Proposition 19 Explained & What It Means For You

As of April 1, 2021, all of the provisions of Proposition 19 are now in effect in California! Here’s what that is and what it means for you.

For more information on Proposition 19, please visit the LA County Assessor’s Office website HERE.

Proposition 19 Background

Proposition 13 was a previous proposition that helped California homeowners get their homes assessed less. This helped make some people’s property taxes more manageable. Additionally, Proposition 60 was another past proposition. It applied to homeowners and allowed them to transfer their assessed value, if

• the homeowner was over 55,
• their new home and the one they were selling was their primary residence,
• the new home was of equal or lesser value than their old home,
• and they could only do this transfer once in their lives

Proposition 90 had all the same rules, but it only applied to certain counties. Therefore, counties within California could choose to opt in or out.

What’s Changed

Proposition 60 and 90 no longer apply and Proposition 19 is the new law of the land. It automatically includes all counties within California. So a homeowner can now move anywhere within California and apply the tax transfer from Proposition 19. Furthermore, homeowners now get three transfers within their life instead of one. In the past, married couples only got one transfer between them, even after a divorce. This new proposition is helping to correct that.

Proposition 19 also allows homeowners to purchase a new home up to a million dollars over the selling price of their old home and still get to transfer their property tax amount. However, they only get to transfer the property taxes up to the amount the home sold for. Anything above that selling price gets taxed at the present-day amount.

The Three Main Parts of Proposition 19

1. Get rid of Proposition 60 and 90

This step has already occurred.

2. Get rid of Proposition 58

This allowed parents and grandparents to gift a home to their child or grandchild. Furthermore, they could gift the property taxes to the child or grandchild. It didn’t matter if the home was going to be a primary residence or an investment property. However, as of February 1, 2021, this is no longer the case. The gifted home now has to be the child or grandchild’s primary residence.

• Note: One caveat is if the parent or grandparent dies and their home belongs to a trust. The property then goes to the successor and Proposition 19 will not affect them.
• Note: The recipients of gifted property can only receive up to $2,000,000 worth of property without any tax consequences.

3. Caveats now apply to a wider group of people

The new rules for Proposition 19 have always applied to severely disabled people. This included people who weren’t 55, weren’t buying a home of equal or lesser value, etc. However, the new proposition will also extend to people affected by natural disasters. These homeowners will not have to match the same criteria as everyone else when transferring property taxes. This is a great benefit for people who have second homes. If the second home is destroyed by a wildfire, they are now able to buy a new one and transfer the taxes.