California’s Proposition 19, passed in November 2020, introduced significant changes to the state’s property tax system, impacting homeowners, particularly those aged 55 and older.
Understanding Proposition 19
Proposition 19 allows eligible homeowners—those 55 years or older, severely disabled, or victims of natural disasters—to transfer the taxable value of their existing primary residence to a replacement primary residence anywhere in California. This transfer can be utilized up to three times and applies even if the new home is of greater value, though adjustments to the tax basis are made in such cases.
Benefits for Homeowners
- Tax Savings When Relocating: Previously, purchasing a new home often led to higher property taxes due to reassessment at current market values. Under Proposition 19, eligible homeowners can move without facing increased property tax bills, as they can carry over their existing tax assessments.
- Flexibility in Choosing a New Home: The proposition removes previous restrictions, allowing tax basis transfers to any county within California and to homes of any value. This flexibility enables homeowners to relocate closer to family, medical care, or into more suitable housing without financial penalty.
- Support for Disaster Victims: Homeowners who have lost their residences to wildfires or other natural disasters can benefit by transferring their property’s tax base to a new home, aiding in their recovery and financial stability.
Considerations for Inherited Properties
Take Action
If you’re considering relocating within California or have questions about how Proposition 19 affects your property taxes, it’s essential to understand your options and plan accordingly. Consulting with a real estate professional or tax advisor can provide personalized guidance tailored to your situation.
Note: This article is for informational purposes only and does not constitute legal or financial advice.
