What is Proposition 19
Current Property Tax Rules and Exemptions
California property tax is assessed based on the property’s purchase price and the cost of any improvements to the property. Unless a “change of ownership” occurs, the assessed value of real property increases by no more than 2% annually. Because average appreciation of California real property has far exceeded the 2% annual adjustment since the enactment of Proposition 13 in 1978, long time owners of California real estate generally enjoy a very low property tax burden relative to owners of newly acquired property
New Property Tax Exemption Under Proposition 19
Proposition 19 revises the Parent-to-Child exemptions to limit (1) the types of transfers between parents and children that can be exempted from reassessment, and (2) the property tax benefit available. First, only a transfer of the parent’s principal residence to the child where the property continues as the child’s principal residence qualifies. Second, provided the transfer meets the principal residence requirements, the child’s assessed value is then determined based on whether the property’s value at the time of transfer is greater than the parent’s assessed value by more than $1 million. If the value of the property at the time of the transfer exceeds the parent’s assessed value by less than $1 million, then the child takes the parent’s assessed value. If the value of the property at the time of the transfer exceeds the parent’s assessed value by $1 million or more, then the child’s assessed value is the current value of the property less $1 million.
(55+, severely disabled, or victims of wildfires or other natural disasters)
Before Prop 19, homeowners 55 and older had a one-time benefit to retain their existing assessed property tax base if they sold their home and purchased a home of equal or lesser value within the same county. They could do the same when moving between nine other counties that participated in Prop 60/90. Effective April 1, 2021 homeowners 55 and over, severely disabled, or victims of wildfires or other natural disasters may receive a property tax benefit even when purchasing a more expensive home anywhere in California — up to three times.