What is Proposition 19?
Proposition 19 is a California law approved by voters in 2020 that changed how property taxes work for many homeowners. One of its most important provisions allows certain homeowners to take their current, lower property tax base with them when they sell that home and move to a new home. This benefit is commonly referred to as a “base year transfer.”
For many longtime homeowners whose property values have risen significantly over the years, Proposition 19 can make it possible to relocate to a new home without facing a dramatic increase in property taxes.
Who Qualifies?
You may qualify to transfer your property tax base if you are:
- Age 55 or older • Severely and permanently disabled • A victim of a wildfire or other natural disaster
What Does “Transfer Your Tax Base” Mean?
Normally, when you purchase a new home, your property taxes are based on the property’s purchase price, which is often much higher than the taxable value of the home you are selling.
Under Proposition 19, qualified homeowners may transfer the taxable value of their current home to a replacement home. This can result in significant property tax savings.
Key Benefits Under Proposition 19
- Move anywhere in California (The transfer is no longer limited to certain counties)
- You can transfer your tax base three time in your lifetime – six time if you are married. (Disaster victims may qualify more often depending on the event)
- Purchase a replacement home of greater value If the new home costs more than the original home, the taxable value is adjusted upward only by the difference in price. Homeowners do not start over at full market value.
Example
If your current home has a taxable value of $300,000 but sells for $800,000, and you purchase a new home for $850,000, you may be able to transfer your $300,000 tax base and add only the $50,000 difference.
Instead of being taxed on $850,000, your new taxable value would be approximately $350,000.
Disaster Relief
Homeowners whose homes were destroyed by wildfire or another declared disaster may also transfer their property tax base to a replacement home, even if the replacement home costs more than the original property.
Important Notes
- The benefit applies only to your primary residence • Deadlines and filing requirements apply • An application must be submitted to the County Assessor
In short, Proposition 19 provides flexibility for eligible homeowners who need or want to move. By allowing homeowners to carry their tax base with them, the law helps reduce the financial barriers associated with retirement, disability, relocation, or rebuilding after a disaster.
