Title: Prop 19 Explained: Keep Your Low Property Taxes When You Move
If you're 55 or older, severely disabled, or a victim of a natural disaster, selling your California home used to mean a major property tax hike. But a game-changing law, Proposition 19, has given eligible homeowners a way to avoid that hike.
Prop 19 allows you to sell your primary residence and buy a new one anywhere in California, all while keeping a significant portion of your old, lower property tax base. This means you can move without being "locked in" by the fear of a huge jump in your annual tax bill
How Prop 19 Works
Prop 19 essentially lets you port your property tax assessment to a new home. Here’s a breakdown of the key benefits for eligible homeowners:
-
Move Anywhere in California: Unlike previous laws, you're not restricted to a specific county. You can move from San Diego to Sacramento and still use the benefit.
-
Up to Three Transfers: If you're over 55 or disabled, you can use this tax transfer up to three times throughout your life. For natural disaster victims, it's generally a one-time benefit.
-
Buy a More Expensive Home: You can still transfer your tax base even if you're buying a more expensive property. The old tax base is applied, and you'll only pay the difference in value.
Here's a quick example to show you the difference. Imagine your current home has a taxable value of $450,000, and you pay about $4,500 in property taxes per year. You sell it and buy a new home for $700,000. Under Prop 19, your new taxable value would be your old base ($450,000) plus the difference in price ($250,000), making your new taxable value $700,000, or roughly $7,000 a year in taxes. Without Prop 19, your entire new home would be reassessed at the $700,000 market value, causing a much larger tax increase.
Who Qualifies and How People Are Using It
This law is a powerful tool for a variety of homeowners. It allows people to:
-
Downsize without the financial shock. Many seniors are moving from large family homes to smaller, more manageable properties without losing the favorable tax rate they've enjoyed for years.
-
Relocate to be closer to family or services. Whether it's to be near grandchildren or have easier access to healthcare, Prop 19 removes a major financial barrier to moving.
-
Move into homes that better suit their needs. You can trade a multi-level house for single-level living and keep a predictable tax bill.
If you believe you might qualify for this benefit, it's important to understand the rules and how they apply to your specific situation. This isn't just a policy; it's a valuable opportunity that could save you thousands of dollars each year.
Have questions about your unique situation? Call or email me anytime. I’d love to help.
Mary Murphy
650-773-4999
[email protected] | REALTOR® | DRE# 00675838