CA Proposition 19 – Property Reassessments
Background
CA law (prior to April, 1 2021) allowed homeowners age 55 and over, a one-time opportunity to retain their existing property tax basis when they sell their home and purchase another in the same county or other participating counties. It also permitted transfer of the property tax base between parents and children (including property inherited by grandchildren from their grandparents) limited to $1 million, adjusted every other year based on the Federal Housing Finance Agency’s House Price Index for California.
California voters, in the November 2020 general election, approved Prop 19, the highlights of which are:
Home to Replacement Home Transfers (Effective April 1, 2021) - As of April 1, 2021, the tax benefits are expanded by allowing homeowners
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Age 55 and older,
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Those with severe disabilities, and
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Those whose residences have been substantially damaged by wildfires or natural disasters
To retain the property tax basis of the home when purchasing another home anywhere in CA. This provision applies:
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Regardless of location,
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Regardless of the value of the replacement home,
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If the replacement home is acquired within 2 years, and
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So long as this type of transfer has been used no more than twice before.
The transfer is not automatic; homeowners must apply through the county assessor’s office.
Transfers Between Parents and Children (Effective February 16, 2021) -
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The transfer of a personal residence from a parent to a child will result in reassessment of the property unless the child occupies the property as the child’s own principal residence within 12 months of the transfer date.
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The reassessment exclusion is limited to $1 million, adjusted for inflation ($1,044,586 for transfers February 16, 2025 through February 15, 2027; ($1,022,600 for transfers Feb. 16, 2023 through Feb. 15, 2025).
For additional information on Proposition 19 property reassessments, see the California Board of Equalization website: https://www.boe.ca.gov/prop19.