CAN I MOVE TO A NEW HOME AND KEEP MY CURRENT PROPERTY TAX BILL?
The Howard Jarvis Taxpayers Association has long supported “portability” of property tax bills to allow older homeowners to move to a new home without facing an unaffordable property tax increase. Proposition 60 (1986) and Proposition 90 (1988) previously allowed homeowners age 55 and older to buy a replacement home and transfer their current home’s property tax assessment, protected under Proposition 13 from going up more than 2% per year, to the new home.
There were some limitations on this portability: The replacement home could not be more expensive than the sale price of the former home, and it had to be located in the same county or in a county that accepted the transfers. Homeowners could transfer their base-year value property tax assessment to a new home only once in their lifetimes.
With the passage of Proposition 19 in November, these limitations have been lifted. Homeowners age 55 and older may now transfer their “Prop. 13” assessment from their current home to a replacement home anywhere in California. If the new home is more expensive than the previous home, the difference in price is assessed at “full cash value” and that amount is added to the assessment transferred from the previous home. This blended assessment becomes the new base-year value and thereafter is protected under Proposition 13 from going up more than 2% per year. Homeowners may now transfer their base-year property tax assessment three times instead of just once.
These rules also apply to homeowners who are disabled, regardless of age, and to victims of wildfires or other natural disasters as declared by the governor.
In order to qualify for the base-year value transfer, the seller must purchase or construct the new residence within two years of the sale of the previous home.
These provisions benefit taxpayers, but Proposition 19 also injured taxpayers by repealing Proposition 58 (1986) and Proposition 193 (1996), two constitutional amendments that prevented homes and other property from being reassessed to market value when transferred from parents to children or from grandparents to grandchildren. Now, with only limited exceptions, family homes and businesses that are inherited will be hit with new annual property tax bills based on the market value as of the date of transfer.
Your Howard Jarvis Taxpayers Association is working hard to reverse this portion of Proposition 19 without affecting the portability provisions that benefit homeowners. Visit our website at reinstate58.hjta.org to learn more about this effort.
There remain many unresolved questions about the implementation of Proposition 19. For more information, contact the Board of Equalization’s Property Tax Department at 1-916-274-3350, or by e-mail at PTWebRequests@boe.ca.gov, or visit the BOE website at www.boe.ca.gov/prop19 for updates.