Proposition 19 goes into effect April 1st
On November 3, 2020, California voters approved Proposition 19, the Home Protection for Seniors, Severely Disabled, Families and Victims of Wildfire or Natural Disasters Act.
HIGHLIGHTS of Proposition 19 and who qualifies
Homeowners can transfer their Property Taxes to a new home up to three times Anywhere in California!
Homeowners who are 55 or older, disabled, or lost their home in a natural disaster.
If the replacement home you sell is of equal or lesser value to the new one you buy, your property taxes remain the same.
The sale of the original home must happen within two years of buying the replacement home and Homeowners can purchase their new home before they sell their current home.
What if the replacement home I just bought is more expensive than the home I sold; do I get to keep my same property taxes?
Good Question! – Here is the formula to figure that out:
(value of new home – value of old home) + old tax basis = new tax basis
Here is one example using this formula:
Your old house has a tax basis of $500,000
Your old house sells for $1,500,000
You buy a new home for $2,000,000
NOW Your new tax basis is $1,000,000
Calculation: ($2,000,000 – $1,500,000) + $500,000 = $1,000,000
Formula: New home price – Old home sales price) + Old home tax basis = New home tax basis.
What if I Inherit the property?
If you live in that inherited home as your primary residence, you get to keep the old tax basis “in most cases.” If the value when you inherit the property is more than $1,000,000 over the old tax basis, there is some upward adjustment to the tax basis.
I know this is confusing so call me if it does not make sense.
I want to be your resource for everything real estate related so please call me with any of your real estate questions.
Resource link for more details on Proposition 19
📞 Have Questions? Ask The Chris Eckert Real Estate Team
Give The Chris Eckert Real Estate Team a call today at 650.627.3799 to learn more about local areas, discuss selling a house, or tour available homes for sale.