Proposition 19 – Good or Bad?

When we voted for Proposition 19 – it definitely seemed like it was going to be great for Seniors.  This Proposition will replace Prop 13, Prop 60/Prop 90  which allowed 55  & older to sell their home and buy another for equal or LESSER value…AND retain their original property tax base. They could only move to certain counties in California – only those which accepted your old property tax base.  With Prop 19, they can move to any county in California.  THAT’S GOOD!

The biggest caveat for Prop 19 – Family Transfer Property Tax Inheritance Clause —  Is this BAD?

 Property transfers between parents and children (and grandparents and grandchildren in some limited circumstances) will only avoid property tax reassessment in very limited circumstances – most transfers after February 15, 2021, will now trigger a property tax reassessment and thus a higher tax bill.

Proposition 19 also changes the rules on exemptions from reassessment for intergenerational transfers by limiting the exemption to the transfer of a primary residence to a child (or grandchild) only when the property continues to be used as a family home by the child (or grandchild), and even then, if the divergence between the taxable value and the actual value is too great, a partial increase in the new taxable value will be imposed. Proposition 19 also includes provisions that would allow the transfer of a family farm to retain its taxable value.  These new rules apply to any purchase or transfer beginning February 16, 2021. (CVAR Connect)

However … This is Good!

Homeowners who are age 55 years or older, disabled, or victims of a wildfire or natural disaster to preserve will be able to transfer the Prop 13 base year assessed value of their primary residence to a replacement primary residence… anywhere in the State of California

Here is a great article ” California Proposition 19 Passes, Now What?” by Snyder Law. The article discusses the new Rules of  Prop 19 and how it affects Seniors and their heirs.

You still have time to decide. You may want to speak with your tax professional, CPA or Trust Attorney before making any changes to your title.

Carol Gilles, Realtor/SRES with The RealEstate Group, has been assisting our 55+ neighbors for many years.  Call Carol at 310-864-9738 for more information about Prop 19.