By Capital Advantage, Inc. Financial Advisor, Ben Agron, CFP®
Property taxes in California can be a big expense and without past legislation like 1978’s California Proposition 13 (a property tax limitation initiative), many retirees could have—and would have—been easily priced out of their homes.
Recently, in late 2020, California voters approved to amend the property tax rules by passing Proposition 19 (known as the Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act).
Without getting into the weeds of Prop 19, here are 3 main takeaways:
1. The biggest winners are California homeowners aged 55 and older.
Qualified homeowners may now move anywhere in California and transfer their current tax basis (taxable value of their primary residence) regardless of the value of the new primary residence—even if the new residence is greater in value.
Previously, Prop 13 limited tax basis transfer to within the same county (or to one of 10 counties that accepts intercounty tax basis transfers) and only to a replacement property of equal or lesser value.