PROPOSITION 19

Hello and Welcome to Lori Prizmich and Associates! We are so glad to see that you are interested in learning more about Proposition 19, and how you can benefit from it! Below is some basic information about Proposition 19 to get you started.

What is Proposition 19? 

On November 3, 2020, California voters approved Proposition 19, the Home Protection for Seniors, Severely Disabled Families and Victims of Wildfire or Natural Disasters Act. Proposition 19 is a constitutional amendment that limits people who inherit family properties from keeping the low property tax base unless they use the home as their primary residence, but it also allows homeowners who are over 55 years of age, disabled, or victims of a wildfire or natural disaster to transfer their assessed value of their primary home to a newly purchased or newly constructed replacement primary residence up to three times. 

The new law will make important changes to two existing statewide property tax saving programs: 

  1. Replace Proposition 58 (1986) and Proposition 193 (1996) by limiting parent-and-child transfer and grandparent-to-grandchild transfer exclusions.
  2. Replace Proposition 60 (1986) and Proposition 90 (1988) programs for home transfer by seniors and severely disabled persons. 

                                      (City & County of San Francisco - Office of the Assessor-Recorder)

 

 Below is a simplified break-down comparison of how Proposition 19 will affect base year value transfers of persons at least 55 years of age. 

BASE YEAR VALUE TRANSFER - PERSONS AT LEAST AGE 55

                                                                       Current Law                                         Proposition 19

    Type of Property                      - Principle Residence                                     - Principle Residence

          Timing                               - Purchase or newly construct                        - Purchase or newly construct

                                                      residence within 2 years of sale                     residence within 2 years of sale

      Location of                             - Same County                                              Anywhere in California

Replacement Home                     County with intercounty ordinance

                                                      (only 10 counties applicable)

       Value Limit                           Equal or lesser value                                    Any Value

                                                      - 100% if replacement purchased/new             -Amount above 100% is added

                                                         construction prior to sale                               to transfer value

                                                      - 105% if replacement purchased/new

                                                        construction in first year after sale

                                                      - 110% if replacement purchased/new

                                                        construction in second year after sale

How Many Transfers?                 One time                                                   Three times

                                                   Exception: After using once for age, a 

                                                     second time for subsequent disability

Implementing Statute                Revenue & Taxation Code section 69.5         To be determined

                                                     (implements Propositions 60/90/110)

    Important Dates                     - Through March 31, 2021                             Effective April 1, 2021

 

Additionally, here are some quotes from the actual Proposition 19 legislation. 

 

  • "SEC. 2.1. (a) Limitation on Property Tax Increases on Primary Residences for Seniors, the Severely Disabled, Wildfire and Natural Disaster Victims, and Families. It is the intent of the Legislature in proposing, and the people in adopting, this section to do both of the following:  (1) Limit property tax increases on primary residences by removing unfair location restrictions on homeowners who are severely disabled, victims of wildfires or other natural disasters, or seniors over 55 years of age that need to move closer to family or medical care, downsize, find a home that better fits their needs, or replace a damaged home and limit damage from wildfires on homes through dedicated funding for fire protection and emergency response." 
  • "SEC. 2.1 (b) Property Tax Fairness for Seniors, the Severely Disabled, and Victims of Wildfire and Natural Disasters. Notwithstanding and other provision of this Constitution or any other law, beginning on and after April 1, 2021, the following shall apply: (1) Subject to applicable procedures and definitions as provided by statute, an owner of a primary residence who is over 55 years of age, severely disabled, or a victim of a wildfire or natural disaster may transfer the taxable value of their primary residence to a replacement primary residence located anywhere in this state, regardless of the location or value of the replacement primary residence, that is purchased or newly constructed as that person's principle residence within two years of the sale of the original primary residence."

Attached below is a pdf version of the full Proposition 19 legislation. Highlighted are the areas that pertain to the 55 and above group.