The Benefits of Prop 19

While buying or selling a home is a serious undertaking for anyone (after all, packing up your entire life and moving from one house to another is no small feat), seniors, retirees, and older homeowners find themselves facing a significant challenge when it comes time to move: they must consider the future, and where they will live as they age.

Many older homeowners would like to downsize and move closer to family. But until recently, many have felt trapped in a home that no longer fits their needs because moving would greatly increase their tax burden. Home values have increased so significantly in California over the past decade that many seniors were becoming unable to afford the increase in property taxes that would come with purchasing a new home.

Thankfully, Proposition 19 has now gone into effect to help alleviate this! What is Proposition 19? Proposition 19 is a recent ballot measure passed in California that impacts property taxes for senior citizens and their families, people who are seriously disabled, and people who have lost their homes to wildfires.

This new law replaces the previous property tax transfer rules established by Prop 13 in 1978, which limited property tax increases to 2% annually. Prop 19 now allows seniors (and other qualifying homeowners) to transfer their current property tax base to a new property anywhere in California up to three times. Additionally, it allows eligible homeowners to transfer their property tax basis to their children or grandchildren, under certain conditions, without triggering a reassessment of the property's value.

What Prop 19 Means For You & Your Loved Ones

Californians aged 55 or older can now downsize, move closer to family, live near medical care, find a more affordable neighborhood, or relocate to any county of their choice, all without hiking their property taxes, as long as the new home is of equal or lesser value to the cash value of their current home. If the new home is more expensive than the cash value of the old house, then the difference etween those two price points is added to the tax base. For example, if a homeowner has a taxable value of $300,000 and a total cash value of $1 million and buys a new home valued at $1.5 million, their new taxable amount would be $800,000.

Overall, Prop 19 is an essential step towards making housing more accessible and affordable for seniors in California. In addition, it provides much-needed relief to older homeowners struggling to keep up with rising property taxes.

Have questions about how Prop 19 may benefit you? Reach out to schedule a free consultation! As a designated Senior Real Estate Specialist, I love to help older homeowners understand all their options to make the best, most educated decisions for a comfortable future.