Thanks to propositions 60, 90, and 19, most homeowners 55 and older can transfer the property tax base of their original primary home to their new primary home in California. This can be beneficial to the many homeowners in California who have an assessed property value (which is the value on which property taxes are based) that is lower than the true market value of the home. Long-time homeowners could face sharp increases in property taxes when moving to a new home. However, if the property tax base is transferred, homeowners can carry over the assessed value from their old home to their new one, potentially saving thousands of dollars annually.
How it works
The property tax base of the prior home is transferred to a home of equal or lesser value. If the new home is of greater value than the original property, the difference in market value is added to the transferred base year value. If moving from your primary residence, you would need to file a claim to apply for Prop 19 within 3 years to transfer your base value to the new home for property tax.
To qualify:
- Replacement residence must be purchased or newly constructed within two years of the sale of the original property.
- Claimant must be at least age 55 years or older at the time the original property is sold.
- The claimant must own and reside in the original property at the time of its sale or within two years of the purchase or new construction of the replacement.
- Either one or both the sale of the original property or the purchase/completion of new construction of the replacement must occur on or after April 1, 2021.
- The original property must be sold, and the replacement purchased for consideration. Consideration is defined as something of value such as payment of cash, creation or cancellation of debt, or exchange of other property.
Background
“Propositions 60/90 and 110 allowed persons over 55 or severely and permanently disabled persons to transfer the taxable value of their existing home to a new replacement home, so long as the market value of the new home is equal to or less than the existing home’s market value and located in Los Angeles County or one of nine other participating counties in California. Proposition 19 (effective April 1, 2021) modified the previous provisions and now allows eligible homeowners to transfer the taxable value of their existing primary residence to a new replacement primary residence. The replacement residence can be of any value*, and anywhere within the state. The exclusion can be filed up to three times by a property owner over their lifetime.”
*Source: Assessor – Proposition 19 (lacounty.gov)
Some other resources for reference:
https://www.caprop19.org/propertytaxportability
