Proposition 19 California Increases Property Taxes on Inherited Homes

Details for the Proposition 19 Initiative

Homeowners age 55+ or who’ve lost a home in a natural disaster and may have been concerned to move out because of higher property taxes can now transfer their tax assessment to a more expensive home three times (rather than the single allowance previously on the books). Older homeowners in California had just a one-time opportunity to retain their existing tax benefits if they moved to a home of equal or lesser value within the same county. They also could do this between Los Angeles and nine other counties. If they failed to satisfy the requirements or moved to a more expensive home, they’d be subject to the full amount in property taxes.

Blended Taxable Value

These older Californians will be able to blend the taxable value of their existing home with the value of a new, more expensive home they purchase. This will mean potential property tax savings of several thousands of dollars a year.

Proposition 19 Home

Other Tax Benefits Part of Proposition 19

Proposition 19 also provides tax benefits to severely disabled residents and homeowners who have had their property ruined by a natural disaster or other catastrophe.

Background

In 1978, California enacted legislation designed to keep property taxes low. The state’s voters passed Proposition 13 in 1978 to cap property taxes on properties at 1% of the sales price and the property taxes can only increase a maximum of 2% per year. Thus, California property owners are paying property taxes based on the price that they originally paid for the property. That price is typically much less than what it is actually valued at today. As a result, if a home’s value increases significantly, the property tax can only go up 2% a year. For older California as they age, this becomes an even better idea with the rise in California property values.

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Carpenter Wellington PLLC

Carpenter Wellington PLLC

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Ryan Carpenter serves as Attorney and Managing Director of Carpenter Wellington. Ryan advises clients across a broad set of corporate and commercial matters.