CA Prop 19

On November 3, 2020, California voters approved Proposition 19,
The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act.

Expanded special rules for eligible homeowners.
Effective April 1, 2021: Homeowners 55 years of age and older, severely disabled, or whose property was extensively destroyed by wildfire or other natural disasters may be eligible to transfer the taxable value of their primary residence to a replacement primary residence:

– Anywhere in California
– Of any value, but with upward adjustments if replacement is of greater value
– Replacement property is purchased or newly constructed within two years of sale of the original property
– Up to three times (previously one time), but without limitation for properties destroyed by fire from a governor’s declared disaster

Taxation of inherited property transfers.
Effective February 16, 2021: Prop 19 narrows the rules allowing properties to pass from parent to child and grandparent to grandchild without an increase in the property tax bill. The taxable value can be transferred:

– To only those properties used as a primary home or farm by the child (or grandchild if the parents are deceased).
– If homeowners’ exemption is filed within one year of the change of ownership (including the date of death) or if a parent/child transfer form is filed within three years of the change of ownership (including date of death).
– If the market value of the property is less than $1M over the original tax basis. If the market value, at the time of transfer, is more than $1M over the original tax basis, some upward adjustment in assessed value would occur.
– If ownership is under the name of the grantor or grantee and not under a separate legal entity.
– For multi-unit properties (duplex, triplex, etc.), but the exclusion from reassessment only applies to the unit used as the primary home.

Please note: If the assessed taxable value of your property has a reduced base due to California’s Proposition 8 (“decline-in-value” assessment), the Mills Act (historic properties), or any other programs, this may affect the tax benefit you receive from Prop 19. Consult your county’s Office of the Assessor for more information.

Information Provided by First American Title