Prop 19 FAQ
Proposition 19: Property Tax Increase Limits on Primary Residences
Frequently Asked Questions— Prop 19
Prop 19 allows a homeowner who is 55 years of age or older, severely disabled or whose home has been
substantially damaged by wildfire or natural disaster to transfer the taxable value of their primary residence
to: a) a replacement primary residence anywhere in the state, b) regardless of the value of the replacement
primary residence (but with adjustments if replacement has a greater value), c) within two years of the sale
and d) up to three times (or as often as needed for those whose houses were destroyed by fire).
The prior rule limited this exemption to a one-time transfer within the same county (Prop 60) or between
certain counties (Prop 90) and only if the replacement property was of "equal or lesser value."
April 1, 2021
There is no definitive answer in the law. Although, we believe that the tax benefits under Prop 19 will apply to transactions where either the sale or purchase of a primary residence takes place before April 1, 2021, as long as the subsequent sale or purchase takes place within two years and occurs on or after April 1. If you have a client who wishes to obtain the tax benefits of Prop 19 for a transaction that closes prior to April 1, 2021, whether it is buying or selling a property, the client should be encouraged to seek the advice of a qualified California real estate attorney or tax advisor.
No. The taxable value of the original property may be transferred and become the taxable value of the new
The new taxable value is calculated by adding the difference between the full cash value of the replacement property and the original property to the original taxable value. For example, if a seller of an original property has a $300,000 taxable value and a full cash value of $1M and then buys a replacement property for $1.5M, the taxable value of the replacement property would be $800,000.
Yes. This is how the current rule under Prop 60 works, and Prop19 uses nearly identical language.
It limits the exemption to those properties where the primary residence continues to be used as a family
home by the child or grandchild transferee. If so, the taxable value will remain the same, subject to some
upward adjustments if the property value, at the time of transfer, is more than $1M over the original tax basis.
The new taxable basis will be the assessed value of the property at time of transfer minus $1M.
February 16, 2021.
Claims may be made with forms provided by the local county assessor’s office.
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