For many California homeowners, property taxes are one of the biggest considerations when deciding whether to move. If you've owned your home for years, you may be paying significantly less in property taxes than you would if you purchased a new home today.
That's where Proposition 19 comes in.
Passed by California voters in 2020 and effective beginning in 2021, Proposition 19 created new opportunities for eligible homeowners to transfer their property tax base when purchasing a new home. For many homeowners in Palos Verdes, Los Angeles, and throughout California, this can make downsizing, relocating, or moving closer to family much more affordable.
What Is Proposition 19?
Proposition 19 allows eligible homeowners to transfer their existing property tax assessment to a new primary residence anywhere in California.
Before Proposition 19, these tax benefits were limited to certain counties and often came with stricter requirements. Today, qualifying homeowners have more flexibility when making a move.
Who Qualifies?
Generally, Proposition 19 applies to:
- Homeowners who are age 55 or older
- Individuals with severe disabilities
- Victims of natural disasters or wildfires
If you qualify, you may be able to transfer your current taxable value to a replacement primary residence.
What Are the Benefits?
The biggest benefit is potentially keeping your property taxes much lower than they would otherwise be.
For example, imagine you purchased a home in Palos Verdes decades ago and have a taxable value of $400,000. Today, that home may be worth $2 million or more. Without Proposition 19, purchasing a replacement home would typically trigger a reassessment at the new purchase price.
With Proposition 19, eligible homeowners may be able to carry over much of their existing tax basis, helping reduce future property tax expenses.
Can You Buy a More Expensive Home?
Yes.
One of the major changes under Proposition 19 is that homeowners can transfer their tax base even when purchasing a more expensive replacement property.
If the new home costs more than the one you sold, an adjustment is made to your transferred tax basis. While your taxes may increase somewhat, they could still be significantly lower than a full reassessment.
How Many Times Can You Use Proposition 19?
Eligible homeowners can use Proposition 19 up to three times during their lifetime.
This provides additional flexibility for those whose housing needs may change over time.
Important Requirements
To qualify, there are several requirements to keep in mind:
- The property sold must have been your primary residence.
- The replacement property must also become your primary residence.
- The replacement home generally must be purchased within a specified timeframe surrounding the sale of your original home.
- An application must be filed with the county assessor.
Because every situation is different, it's important to consult with a qualified tax professional or attorney regarding your specific circumstances.
What Does This Mean for Homeowners in Palos Verdes and Los Angeles?
Many longtime homeowners in Palos Verdes and Los Angeles have built substantial equity while maintaining relatively low property tax assessments. Proposition 19 can provide an opportunity to right-size into a home that better fits current needs without facing the full impact of higher property taxes.
Whether you're considering downsizing, moving closer to family, or transitioning to a different neighborhood, understanding how Proposition 19 works may help you make a more informed decision.
Final Thoughts
Proposition 19 has changed the way many Californians think about moving. For eligible homeowners, it can remove one of the biggest financial obstacles to selling and purchasing another home.
If you're considering a move in Palos Verdes, Los Angeles, or the surrounding South Bay communities and would like to understand how Proposition 19 could impact your real estate goals, I'd be happy to help you explore your options and connect you with trusted professionals for tax guidance.
This article is intended for informational purposes only and should not be considered legal, tax, or financial advice. Please consult with a qualified professional regarding your specific situation.
