Understanding PROP19 PROP19
UNLOCKINGSAVINGSFORCAHOMEOWNERS: UNLOCKINGSAVINGSFORCAHOMEOWNERS: UNLOCKINGSAVINGSFORCAHOMEOWNERS:
HOWPROPOSITION19HELPSCALIFORNIANSMOVEANYWHERE WITHINTHESTATEANDKEEPTHEIRLOWTAXBASE
If you fall into ONE or more of these 3 categories, you may be eligible:
AsCaliforniahomeowners,wearen'tusedtothingssavingusmoney, especiallywhenitcomestoowninghomeshere.Infact,mostofusare skepticalwhensomethingpromisestosaveusmoney,especiallylarge amountsofmoney.WearehappytoinformyouProposition19(The
WithProp19,ifyouare55orolderandsellyourprimaryresidenceto purchaseanewprimaryresidenceinthestateofCalifornia,youcan transferyourlowerbasetaxratefromyourcurrentprimary residencetoyournewprimaryresidence.
Prop19cansaveyouuptothousandsofdollarsonyourProperty Taxes
EACHYEAR
Proposition19replacedProposition60and90withsomemajor changesthatwillbenefitmostseniors.
UnlikeProp60and90,withProp19,youcanbuyahomeoflesser, equal,orgreatervaluethanyouaresellingyourcurrenthomefor withoutimpactingeligibility.
Proposition19isavailabletousethroughoutALL58countiesin California;youarenolongerlimitedtojustahandful.
YoumayuseProposition19upto3times,andifyoutransferredatax baseunderProposition60or90inthepast,youarestilleligiblefor Proposition19.
Comparing Prop 19 to Prop 60 & 90
Type of Property
Timing
Location of Replacement Home
Value Limit
How many transfers?
Principal residence
Purchase or newly construct residence within 2 years of sale
Same county
County with intercounty ordinance (10 counties)
Equal or lesser value
100% if replacement purchased/newly constructed prior to sale
105% if replacement purchased/newly constructed in first year after sale
110% if replacement purchased/newly constructed in second year after sale
Principal residence
Purchase or newly construct residence within 2 years of sale
Anywhere in California
One time
Exception: After using once for age, second time for
Any value
No adjustment to transferred base year value if the replacement property is of equal or lesser value than the original property's market value. “Equal or lesser value” means:
100% if replacement purchased/newly constructed prior to sale
105% if replacement purchased/newly constructed in first year after sale
110% if replacement purchased/newly constructed in second year after sale
Amount above “equal or lesser value” is added to transferred value
Three times
section 69.5 (implements Propositions 60/90/110) Revenue and Taxation Code
section 69.6 (implements Proposition 19)
Effective April 1, 2021
FAQ: Base Year Value Transfers
Irecentlysoldmyhomeandamcurrentlyinescrowtopurchasea replacementhome.HowdoItransferthebaseyearvaluetomynewhome? Canthisbedoneviaescrow?
InordertoreceivetheProposition19baseyearvaluetransfer,aclaimformmustbe filedafterbothtransactionshavebeencompletedandyouarelivinginthe replacementhome Thisisnotdonethroughescrow WheredoIgetaclaimformtotransfermybaseyearvalue?
Proposition19baseyearvaluetransferclaimformsareavailablefromandfiledwith theAssessorofthecountywherethereplacementhomeislocated Thecontact informationforall58CountyAssessors,isavailableontheBOE'swebsite. UnderProposition19,willIqualifyforthebaseyearvaluetransferifI purchasemyreplacementhomefirstbeforesellingmyoriginalhome?
AslongasonetransactionoccursonorafterApril1,2021,andtheoriginalhomeissold withintwoyearsofthepurchaseofthereplacementhome,thebaseyearvalueofthe originalhomecanbetransferredtothereplacementhomeunderProposition19.A baseyearvaluetransferoccursasofthelaterofeither(1)thedateofsaleofthe originalhome,or(2)thepurchaseorcompletionofnewconstructionofthe replacementhome.Ifyoupurchasethereplacementhomepriortosellingyour originalhome,youwillberesponsibleforpropertytaxesbasedonthefullfairmarket valueofthereplacementhomefortheperiodbetweenthedateofpurchaseand dateofsale.Therewillbenorefundforthisperiod.
IfIhavealreadyusedmyone-timebaseyearvaluetransferunderthe provisionsofProposition60/90,canIstilltransferthatbaseyearvaluethree moretimesunderProposition19?
UnderProposition19,threetransferswillbeallowedforhomeownerswhoareoverage
55orphysicallyandpermanentlydisabled,regardlessofwhetherapropertyowner previouslytransferredabaseyearvalueunderPropositions60/90andProposition110. UnderProposition19,canItransfermybaseyearvaluetoahomeofany value?
Ifthereplacementhomeisofequalorlesservaluethantheoriginalhome,thenthe originalhome'sfactoredbaseyearvaluemaybetransferredtothereplacement homewithoutanyvalueadjustment.Ingeneral,"equalorlesservalue"means:
100%orlessofthefullcashvalueoftheoriginalhomeifareplacementhomeis purchasedornewlyconstructedbeforethesaleoftheoriginalhome,or 105%orlessofthefullcashvalueoftheoriginalhomeifareplacementhomeis purchasedornewlyconstructedwithinthefirstyearafterthesaleoftheoriginal home,or
110%orlessofthefullcashvalueoftheoriginalhomeifareplacementhomeis purchasedornewlyconstructedwithinthesecondyearafterthesaleofthe originalhome.
However,ifthefullcashvalueofthereplacementhomeisgreaterthantheadjustedfull cashvalueoftheoriginalhome,thebaseyearvalueoftheoriginalhomemaystillbe transferredtothereplacementhome,butwithanyexcessvalueabovetheadjustedfull cashvalueoftheoriginalhomeaddedon.Thus,thenewtaxablevalueofthe replacementhomewouldbethesumoftheadjustedbaseyearvalueoftheoriginal homeplusthedifferencebetweenthefullcashvaluesoftheoriginalhome,asdescribed above,andthereplacementhome.
Forexample,anoriginalhomewassoldandhadafullcashvalueof$400,000anda factoredbaseyearvalueof$100,000atthetimeofsale.Ifareplacementhomeis purchasedinthefirstyearafterthesaleforafullcashvalueof$600,000,then105 percentofthefullcashvalueoftheoriginalhomeiscomparedtothefullcashvalue ofthereplacementhome.Theoriginalhome'sadjustedfullcashvalueequals $400,000X105%=$420,000.Thedifferencebetweenthefullcashvalueofthe replacementdwelling($600,000)andtheadjustedfullcashvalueoftheoriginal property($420,000)isaddedtothefactoredbaseyearvalue($600,000-$420,000= $180,000+$100,000=$280,000).Thus,thereplacementhomewillhaveataxable valueof$280,000.
Iamsellingmyhomeandlookingforanotherhometopurchase.However,I havelivedinmyhomeforlessthantwoyears.Isthereaminimumtime periodforlivingintheoriginalhomeinordertotakeadvantageofthe Proposition19baseyearvaluetransfer?
OneoftherequirementsoftheProposition19baseyearvaluetransferisthatthe originalhomemustbeeligibleforthehomeowners'ordisabledveterans'exemption eitheratthetimeofsaleorwithintwoyearsofthepurchaseofthereplacement home.“Eligiblefor”meansthatthehomeownermustownandoccupythehomeasa principalresidence.Thus,thereisnosettimeperiodforwhichthehomeownermust
occupytheoriginalhomepriortoitssale;allthatisrequiredisthattheoriginalhome betheprimaryresidenceatthetimeofsaleand,thus,eligibleforeitherthe homeowners'ordisabledveterans'exemption IsProposition19retroactivetodisastersthatoccurredin2020?
Proposition19iseffectiveonandafterApril1,2021,andrequiresthatareplacement homebepurchasedornewlyconstructedwithintwoyearsofthesaleoftheoriginal homeinitsdamagedcondition.ThebaseyearvaluetransferunderProposition19is notdependentonthedateofthedisaster.
Iamoverage55andsellingmyhome.However,inordertoaffordanother home,mychildmustbeontitletothereplacementhomewithme.WillIstill beabletotransfermybaseyearvalueifIamnotthesoleownerofthe replacementhome?
Aslongasyouweretheowneroftheoriginalhomeanditwasyourprincipal residenceeitheratthetimeofsaleorwithintwoyearsofthepurchaseofthe replacementhome,youwillbethepersoneligible(theclaimant)totransferitsbase yearvalue.Thelawdoesnotrequiretheclaimanttobethesoleownerofthe replacementdwelling Thus,aslongasallco-ownersofthereplacementdwelling purchasethepropertytogetherandyouareoneofthepurchasers,thefactthatyour childisalsoontitletothereplacementhomewouldnotaffectyoureligibilityforthe Proposition19baseyearvaluetransfer Eventhoughyoumayownonlyapartial interestinthereplacementhome,youwillbeabletotransferyourbaseyearvalueto theentirereplacementhome.
Imovedintomyfather'shometohelpwithhiscare.UponhisdeathonJune 15,2021,Iinheritedthehomeandqualifiedfortheintergenerationaltransfer asafamilyhome.Thehomeismyprimaryresidence.Iamoverage55.WillI beabletosellthisinheritedhome,buyanotherhome,andtransferthetax base?
Aninheritedpropertymaybeconsideredanoriginalhomeforpurposesofthe Proposition19baseyearvaluetransfer,aslongasyouownandoccupythehomeas aprincipalresidenceeitheratthetimeofsaleorwithintwoyearsofthepurchaseor newconstructionofyourreplacementhome.Aslongasallotherrequirementsare met,youshouldbeabletotransferthebaseyearvalueofyourinheritedfamilyhome toareplacementhome.
Toqualifyforthebaseyearvaluetransfer,doesthehomeownerhavetobe (1)age55oroverAND(2)disabledAND(3)avictimofadisaster?
UnderProposition19,ahomeownermayqualifyforthebaseyearvaluetransferunder anyoneofthethreecategorieslisted;thehomeownerdoesnotneedtomeetall threecategoriesinordertoqualify.However,thehomeownermustmeetatleastone ofthequalificationsonthedatethattheoriginalpropertyissold.
Sample Prop 19 Claim Form
Proposition 19 Fact Sheet
