California Proposition 19

California’s 2020 Ballot Measure, Proposition 19, has passed and will become law January 1, 2020. This is a complicated law in that it addresses three separate issues:

  1. 1. It allows seniors age 55 and up to take their property tax basis to a newly purchased property at any price any place in California
  2. 2. Upon inheriting a home, an heir’s property tax basis will go to current market value, UNLESS the heir moves in as his principal residence.
  3. Disabled and wildfire/disaster victims would also get property tax breaks.

Details follow:

If you are possibly in any of the affected groups, it is imperative that you understand your rights and your obligations. Call us at 949-500-6365, email us, or reach us through our website for more information on this very important new law.

PROPOSITION 19 Informational Flyer

Proposition 19 provides big changes to certain property tax rules

  • Proposition 19 builds off of Proposition 13, passed in 1978, which limits property taxes to 1 % of a home’s value, based on the year the house was purchased. Proposition 13 also restricts the amount that taxable value can go up every year to 2%, even if a home’s market value increases much more.
  • Currently, as soon as residents move to a new home after living in their old home for a long time, their property tax increases by a lot – this is the issue that Proposition 19 seeks to address.
  • Proposition 19 allows homeowners who are 55 or older to transfer the taxable value of their old house to a new, more expensive home, thereby avoiding the big jump in property taxes they would otherwise face. This is designed to encourage seniors to enter the real estate market.
  • Disabled homeowners and wildfire/disaster victims would receive the benefit as well. The rules under Proposition 19 extend to every county in the state, and homeowners could take advantage of the break as many as three times when they decide to move.
  • Proposition 19 also changes tax reassessments on inherited properties. Currently, homes are not reassessed when transferred to heirs, so any property that is benefitting from the low tax rates created by Proposition 13 would continue to benefit if a parent passes the property to a child.
  • However, Proposition 19 makes it no longer possible for inherited homes to maintain the same low property tax rate enjoyed prior to the inheritance, if the heir does not move into it as a primary residence. Children who inherit their parents’ home, but only intend to keep it as a second home or rent it out, would see a big increase in property taxes under Proposition 19.