Another part of Proposition 19 that gets quite a few questions is the section regarding, base year taxable value transfer. Below are the “broad strokes” of this section of the California property tax law. This is not to be construed as tax or legal advice and you should consult with a licensed professional for veriﬁcation and additional details.
Base Year Taxable Value Transfer
Proposition 19 (operative 4/1,2021) revised the California property tax laws to allow homeowners over the age of 55, or severely and permanently disabled (of any age) to transfer the “taxable value” of their principal residence to a replacement property, anywhere in the state.
Calculating the new transfer value:
1. There is no limit to the purchase price of the newly acquired property but the amount that is greater than the sales price of the previous residence (“excess value”) is added to the transferred taxable value from the previously owned property.
a. Exceptions to adding the excess value to the transferred taxable value are as follows:
i. If the new property is purchased within 1-year of selling the previous residence and the new property does not exceed the previous residence’s sales price by more than 105%.
ii. If the new property is purchased within 2-years of selling the previous residence and the new property does not exceed the previous residence’s sales price by more than 110%.
Here is an online calculator that will allow you to compare the before and after Proposition 19 property taxes for your speciﬁc situation: htps://prop19.titletools.net/ .
Note: applying for the Proposition 19 calculation is optional, so if you do not beneﬁt by its calculation, you will stay with the normal property tax calculation.
- Replacement residence must be purchased or newly constructed within two years of the sale of the original property.
- Claimant must be at least age 55 years or older at the time the original property is
- Both the original and replacement properties must be eligible for the homeowners’ or disabled veterans’ exemption. The claimant must own and reside in the original property at the time of its sale or within two years of the purchase or new construction of the replacement.
- Either one or both the sale of the original property or the purchase/completion of new construction of the replacement must occur on or atier April 1, 2021.
- The original property must be sold, and the replacement purchased for consideration. Consideration is deﬁned as something of value such as payment of cash, creation or cancellation of debt, or exchange of other property.
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