California Proposition 19: Property Tax Transfer for Homeowners Aged 55+

If you're a homeowner in California aged 55 or older, you have an excellent opportunity to save on property taxes when buying a new home. Proposition 19, which went into effect in 2021, allows eligible homeowners to transfer their property tax base to a new residence, making downsizing or moving closer to family more affordable.

What is Proposition 19?

Proposition 19 allows homeowners who are 55 years or older, severely disabled, or victims of natural disasters, to transfer the taxable value of their existing home to a new property anywhere in California. This can help you avoid paying higher property taxes on your new home, even if its market value is higher than your original property.

How Does Proposition 19 Work?

• Eligibility Requirements:

  • You must be 55 years of age or older, severely disabled, or have experienced property damage from a natural disaster.

  • The home you're selling must be your primary residence.

  • You can transfer the tax base to a new home that is either of equal or lesser value than your current home, or a more expensive home (with some adjustments).

• Transfer of Property Tax Base:

  • You can transfer your property tax base value to a new home up to 3 times in your lifetime (unlimited if the home was destroyed by a wildfire or other natural disaster).

  • The new home can be located anywhere in California, so you are not limited to the same county.

Steps to Transfer Your Property Tax Base

1. Sell Your Current Home:

   • Once you decide to move, you'll need to sell your primary residence. If your home has appreciated significantly, this will be an opportunity to cash in on your equity while maintaining your lower property tax base on your new home.

2. Buy a New Home:

   • You must purchase or newly construct a new home within 2 years of selling your original home. The new home must become your primary residence.

3. File the Necessary Paperwork:

   • After purchasing your new home, you will need to file an application with your county assessor’s office to transfer your property tax base. Each county may have different forms, but most require:

     • Proof of age or disability.

     • Information about both your old and new homes.

     • The final sales price of both properties.

4. Understand the Tax Adjustments:

   • If your new home is of equal or lesser value than the home you sold, your property tax base remains the same.

   • If your new home is of greater value, your property tax base will be adjusted upward based on the difference between the sales price of the new home and the old home.

Benefits of Proposition 19

• Property Tax Savings: If you’ve lived in your home for many years, your current property tax base is likely much lower than the current market value. By transferring this base to your new home, you can save thousands of dollars in property taxes each year.

• Flexibility in Choosing a New Home: Prop 19 allows you to move anywhere in the state of California and still retain your property tax savings, unlike previous laws that limited the transfer to specific counties.

• Downsizing or Upsizing: Whether you are downsizing or purchasing a more expensive home, Prop 19 offers flexible options. You can even transfer your tax base to a more expensive property with a partial adjustment.

Example Scenario:

• Current Home: You bought your current home 20 years ago for $300,000, and its market value is now $1.2 million. Your property tax base is based on the original purchase price of $300,000, so you pay about $3,000 per year in property taxes.

• New Home: You decide to downsize and buy a smaller home for $900,000. With Prop 19, you can transfer your existing tax base to the new property. Instead of paying property taxes based on $900,000 (approximately $9,000 per year), you’ll continue paying property taxes based on your original $300,000 tax base (around $3,000 per year).

How to Get Started:

If you're considering moving and want to take advantage of Prop 19, here are your next steps:

1. Contact Your Realtor – As your dedicated real estate professional, I can guide you through the entire home-selling and buying process, ensuring all the paperwork is handled smoothly.

2. Speak with a Tax Advisor – It's important to discuss the specifics of your situation with a tax advisor to ensure you're maximizing the benefits of Prop 19.

3. File the Appropriate Forms – After purchasing your new home, we will work together to ensure you file all necessary paperwork with your county assessor to transfer your property tax base.

Contact Information:

For more personalized guidance or to start the process of selling your home and buying a new one with Prop 19, reach out to me today!

Melody Amirehsani
Realtor, East Bay Area Specialist
Phone: 510-866-6100
Email: HomesByMelodyA@gmail.com