As a homeowner in California, it's essential to stay informed about the latest changes in property tax laws that could impact you and your property. One such recent change is Proposition 19, which has implications for homeowners and the assessors exemption. Let's delve into what Prop 19 entails and how it affects homeowners in California.
What is Proposition 19?
Proposition 19, also known as the "Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act," was passed by California voters in the November 2020 election. The proposition includes two main components: property tax portability and changes to the assessors exemption for homeowners.
Changes to the Homeowners Assessors Exemption:
One of the significant aspects of Proposition 19 is the modification of the assessors exemption for homeowners who are over 55, severely disabled, or victims of natural disasters. Under Prop 19, eligible homeowners can transfer their current property tax base to a new home anywhere in California, regardless of the value of the new home or its location. This allows homeowners to retain their property tax benefits when moving to a new residence.
Additionally, Prop 19 also limits the parent-child transfer exclusion for property tax purposes. It restricts the ability to transfer property tax assessments to a child or grandchild unless the recipient uses the property as their primary residence and the property's fair market value does not exceed the original property's assessed value by more than $1 million. The person, child or grandchild, receiving the property must live in the house, as their primary residence, within the first year of the transfer. They must also file for Homeowners Exemption within that first year of transfer to qualify for the exclusion.
Implications for Homeowners:
For homeowners over 55, severely disabled individuals, or those who have been affected by wildfires or other natural disasters, Proposition 19 offers greater flexibility when it comes to relocating without facing significant property tax increases. However, it's important to carefully consider the implications of the parent-child transfer exclusion limitations, especially when it comes to estate planning and passing on property to future generations.
What You Need to Do:
If you believe you may be eligible for the assessors exemption under Proposition 19, it's crucial to consult with a qualified real estate attorney or tax professional to understand how the changes may affect you personally. They can provide personalized guidance based on your specific circumstances and help you navigate the complexities of the new laws.
In Conclusion:
Proposition 19 brings significant changes to the assessors exemption for homeowners in California, particularly for those over 55, severely disabled individuals, and victims of natural disasters. By staying informed and seeking professional advice, homeowners can make informed decisions about their property tax benefits and any potential real estate transactions in the future.
We hope this blog has provided you with valuable insights into Proposition 19 and the assessors exemption for homeowners. If you have further questions or need assistance navigating these changes, feel free to reach out to our team of real estate experts for personalized guidance.
