Prop 19 goes into effect April 1, 2021 there are several elements to this proposition that could impact your next real estate transaction. If you own property in CA you know property tax is an important consideration in your budget. If you are 55 years old, or severely disabled, or victim of a wildfire or natural disaster and thinking about selling your home it is imperative that you understand Prop 19 and seek professional counsel.
Property Tax History
First a little history for context. Prop 13 was established in 1978. To summarize the basics it rolled back the property tax assessment to 1975 values and limited the possible annual increases. This was established to protect those on a fixed income as property values rise, potentially risking their residence purely because they could not afford the property tax.
In 1986 Prop 58 was passed which expanded the property tax limits. You could buy a new home and take your tax base from the previous home with you or transfer the home to a child or grandchild and they could have the same benefits. As good as all that may sound this is just a summary there were many different qualifiers that varied from county to county.
Prop 19 Highlights
On November 3, 2020, voters passed Proposition 19, The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act, which goes into effect April 1, 2021. Below are listed some of the major aspects of Prop 19.
• Transfer anywhere in California
• 55 yr. old may use up to 3 times
• Primary residence of any value: original tax base + difference between sale price & new home purchase price
• If transferred to a child or grandchild they must use as a primary residence
To make sure just how it will impact your situation and how to implement it, please seek professional counsel. There could be some protection for transfers to families with the use of a Family Property LLC. We can help assess your situation and connect you with the proper professionals to insure a smooth transition. For more information see the California State Board of Equalization Fact Sheet or visit their Website.