As of Thursday, April 1, California’s seniors, severely disabled persons, and victims of wildfires or natural disasters will be able to transfer the taxable value of their original residence to a replacement residence up to three times during their lifetime anywhere throughout the state. Managing editor Tami Roleff explains…
California voters approved Proposition 19, The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act, last November. The act allows seniors over age 55, the severely disabled, and victims of wildfires or natural disasters to avoid significant property tax increases up to three times. For seniors, the original and replacement residence must be eligible for the homeowners’ or disabled veterans’ exemption. The replacement residence must be purchased or newly constructed within two years of the sale of the original home. If the market value of the replacement residence is greater than the market value of the original residence, the difference will be added to the taxable value at the time of transfer. For example, an original home was sold and had a full cash value of $400,000 and a factored base year value of $100,000 at time of sale. If a replacement home is purchased for a full cash value of $600,000, the difference of $200,000 ($600,000 – $400,000) is added to the factored base year value of $100,000. Thus, the replacement home will have a new base year value of $300,000 ($100,000 + $200,000).
https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200ACA11
Seniors, age 55 and older, or those severely disabled must meet specific requirements to qualify. The original and replacement residence must be eligible for the homeowners’ or disabled veterans’ exemption. An application must be filed with the County Assessor to transfer the taxable value. Lastly, the replacement residence must be purchased or newly constructed within two years of the sale of the original home. If the market value of the replacement residence is greater than the market value of the original residence, the difference will be added to the taxable value at the time of transfer.
For victims of a wildfire or natural disaster, the same conditions and requirements apply as the taxable value transfer for seniors but there are no age requirements. The residence must be substantially damaged to qualify, and the damage must be from a wildfire or a Governor proclaimed disaster.
Pending legislation may impact the operation of Proposition 19, and taxpayers are strongly encouraged to visit the BOE website for the latest information, additional details and resources, and answers to frequently asked questions (FAQs).
