California Proposition 19 approved in the November 3, 2020 election has expanded the ability of homeowners age 55 and older to take their low property taxes with them when they move.
Beginning April 1, 2021, if you sell your primary residence and buy a new home as your primary residence, you can transfer the assessed value of your old home
to the new home, no matter where you move, anywhere in California and no matter how much you pay for the new home. You have to be over 55, severely disabled or a victim of a wildfire or natural disaster and you have to buy the new home within two years of the sale of the old home. You can now do this up to three times.
If the new home is of equal or lesser value than the old home, the assessed value of the old home can be transferred to the new home and you won't have to pay any higher property taxes than you did at the old home. If the new home is of greater value than the old home, you will pay higher property taxes but the assessed value of the new home won't be equal to the full purchase price. The assessed value of the new home will be equal to the assessed value of the old home plus the difference between the full cash values of the old and new homes.
It is important to distinguish be tween the assessed value of your old home which is the value for property tax purposes and can be found on your property tax bill, on the one hand, and full cash value which is the purchase or sale price.
The old law still applies for transfers before April. Under the old law, with some exceptions, the old and new homes had to be in the same county; you could only transfer the assessed value of the old home if the value of the new home was equal to or less than the value of the old home; and with limited exception, you could only do this once.
Planning Ahead Column:
By Lisa Alexander, Esq.
Jakle & Alexander, LLP,
1250 Sixth Street, Suite 300, Santa Monica, CA 90401
Main Line: 310-395-6555