California Proposition 19: Understanding Its Value to Homeowners
As a California homeowner, you may have heard about Proposition 19, which was passed by voters in the 2020 election. This measure has significant implications for homeowners in California, particularly those who are over 55 years old, have disabilities, or have been affected by natural disasters. One of the biggest perks, Prop 19 has the ability to save you hundreds of dollars when it comes to capital gains tax!
What is Proposition 19?
Under Proposition 19, eligible homeowners can now transfer their property tax basis to a new home of any value, anywhere in California. Additionally, Proposition 19 provides tax relief to homeowners who have been affected by natural disasters by allowing them to transfer their property tax basis to a replacement home of equal or lesser value, regardless of the value of the replacement home or the location in California.
Benefits of Proposition 19 to Homeowners
Increased flexibility in choosing a new home: Under Proposition 19, eligible homeowners can now transfer their property tax basis to a new home of any value, anywhere in California. This means that you can choose to downsize or upgrade your home without worrying about a significant increase in property taxes.
Tax relief for homeowners affected by natural disasters: Homeowners who have been affected by natural disasters, such as wildfires, can now transfer their property tax basis to a replacement home of equal or lesser value, regardless of the value of the replacement home or the location in California.
Avoiding property tax reassessment for inherited homes: Proposition 19 also provides tax relief to homeowners who inherit a home from their parents or grandparents. The new law allows eligible homeowners to transfer the property tax basis of their inherited home to their new home, regardless of the market value of the new home.
If you are an eligible homeowner, Proposition 19 can significantly impact your real estate decisions. You now have more flexibility in choosing a new home, whether you are downsizing, upgrading, or relocating to a different part of California. Additionally, if you have been affected by natural disasters, Proposition 19 can provide tax relief and make it easier for you to find a replacement home.
Real Life Situation Involving Proposition 19
One of our clients was a longtime resident of Pleasanton, she had owned her home for over 50 years! When deciding to sell her home, one of her biggest concerns was that she would have to pay thousands of dollars more in property taxes once she moved to her new home.
Our client had never heard of Prop 19, so we eagerly informed her that she can transfer her current property tax basis to her new home! She was ecstatic. Not only did this mean that as a retired individual she would save thousands of dollars a year, but, it also expanded her flexibility in being able to choose a new home, without worrying about the tax implications.
