By: Cassie Carlisle Posted at 3:53 PM, Mar 31, 2021 and last updated 5:53 PM, Mar 31, 2021
SAN DIEGO (KGTV) – A proposition aimed at easing the housing crisis in California takes effect April 1st.
Proposition 19 spells big savings for Californians who want to downsize at a later stage of life.
“It allows any California home owner who is 55 years or older to be able to transfer their property tax base from their current property to any property in the state,” Presidents of the California Association of Realtors Dave Walsh said.
Walsh said that also applies to those with severe disabilities and wildfire or other natural disaster victims. “So the same rules apply, the old rules didn’t allow for both of those categories to always have that benefit so now they also now have that benefit throughout the state,” he said.
The proposition expands their ability to move to anywhere in the entire state, compared to the same county. It also allows those groups to move three times and keep their same property tax rate.
Walsh said you can buy a less or even a more expensive home. “What happens is what’s called a blended tax rate,” he said.
If you buy a more expensive home, you will keep the same property tax rate up to the cost of your original home, then the difference would be added on at the current property tax rate.
“Proposition 19 is the most significant property tax savings measure that’s passed by the California voters over the last several decades,” Walsh said.
He said this will affect millions of Californians. “There are 4.1 million seniors, only, who are eligible to use this in 2021 they tell us, and that number is going to be growing to 5.6 million by 2030 in California.” He said.
The proposition allows homes and farm land to be included when passing down property through generations.
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ADDITIONAL INFORMATION:
Proposition 19 – The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act – On November 3, 2020, California voters approved Proposition 19.
Here are some ways it may impact homeowners:
EXPANDED SPECIAL RULES FOR ELIGIBLE HOMEOWNERS Effective April 1, 2021:
Homeowners 55 years of age and older, severely disabled, or whose property was extensively destroyed by wildfire or other natural disasters may be eligible to transfer the taxable value of their primary residence to a replacement primary residence:
- Anywhere in California
- Of any value, but with upward adjustments if replacement is of greater value
- Purchased or newly constructed within two years of sale
- Up to three times (previously one time), but without limitation for properties destroyed by fire
TAXATION OF INHERITED PROPERTY TRANSFERS Effective February 16, 2021:
Prop 19 narrows the rules allowing properties to pass from parent to child and grandparent to grandchild without an increase in the property tax bill. The taxable value can be transferred:
- To only those properties used as a primary home or farm by the child or grandchild
- If homeowners’ exemption if filed within one year of transfer
If the value of the property is less than $1M over the original tax basis. If the property value, at the time of transfer, is more than $1M over the original tax basis, some upward adjustment in assessed value would occur.
If eligible, these changes may affect your title and escrow transaction. Additional forms may be required through escrow if you plan to transfer the current taxable value of your property.
NOTE: Consult your tax advisor, and/or contact your local tax assessor’s office to learn more about Proposition 19’s provisions and eligibility rules.Want to learn more? Visit http://www.boe.ca.gov/prop19
If you have questions about the San Diego real estate market or would like to discuss your real estate goals this year, just send me an email or call me at 619-888-2117.
Lisa Ashkins, MA, CNE – Broker Associate, DRE#01764182 – Coldwell Banker West
San Diego Real Estate LAB 