Prop 19 allows eligible homeowners to transfer the taxable value of their primary residence to a replacement primary residence anywhere in California, regardless of location or value, as long as the replacement residence is purchased or newly constructed within two years of the sale of the original primary residence. Homeowners can save big on their annual property tax bills, whether they move to a replacement home that is the same price, more expensive, or less expensive than their original home.
- Homeowners ages 55 and over
- Severely disabled homeowners
- Victims of wildfires or natural disasters
BIG TAX SAVINGS FOR HOMEOWNERS MOVING WITH A PROP 19 TAX BASE TRANSFER
Example #1: Buying an Equal or Less Expensive Home:
If the couple sells their home for $600,000 and buys a replacement home for the same amount or less, the couple could transfer the lower tax base of their original home to the replacement home and save $4,400 on their annual property tax bill. By transferring the original home’s tax base ($200,000) to their replacement home, the couple would pay the same amount in property taxes ($2,200) after moving – instead of paying $6,600 on the replacement home’s purchase price of $600,000.
Example #2 Buying a More Expensive Home:
If the couple sells their home for $600,000 and buys a more expensive home for $700,000, they could transfer the property tax base of their original home to the replacement home and save $4,400 on their annual property tax bill. Instead of paying $7,700 in taxes on the $700,000 purchase price of the replacement home, the couple would pay $3,300 because the new tax bill would be calculated by adding the original home’s tax base ($200,000) to the difference between the purchase price of the replacement home ($700,000) and the sales price of the original home ($600,000).
Ready for change?
Call 559.792.8263. I’ll listen to your questions and ideas. We’ll create an action plan that could save you thousands of dollars every year!
*Information compiled from California Association of REALTORS.