Between the pandemic and the election, the news cycle has been pretty dominated. But if you missed the fact that California’s Proposition 19 was approved by the state’s voters, and you happen to be a homeowner aged 55 or over, you’re in for some welcome news. In a nutshell, California’s Prop 19 upgrades Prop 60 or 90, which were much more restrictive, and means property tax breaks for older homeowners if you decide to move, which eliminates what is typically the biggest hurdle.
Essentially, Prop 19 works like this: homeowners over age 55 can blend the taxable value of their old home with the value of a more expensive new home if they decide to move anywhere in the state (up to three separate times) versus the single move you were allowed before. The resulting property tax savings can be well into the thousands annually. And age isn’t the only qualifier. You can also qualify for this tax break if you have a severe disability or you’re the victim of wildfires and other natural disasters. Another welcome change? If you were married and your partner already made an exchange, you were only allowed to do it once. With Prop 19, that’s no longer the case.
The measure also includes a stipulation regarding inherited homes. Those who inherit a home will no longer enjoy an inheritance property tax break if they keep the inherited place as a second home or rent it out. Closing this loophole on inherited properties not used as a primary residence means increased state tax revenue that will be used for statewide fire-suppression efforts, schools, and local governments.
While the vote was close, ultimately, Prop 19 had enough support to pass. If you think you qualify, you’ve been considering selling, and you’d like to hear more about what Prop 19 means for you, sit tight. The California Association of Realtors is working on a Q&A, because apparently there are a few details of the new law to work out. It’s scheduled to go into effect April 21, 2021. Once we have more information, we’ll share it here.