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How Does Prop 19 Change the Senior Tax Transfer Basis?

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Recently the California Association of Realtors came out with a “Quick Guide” explaining Proposition 19 that has replaced the prior Propositions 60 and 90.  

Prop 19 allows a homeowner who is 55 years of age or older, severely disabled or whose home has been substantially damaged by wildfire or natural disaster to transfer the taxable value of their primary residence to a) a replacement primary residence anywhere in the state, b) regardless of the value of the replacement primary residence (but with adjustments if replacement has greater value), c) within two years of the sale and d) up to three times (or as often as needed for those whose houses were destroyed by fire).  

The two prior rules of propositions 60 and 90 limited the ability to transfer a tax base to one time only  – and only if the replacement primary residence was “equal or lesser value” than the one just sold.  There is a big difference with the replacement of Proposition 19. Many seniors had wanted to sell to move closer to family members and were unable to transfer their tax base.  Now that becomes possible anywhere in the state of California as long as it is their primary residence.

This new rule took place as of April 1, 2021.  If you have questions or if your sale qualifies, you can go to www.BOE.CA.GOV/PROP19/#FAQS.  And it is always a good idea to consult and seek advice from a qualified California Real Estate Attorney or your tax advisor.  The new rules on intergenerational transfers took effect on February 16, 2021.

Claims can be made with forms provided by the local county assessor’s office. Talk with your CPA for advice on how Proposition 19 affects your personal situation. 

Cindy Royall Libonati is a Realtor® with Sotheby’s International Realty, Encino/ Calabasas Brokerage. She can be reached at cindyagent@aol. com or 818.421.4468. DRE# 00582036.


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