Starting on April 1, millions of older homeowners (age 60 and over), people with severe disabilities, and victims of wildfires or natural disasters can achieve significant property tax savings when moving to a new home, thanks to Proposition 19. This new law allows these qualifying homeowners to transfer the taxable value of their primary residence to:
A replacement primary residence
Anywhere in the state
Regardless of the value of the replacement primary residence (with adjustments if "greater" in value)
Within two years of the sale
Up to three times (but without limitation for those whose houses were destroyed by fire)
Here is a sharable PDF packet of high-level information about Prop 19 provided by the California Association of Realtors. Share this with your clients to get them up to speed!
Seniors 55 and older and Disabled wildfire victims:
Effective Date: April 1, 2021. Do not move until AFTER this date!
Who: Persons over 55, severely disabled or victims of natural disasters.
What: Transfer tax basis in primary residence to another property.
When: Starting April 1, 2021.
Where: Anywhere in the state of California.
Timing: Transfer must be done within 2 years of the sale of the principal residence.
Impact: Tax basis up to the value of property sold will be transferred to new property, Any additional value will be assessed at market at time of acquisition.
Limits: Up to 3 times in lifetime.
Parent child and grandparent grandchild transfers:
Effective date: February 16, 2021. Transfer properties BEFORE this date!
Who: Parents (Grandparents if no living children).
What: Transfer tax basis in property.
When: Before February 16, 2021.
Impact: Only able to transfer tax basis in principal residence to heir who will be living in the property as a principal residence.
Limits: Existing tax basis plus $1,000,000 exemption, any additional value will be assessed at market at the time of transfer.
If you have any questions please call us at (858) 560-4781.
Information provided by RELAW, APC. www.relawapc.com
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