California Proposition 19 – What you now need to know if you own property

January 22, 2021

 

California Proposition 19 – What you now need to know if you own property

Proposition 19 is scheduled to go into effect on February 16. Are you prepared for the potential
financial impact it may have on you and your family?

What is Proposition 19?
“The Home Protection for Seniors, Severely Disabled, Families and Victims of Wildfire or Natural
Disasters Act” (Proposition 19) was a ballot measure passed by California voters in November
2020 that makes changes to property tax benefits for families, disabled persons, victims of
natural disasters, and senior citizens in the state. It amends legislation currently in Propositions
13 and 58 allowing qualified property owners – people over the age of 55, the physically
disabled, and victims of natural disasters – to move into homes of lesser value in the state up to
three times while carrying lower property tax assessments. It will go into effect on February 16,
2021.

How does Proposition 19 change property taxes?
Proposition 19 limits people who inherit family properties from keeping the low property tax
rate unless they use the home as their primary residence; it allows homeowners over the age of
55, the physically disabled, and victims of natural disasters to transfer their primary home’s
assessed value to a newly purchased or constructed primary residence up to three times in the
state; and triggers real estate reassessment at death unless the home is a primary residence, is
worth less than $1 million, or a child moves into the home. If the property is worth more than
$1 million, the property is reassessed and taxed at the new rate.

What does this look like for me?
Property owners have some recourse to protect against the measure before it comes into effect
on February 16, 2021. Leaving the primary residence or gifting it to children or qualifying
grandchildren transfers the property. In addition, property owners can also transfer up to $1
million in assessed value of other real estate to their children before the February 16 th date.
However, changes for parent-to-child and grandparent-to-grandchild transfer exclusions will
come into effect on the same date, February 16, limiting the number of programs and reducing
tax-saving opportunities.

Conclusion
There are many changes coming to home ownership in California following Proposition 19’s
passage and it’s important to know how they impact you and your family. Working with
licensed professionals and utilizing resources like California State Board of Equalization’s charts
on transfer exclusions and the Los Angeles County Office of the Assessor’s information page are
vital to making the right decision for you and your family.

I’m happy to help assess the value of your current home(s) and can be reached at: 310-528-7480

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