California Voters Approve Prop. 19, Giving New Property Tax Breaks To Older Homeowners

The success of Proposition 19 means that those 55 and older will be able to blend the taxable value of their old home with the value of a new, more expensive home they purchase, resulting in property tax savings that could reach thousands of dollars a year. As part of this, prop 19 would also expand the inherited tax-transfer benefit from children only to grandchildren if the child’s parents are deceased.

The tax benefit is to help seniors, the disabled, and victims of wildfires and disasters.

Benefits For Homeowners

▪ You could move your low tax base to a pricier home and only pay higher property tax on the difference.

▪ You could use this tax base benefit up to three moves.

▪ You could move to a new home anywhere in the state without losing your lower tax base.

“Voters passed Proposition 19 because it is a win-win for California, providing needed housing and tax relief for seniors, wildfire victims, and generating much-needed revenue for schools, fire districts, cities and counties as they face budget shortfalls due to the harmful economic impact of COVID-19,” said Jeanne Radsick, president of the California Assn. of Realtors.

Now, older homeowners will receive a property tax benefit when they buy a more expensive home anywhere in the state — up to three times. Homeowners with disabilities will be able to do the same, and victims of wildfires and other natural disasters will be able to do so after their home is damaged.

The tax value on a more-expensive home would be the difference between the sale price of the old home and the purchase price of the new one added to the old home’s tax value. So, someone who sold a $600,000 home, with a tax value of $300,000, and bought a new one for $700,000 would have a tax value on the new home of $400,000.

The overall impact of Prop 19 would probably yield local governments and schools tens of millions of dollars per year. Over time, these revenue gains could grow to a few hundred million dollars per year. Transfering lower property tax bills to a different home could reduce some local property tax revenues; however, revenue increases overall are expected in the tens of millions of dollars per year, reaching a few hundred million dollars per year over time. Increased home sales could generate transfer tax and state income tax revenue expected in the tens of millions of dollars each year.

IF YOU QUALIFY FOR THESE BENEFITS, CONTACT ROSS TO FIND OUT HOW PROP 19. CAN BENEFIT YOU AS A HOMEOWNER

Make the move!