The Only Two Constants in Life...Death and Taxes!

Hello everyone,

I hope you all had a wonderful holiday break and are ready to make 2026 a great year. I don't normally touch base with newsletters in such close succession (mostly because I'm lazy), but I had someone pass along some information about yet another proposed tax by the San Diego City Council that could have implications for many of you.

As you're aware, nowadays after the passage of Prop 19 in 2020, you can't inherit a home from a parent and keep the low property tax base (ie: low property taxes) unless you move into the property and claim it as your personal residence. For many who already have homes and inherit a property in the area, that's often a deal-breaker. (I know I told my wife I'm never moving again. I hate moving). But, that often raises a math problem when it comes to considering whether to hold onto the inherited residence as a rental because the property taxes are often quite steep once the Assessor gets word of the death.

1% of a $1,500,000 house (which is pretty standard in much of San Diego county) gets you bumped to a $15,000 annual property tax bill. Now, the San Diego City Council is proposing an additional tax on second homes of $5,000 per bedroom for short term rental properties (ie: AirBNB properties) that would amount to an additional annual tax of $15,000 annually in most cases. That number would go up for homes with more than 3 bedrooms obviously. All of a sudden, anyone thinking of holding onto a second home for short term rental purposes would be looking at around $30,000 annually in taxes alone for a pretty standard place in San Diego.

I'm not here to tell you whether to support or reject this proposal, but at least familiarize yourself with the story here and be aware of it when it comes time to vote.

Now that you've had two newsletters in quick succession, I'll leave you alone. Enjoy your upcoming MLK holiday and we'll be in touch.

Jason Ebert