I feel that being informed when a Real Estate Agent or a Mortgage Broker/Lender is important and can help provide better service to one’s clients. This is a subject not everyone understands:
California Proposition 19 went into effect four years ago, and since then thousands of homeowners have moved to California and have kept their property taxes relatively low.
The purpose of this proposition was to encourage older residents to downsize their homes, but avoid paying higher property taxes when they move. It was intended to aid homeowners over the age of 55 (as well as disaster victims and people with disabilities), to take their home’s Prop 13-constrained tax basis with them when they move. (It also limited property owners’ ability to pass on their lower tax bases to their children, which has been much more controversial).
Before Prop 19, homeowners could only transfer their tax basis to a home of equal or lesser price, and only in 10 counties. Prop 19 opened the mechanism to the entire state and allowed transfers to more expensive homes.
Homeowners can apply for the transfer if the replacement home is built or bought within two years of the sale of the original home. The Prop 19 benefit only kicks in after the original home is sold or the replacement home is purchased, whichever is later.
Since the passage of this proposition, the data collected indicates that Prop 19 may have led to some homes changing hands that wouldn’t have otherwise, a small step in helping to mitigate the housing shortage we are experiencing throughout California.
