Monday, April 19, 2021 / by Carol Glover
California has long provided the ability for homeowners to take their low property tax basis with them to a new property, however, there were strings attached that severely restricted this right. You had to be over 55 years of age, if you purchased in another County, the new County had to agree to accept the low property tax basis, you had to buy a less expensive home than the one you were selling and you had one chance in your lifetime to take advantage of this option.
No more. Effective April 1, 2021, the second half of Proposition 19 kicked in.This is a WIN for Seniors, the Severely Disabled and Victims of Wildfires and Natural Disasters
What are improvements over old Proposition 60/90?
- You can sell your current home and take your current factored base year value with you to a new residence ANYWHERE in the State of California.
- You can do this up 3x in your lifetime.
- You can buy a more expensive home than the one you sell, but if you do, your new property tax basis will be a blended rate of your current property tax basis + the difference between the value of the property sold and the new, higher value.
- Example: Personal Residence Factored Base Year Value is $500,000. Cash/Market Value is $1,000,000. Buy a Property that has a Cash/Market Value of $1,200,000. $500,000 ($1,200,000 - $1,000,000) = $700,000
- You must apply for this exemption. It is not automatic and the transfer to the new home must be done within 2 years of the purchase or sale of your principal residence.
- Each Spouse has 3X to transfer this benefit to a new home.
- If you used the Value Transfer previously, you can still use the new law.
We have our continuing complaints about the loss of the Parent-Child Transfer under Proposition 19; however, this portion of Proposition 19 is a benefit to Seniors, the Severely Disabled, and Victims of Wildfires and Natural Disasters. Also, the proceeds of the tax income from Proposition 19 goes to many government programs, but also the firefighters.