On April 1,2021, new rules governing property tax portability will become effective. The changes enacted by Proposition 19, sponsored by the CALIFORNIA ASSOCIATION OF REALTORS®, are aimed at providing a significant tax benefit to your clients who are 55+, severely disabled, or victims of a wildfire or natural disaster when they move homes anywhere in California.
As part of their ongoing effort to help you and your clients navigate Prop 19, C.A.R. is offering a suite of tools and resources to our members. Please visit www.caprop19.org where you will find:
- Fact sheets and frequently asked questions on Prop 19
- Sample informational flyers and emails to share with your clients
- A sample PowerPoint presentation explaining how the new tax portability provisions work
The passage of Proposition 19 represents a huge win for homeowners. Before Prop 19, only homeowners buying and selling within the same county could take advantage of property tax base transfers. For homeowners who were buying and selling across counties, only ten counties allowed property tax basis transfers. Importantly, these transfers were subject to price restrictions and could only be done one time.
Proposition 19 removes all location and price restrictions to allow homeowners who are 55 or older, severely disabled, or victims of wildfires or natural disasters to:
- Purchase a replacement home anywhere in California and transfer the taxable value of their current home, allowing them to realize significant annual property tax savings. Purchasing a more expensive home will result in an adjusted tax increase based on the original property’s Prop 13 tax basis.
- Move closer to family or medical care, purchase a home that better meets their needs, replace a fire-damaged home, or retire or relocate anywhere in the state while receiving tax savings.
- Save substantially in annual property taxes when moving to a replacement home, even if the replacement home is more expensive than the original primary residence (with an adjustment upward to their tax basis if the replacement property is of greater value).
- Transfer the low property tax base of their original home to a new home up to three times.