With the passage of Proposition 19 during the last election, the laws regarding property tax reassessment are going through a thorough overhaul. As we discussed last month, the changes make it much harder to leave real property to children without it being reassessed, as now it has to be the primary residence of both the parent and the child who inherits to avoid reassessment for up to $1,000,000 over the current taxable value of the property. This part of the law takes effect in mid February, so if you have questions about it now is the time to ask.
However, for people over 55 years old who are looking to move but stay in-state, Proposition 19 does provide benefits. Under the current law people over the age of 55 can move within the same county to a property of equal or lesser value and keep the same taxable value as the property they moved from. There are a few counties that allow homeowners to move into the county and keep the same taxable value if their old property was of equal or lesser value. These counties are currently the exception not the rule.
However, beginning April 1, 2021, when this provision of Proposition 19 comes into effect, a person or couple over the age of 55 can move anywhere in the state and keep the same taxable value if the property moved into has the same or lesser value as the property they moved from. If the property moved into is more valuable than the property moved from then the difference is added to the taxable value. For example, if the property moved from is worth $1,000,000 with a taxable value of $100,000 and the property moved into is worth $1,200,000, then the taxable value for the new property will be $300,000. This exemption can be used up to 3 times during a person’s lifetime. If you would like to us to review your real property situation and how this law may affect you, please call our office.