If higher property taxes have been holding you back from making a move, there’s encouraging news. Here are 5 things you may not know about selling and transfering your property tax base. Many homeowners over 55 are unaware that California now offers more flexible options for transferring their existing property tax base to a new home, even if it’s more expensive and located anywhere in the state. This change can lead to significant savings and greater freedom in choosing your next home. In this post, I’ll address some of the most common questions I receive about Proposition 19, helping you understand how it can benefit you. Commonly asked questions: What if I Lost my home to a Disaster?, How many times can I transfer my tax base?, Can I buy a new home before selling my current one? Can I Buy a More Expensive Home?
What Is Proposition 19?
Proposition 19 (effective April 1, 2021) modified the previous provisions and now allows eligible homeowners to transfer the taxable value of their existing primary residence to a new replacement primary residence. The replacement residence can be of any value* and anywhere within the state. A property owner can file the exclusion up to three times over their lifetime.
Buying a More Expensive Home
Q: What happens if I buy a replacement home that costs more than my original home and want to transfer my tax base?
A: If you are over 55 years, severely disabled, or the victim of a disaster, Prop. 19 allows homeowners who purchase a replacement home of greater value than their original home to transfer their tax base with an adjustment to account for the value difference. The portion over the original home’s value will be reassessed at the current market value.
Timing the Sale and Purchase
Q: Can I buy a new home before selling my current one?
A: Yes. You can purchase your replacement home before selling your original one, as long as you sell the original home within two years of buying the new one. However, you’ll pay property taxes based on the full market value of the new house until you sell the original and complete the transfer.
Q: How long do I have to buy a new home after selling my current one?
A: You can purchase or construct a new home and transfer your tax base up to two years after selling your original one.
Filing the Claim
Q: How do I transfer my tax base to the new home?
A: After completing both the sale of your original home and the purchase of your new one, and once you’re living in the new home, you must file a claim with the Assessor’s Office in the county where your new home is located. This is not handled through escrow.
Q: Where can I get the claim form?
A: Claim forms are available from the Assessor’s Office in the county of your new residence. Visit the LA County Assessor’s Proposition 19 page for Los Angeles County.
How many times can I transfer my tax base?
Under Proposition 19, eligible homeowners can transfer their tax base up to three times during their lifetime.
Q: If I have transferred my tax base prior to Prop. 19, am I eligible to transfer my tax base three (3) more times or only two (2)?
A: The State Board of Equalization believes that transfers of tax base that occur prior to the implementation of Prop. 19 do not count towards the three-transfer maximum.
Co-Ownership and Inherited Homes
Q: Can I co-own the new home with someone else and still transfer my tax base?
A: Yes. As long as you are one of the owners and meet the eligibility requirements, co-ownership does not disqualify you from transferring your tax base.
Q: Can I transfer the tax base from an inherited home?
A: Yes, if you inherited the home and it was your principal residence, you can transfer its tax base to a new home under Proposition 19.
Home Lost to Disaster
Q: What constitutes a natural disaster for tax base transfer purposes?
A: Under Prop. 19, “Natural disaster” means the existence, as declared by the Governor, of conditions of disaster or extreme peril to the safety of persons or property within the affected area caused by conditions such as fire, flood, drought, storm, mudslide, earthquake, civil disorder, foreign invasion, or volcanic eruption
Q: Unfortunately, my home burned down in the Woolsey Fire and sustained significant damage, more than 50%, in the Bobcat Fire. Will I be able to transfer my tax base to Northern California again?
A: If someone is unfortunate enough to have lost two homes to wildfires or other Governor-proclaimed disasters, they can transfer their tax base more than once.
Visit the Los Angeles County Assessor’s Proposition 19 page for more detailed information and to access claim forms. Feel free to reach out if you have further questions or need assistance navigating this process.
Thanks for reading, Robbyn Battles