Bill > AB1611

This bill, which takes effect immediately as a tax levy, amends California's tax laws to prevent individuals or entities who own 50 or more single-family residential rental properties from deferring capital gains taxes on the exchange of these properties. Currently, under a provision similar to federal law (Section 1031 of the Internal Revenue Code), taxpayers can defer taxes on gains from exchanging certain business or investment properties for "like-kind" properties. This bill, however, specifically disallows this tax deferral for exchanges of single-family rental homes in California if the taxpayer meets the ownership threshold of 50 or more such properties. The change applies to exchanges completed on or after January 1, 2026, and requires a two-thirds vote for passage because it could lead to higher taxes for affected taxpayers.

Budget and Finance

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260AB1611