Press "Enter" to skip to content

New Prop. 19 property tax measure can save you money

Most California homeowners probably have heard about Proposition 19, the new property tax law that allows seniors and disabled homeowners to keep their current property tax rate when they sell their home and buy a new one. But they may not know how to apply this new law when moving to a new home.

It’s the state’s largest expansion of property tax benefits in decades, basically allowing qualified homeowners to take their Prop. 13 tax base with them anywhere in the state, no matter the price of their new home.

Under Prop. 13, tax hikes are capped at 2% a year, meaning the longer you own your home, the lower your property taxes relative to the market value of your abode. But for most homeowners, they lose their Prop. 13 tax break when they sell their old home and see their new tax jump to the full market value of their new one.

Voters adopted Prop. 19 in November, and the law took effect April 1.

If you are 55 years or older, a person with a severe disability or a victim of wildfires or natural disasters, you can move to any home in the state, regardless of the home’s price. Your tax is unchanged up to the value of your old home. If your new home costs more than your old one, you pay an additional amount based on the market value over your old home’s price.

With this hot seller’s market, a smaller home does not necessarily mean it will be less expensive.

As a Realtor, I have worked with clients who worried about property tax increases if they sold their family home to downsize, right size, move to a different part of the state, or move closer to family or healthcare facilities.

When you’re used to a low property tax bill, it can be a shock to your monthly expenses when buying a replacement home includes a huge property tax increase – especially if you  have lived in your current home for many years.

Some older homeowners feel trapped because they can’t leave their current home, even if it no longer fits their needs, because they are on a fixed income and can’t afford to move.

Taking advantage of Prop. 19 may be daunting. But as time passes, more and more tax assessors are providing online links to forms and resources to help homeowners understand how to benefit from this new law.

Here are some of them:

In addition, ask for help from a qualified tax expert or an attorney.

Not all counties are the same, and with any new law, there are many questions about how the law applies to each person’s situation.

Moving into a home after your kids have left should not equal a huge new property tax bill. Do your research so that you can use your money for your future rather than to pay more in property taxes.

Leslie Sargent Eskildsen is an agent with RealtyOne Group West and a board member at the California Association of Realtors. She can be reached at 949-678-3373 or leslie@leslieeskildsen.com.


Source: Orange County Register

Be First to Comment

Leave a Reply

Your email address will not be published. Required fields are marked *