Proposition 19 Explained

Proposition 19 is a new law that was approved by California voters in November 2020. It allows homeowners who are 55 or older, disabled, or victims of natural disasters to transfer their property tax base to a new home of equal or lesser value anywhere in the state. This can result in significant tax savings for eligible homeowners who want to move to a different location or downsize their living space.

How does Proposition 19 work?

Proposition 19 replaces the previous rules that allowed homeowners to transfer their property tax base only within the same county or to a participating county, and only once in their lifetime. Under Proposition 19, homeowners can transfer their property tax base up to three times, and to any county in California. The new home must be purchased or newly constructed within two years of selling the original home.

Proposition 19 also changes the rules for inherited properties. Previously, children or grandchildren who inherited a primary residence from their parents or grandparents could keep the low property tax base of the original owner, regardless of whether they lived in the home or not. Under Proposition 19, inherited properties will be reassessed at market value unless the heirs use them as their primary residence within one year of inheritance.

What are the benefits and drawbacks of Proposition 19?

The main benefit of Proposition 19 is that it gives more flexibility and affordability to homeowners who want to relocate within California. It can help seniors, disabled people, and disaster victims to find a more suitable home for their needs and preferences, without facing a huge increase in their property taxes.

The main drawback of Proposition 19 is that it reduces the tax benefits for inherited properties. It can make it more difficult and expensive for heirs to keep their family homes or use them as rental properties.

How to apply for Proposition 19?

To take advantage of Proposition 19, homeowners must file a claim with the county assessor where their new home is located within three years of purchasing or completing construction of the new home.