EFFECTIVE APRIL 1, 2021 – PROP 19 IN FULL SWING

There are some big changes in California with relation to property tax portability! Previously approved by voters and now in full effect, Proposition 19 could be literally opening up doors to homeowners like never before.

The concept of property tax portability in California, although a benefit to many, was long overdue for an update with increasing property values. Not only do we now have solutions to the ever-increasing values of homes, but also the migration of homeowners throughout California, not to mention those who have suffered the loss of their home due to natural disasters such as the wildfires that has plagued many areas of our beautiful state over the last several decades.

With the previous Props 60 & 90, homeowners aged 55 and older had a one time ability to transfer the property tax basis of their primary residence. The replacement property had to be of greater or lesser value, and located in the same or one of few reciprocal counties. The new and improved Prop 19 removes location and price restrictions on property tax transfers for homeowners who are 55+, severely disabled, or victims of wildfire or natural disaster and allows them to transfer the property tax base of their existing home to a new home anywhere in California, regardless of price (with an adjustment upward to their tax basis if the replacement property is of greater value).

With location and price restrictions removed, homeowners meeting the requirements will now be allowed to:

• Purchase a replacement home anywhere in California and transfer the taxable value of their current home, allowing them to realize significant annual property tax savings.

• Move closer to family or medical care, purchase a home that better meets their needs, replace a fire-damaged home, or retire or relocate anywhere in the state without a tax increase.

• Save substantially in annual property taxes when moving to a replacement home, even if the replacement home is more expensive than the original primary residence (with an adjustment upward to their tax basis if the replacement property is of greater value).

• Transfer the low property tax base of their original home to a new home up to three times.

If you are 55 years or older and have hesitated moving due to the property tax increase, this could be the moment you have been awaiting. These new rules apply to home sales and purchases that close escrow on or after April 1, 2021. For more on the basics, go to www.caprop19.org.

Now, I am neither a tax or legal advisor, so please consult with your own own attorney or tax advisor to learn more about this Proposition, if you qualify for Prop 19 benefits, how you may facilitate and plan to use this great new tool. I am, however, a real estate expert and would welcome the opportunity to help you put the pieces together when it comes to buying and selling property in San Diego and beyond. Just give me a call at 619-944-2798 or email me at Megan@MeganB.com.