Property 19 Explained

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Real Estate

Property 19, formerly known as Propositions 60/90/110, was made effective April 1, 2021, which allows homeowners 55 or older, those with severe disabilities, and victims of wildfires and natural disasters to transfer their tax assessments anywhere within the state of California to a primary residence of equal value with no property tax increase, or a more expensive primary residence with an upward adjustment within two years of the sale of the original primary residence. 

Eligible homeowners can transfer their tax assessments up to three times.  Made Effective February 16, 2021, requires that inherited homes that are not used as principal residences, such as second homes or rentals, be reassessed at market value when transferred to children or grandchildren.  Allocates additional revenue or net savings resulting from the ballot measure to wildfire agencies and counties.

 

         Side-by-side description of Propositions 60/90/110 and Prop. 19

Proposition 19 allows homeowners who are 55 or older to transfer the taxable value of their old house to a new home of equal value or a 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. Proposition 19 also changes tax reassessments on inherited properties and 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 parent’s 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. Further, when the inherited property is used as the recipient’s principal residence, but has a market value of $1 million more than the property’s taxable value, an upward adjustment in assessed value would occur.

If you are considering relocating and would like more information about Property 19, please reach out to your trusted Real Estate Advisor for more clarification.