THE DELEON INSIGHT
UNDERSTANDING
PROPOSITION 19
By Andrew VanSlyke, Esq.
The presidential race may have gotten the most attention this past November, but there were some big changes made to California property tax laws this election. The principal change was the passage of Proposition 19, which has created a number of new rules surrounding how residential property will be taxed going forward. This is a complicated provision, with multiple discreet sections, but all homeowners should be aware of the key provisions. Transfer of Property Tax: California homeowners may already be familiar with propositions 60 and 90, which have provided tax benefits to individuals 55 and over who sell their homes. Effective April 1, 2021, Prop 19 will expand these benefits in a few significant ways. Prop 19 will allow homeowners who are 55 and older, or have a qualifying disability, to transfer the property tax assessment from their current primary home to the
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purchase of a new primary residence anywhere in the state. A homeowner’s current tax assessment can still be transferred to the purchase of a less expensive home, which is already permitted under the current tax framework, but now they will also be able to transfer their tax assessment to a more expensive home, although there will be an upward adjustment in taxes to reflect the increase in price. The number of times that a tax assessment can be transferred will also increase from one time to a total of three times. The ability to keep a low tax assessment while purchasing a more expensive property, up to three times, is a huge boon for homeowners who may have previously put off a new home purchase because they did not want to lose their relatively low yearly property tax assessment.
