Proposition 19 is potentially great news for homeowners 55 or older that have long been interested in moving but unwilling to pay new property taxes and/or be forced to live in the same county.
The short of Prop 19
On November 3rd, 2020 California voters approved Proposition 19, which gives exemptions to older homeowners, the disabled, and wildfire victims while at the same time strips tax breaks from people who inherit homes but don’t live in them.
Under the incoming Prop 19 legislation, homeowners who are 55 or older or who lost a home in one of our many natural disasters will soon be able to transfer their tax assessment to a more expensive home three times (instead of the previous one-time allowance)! There will also be no value limit to the new property.
Under the new Proposition, the taxable value of the original property is subtracted from the taxable value of the new property, with the difference added to the taxable value of the original property. The homeowner will then be assessed on the taxable value of the original property with the added difference. For more information check out San Francisco Assessor Carmen Chu outline some of the benefits.
Big plus. Also, these individuals can relocate anywhere in the state of California, from San Diego to Los Angeles, and still retain the benefits of Proposition 19. The proposition is not county-specific, unlike previous propositions.
This part of Proposition 19 goes into effect on April 1, 2021.
So who is in the best position to benefit from Prop 19?
- Empty Nesters – people that bought a large home 20 years ago and no longer need the space.
- It also applies to the individual out of work because of COVID-19 who seeks to downsize their home,
- Individuals wanting to move closer to the family that were prohibited by a tax reassessment.
If you fall into any of these categories or have been more and more tempted to downsize or move – now is a great time to start looking for that dream home. Proposition 19 is a unique opportunity that should not be ignored.
*Remember if you make any changes to your estate planning we always recommend you speak with a licensed legal professional. This is for informational purposes only.