's terms. If there's no trust, the sale may go through probate. Your attorney will confirm what's required.
Should Mom or Dad sell now, or leave the building to us?
It depends on how much gain is in the building, the family's income needs, and who wants to manage it. Holding can preserve the step-up in basis; selling or exchanging now can simplify things. We put both paths side by side for your family and your advisors.
What should we do in the first 90 days after inheriting?
Keep the building insured and rents flowing into an estate or trust account, don't make big lease changes, get a date-of-death appraisal, and gather the rent roll, leases and expenses. Then decide calmly.
Talk it through with the broker
No obligation, no sign in the yard, no word to your tenants.