Understanding Proposition 19: A Comprehensive Guide to California Property Tax Changes

In California, homeowners aged 55 or older have an opportunity to transfer their existing property taxes to a new primary residence, thanks to Proposition 19, also known as Prop. 19. This blog post will provide a thorough understanding of Prop. 19, its significance, and how it can benefit homeowners in the state.

What is Proposition 19?

Proposition 19 was passed in November 2020 and became effective on February 16, 2021, bringing three vital components into play:

1. Property Tax Transfers for Individuals 55 and Older:

Prop. 19 focuses exclusively on property taxes, distinct from income taxes or capital gains. If you're 55 or older, you can transfer your current low property taxes to a new home.

2. Changes in the Inheritance of Property:

Prop. 19 alters the way property taxes are handled when property is inherited within a family. This change went into effect on February 16, 2021.

3. The Creation of the California Fire Response Fund:

Prop. 19 establishes the California Fire Response Fund, intended to support local fire staffing and emergency response, including CalFire.

Complete Selling Solution

We handle it all, at no upfront cost to you.

Why is Prop. 19 Important?

To comprehend the significance of Prop. 19, let's first look back to 1978 when Proposition 13 limited property tax increases to just 2% per year, based on the property's value at the time of sale. Prop. 19 builds upon the foundation laid by Prop. 60 and Prop. 90, which allowed homeowners aged 55 and older to transfer their tax basis to a property of equal or lesser value within the same or participating counties. However, Prop. 19 takes it a step further, permitting tax basis transfers to any property in any of California's 58 counties. This expansion also extends to those who are severely disabled or victims of natural disasters, such as wildfires.

How to Qualify for Prop. 19?

To qualify for Prop. 19, if you're married, only one owner on record needs to be 55 or older. Both the property you sell and the one you purchase must be considered primary residences according to the tax code. Consulting a tax advisor or expert is recommended to determine if your unique situation qualifies.

Do I Have to Buy or Sell First?

You can buy your new home or sell your old one first – the order doesn't matter. What's important is that both transactions must be completed within two years of each other. You can take advantage of Prop. 19 up to three times, even if you previously benefited from Prop. 60/90.

Is There a Limit to the Home Price?

No, there is no specific price limit for the home you can buy, but there is a limit to the amount of your tax basis that you can transfer. The amount you can transfer is limited to the value of the home you sell.

Let's illustrate this with two examples:

Example 1:

The homeowner sells their primary residence for $2 million and buys a new home for $1 million. Their current tax basis is $350,000, and they pay about $4,000 annually in property taxes. After transferring their tax basis, they continue to pay $4,000 per year on their new residence, thanks to Prop. 19.

Example 2:

The homeowner purchases a new home for $2.5 million after selling their $2 million primary residence. The county assessor assesses the new home, with $2 million valued at $350,000 and the remaining $500,000 at $850,000. This results in an estimated yearly property tax of approximately $10,200, significantly less than the $30,000 they would pay without Prop. 19.

Now, let's delve into the implications of Prop. 19 on inherited properties:

The Impact of Prop. 19 on Inherited Properties

Before Prop. 19, when real estate was passed down from parents to children or grandparents to grandchildren, there was no reassessment of property taxes. This meant that the taxable value of the property remained the same as of the date of the original owner's death, whether it was the primary residence or an investment property.

However, Prop. 19, effective from February 16, 2021, introduced changes. Any transfer of inherited property on or after this date will be subject to new rules. For investment properties, the assessor's office will reassess them to fair market value, resulting in increased property taxes. There's an exception for the family home or primary residence, which can be protected from substantial tax increases.

How to Protect Your Inherited Property from Tax Increases

To benefit from Prop. 19, there are specific steps to follow:

  1. Move into the Inherited Home: Within one year of the parent's passing, one of the children must move into the home and make it their primary residence. This step is crucial for preserving the taxable value.

  2. Fill Out the Required Forms: Within a year, the child living in the home should fill out either the homeowner's exemption or disabled vet's exemption form, depending on eligibility. Additionally, the intergenerational transfer exclusion claim form should be submitted within three years to secure the benefits of Prop. 19. These forms can be obtained from the local county assessor's office.

  3. Maintain the Primary Residence Status: As long as the child maintains the inherited home as their primary residence, the taxable value remains unchanged. If multiple children inherit the property, only one needs to move in. However, if all children move out, the taxable value may be reassessed at fair market value.

Calculating Taxes on Inherited Property

To illustrate the calculation for property taxes after inheritance, consider the following example:

  • Taxable Value: $300,000 (including the land and improvements)
  • Allowance: $1 million (subject to annual adjustments)
  • If the property value remains at or below $1.3 million, property taxes remain the same. If the value exceeds this amount, taxes will increase.
  • For instance, if the property value is reassessed at $1.5 million, the difference is $200,000. Adding this to the taxable value results in a new taxable value of $500,000, leading to increased property taxes.
Top Questions To Ask Your Real Estate Agent When Selling
You need to start interviewing agents now to discover the best one to sell your house when you're ready to sell next year. When choosing an agent to represent you in the sale of your house, there are many factors to take into account. In this video, we discuss some crucial questions to think about before choosing the best real estate agent to sell your house.
When Is the Best Time To Sell a Home in Santa Clara?
In real estate, as in life, timing is everything. A real estate transaction could mean the difference between tens of thousands and hundreds of thousands of dollars. We've all heard that the best time to sell your home is in the spring, but the truth is that the best time to sell your home may not be in the spring. In this video, I'd like to explain the timing in our local market and tell you when it's best to sell your home in Santa Clara.
Top 9 Most Common Seller Mistakes
Selling a home is one of the biggest events that can happen in a person’s life. Whether you are downsizing, relocating, or selling your late mother’s home, it’s a monumental event. Considering the price of homes in Santa Clara and the active Santa Clara real estate market, you would think that selling a home in Santa Clara wouldn’t be so difficult. However, as a home seller, be aware that mistakes can be costly and result in the loss of tens, if not hundreds, of thousands of dollars.
Understanding Real Estate Commissions
In most real estate transactions, there are two agents involved, with one side representing the seller and the other the buyer. Each of these agents is paid a commission when the sale closes. In our current market, buyer agents are typically compensated at a 2.5% commission rate. This is set on the MLS when the property is first listed. It is important to understand how much the listing agent will offer as compensation to the buyer’s agent. Once you understand what portion of the commission is being offe
Should I Fix Up My House or Sell It As-Is?
If you have been thinking of selling your home and dreading all the costly repairs that need to be done before you sell, you may be wondering if it makes sense to just sell your home “AS-IS”. This is one of the most frequent questions or concerns I get from sellers, and the answer depends on several variables. For those of you stuck in this predicament, let’s go over the questions you should be asking yourself to determine the best course of action for you.
Selling Your Home in a Shifting Real Estate Market
Santa Clara's real estate market has shifted. Homes are taking longer to sell, and there are more homes on the market. Home values have also declined since their peaks and are anticipated to continue to decline. What can you do as a home seller to sell your house quickly and for a good price in this market? In this video, we will discuss the current situation of the local market, what to expect in the future, and what you should do to sell your home.
Selling a house that has been staged can result in a higher sale price and a faster sale. Home staging is a marketing technique that transforms your average, personalized home into a showpiece that appeals to the broadest group of buyers, allowing it to sell quickly and at the best price.
Everything Sellers Need to Know About Escrow
As a home seller, you have a lot of things to do between now and the close of escrow. In the purchase agreement, the buyer may have specified a 30-day closing period or even a shorter closing period. In this video, I will walk you through all of the steps of the escrow process, discuss the process, and prepare you for what to expect.
How to Buy and Sell a Home at the Same Time
Are you in the market for a new home but unsure how to navigate the process of buying and selling at the same time? Many homeowners face this challenge, but it is doable with the right strategy and guidance.We'll cover everything you need to know to successfully buy and sell a home at the same time, from timing your transactions to evaluating your financing options. So, whether you're a first-time buyer or an experienced investor, stay tuned to find out how to make your next move a success.
5 Ways to Sell Your Home
Not all homeowners want to sell their homes the usual way or even have their homes listed on the MLS. Maybe they need to sell quickly or don't want to deal with the effort of setting up the house and holding showings and open houses. Sometimes homeowners are in the midst of purchasing a new house and want or need to sell their current property quickly in order to secure the transaction. After working with hundreds of sellers, I understand that everyone's demands are unique; therefore, I've adapted my servic
Everything you Need to Know about Prop 19
Prop 19 allows homeowners 55 and older in California to transfer their existing property taxes to a new principal residence. For example, if you currently pay $2,000 a year in property taxes, you can transfer that payment to a new property. To understand how Prop 19 works and if you are eligible, you've got to watch the whole video.
How To Compute Capital Gains of Your Home When You Sell
If you are worried about expensive commissions when selling your home, you may be overlooking a more significant expense. And that expense is capital gains. Did you know that when you sell your California property, you could face capital gains taxes of up to 40%? If you are considering selling your primary residence in California, you should understand how capital gains work. In this video, I discuss capital gains as they relate to selling a home. DISCLAIMER: I am not a tax expert. I recommend that you con
Renovate Now, Pay Later—Get Top Dollar for Your Home!
As a homeowner looking to sell your property for top dollar, you’ll want to take advantage of our “Renovate Now, Pay Later” program. With this program, you don’t need to have cash upfront to pay for renovations. Our team of expert designers, remodelers, and project managers will quickly update your home, saving you time and money.
Our Seller Services
Marketing is the process of selling a good or service, starting with identifying your consumer, promoting, and advertising the good, with the ultimate goal of selling the good for the highest return. When marketing real estate, the same concept applies. To sell the property for the highest and best return, we identify the buyer profile most interested in your home, position the property to this profile, advertise the home to the market, and work towards generating multiple offers. At the Brasil Group, we re
What We Do For Our Sellers
Our home selling service, the Complete Selling Solution, is meticulously crafted to save our clients time and money while ensuring they get the absolute best price for their homes.
Maximize Your Home's Value!
Maximize Your Home’s Value with Our Exclusive Pre-Listing Renovation Consultation! Hello, Homeowners! I'm Vinicius Brasil, your trusted real estate expert from the Brasil Group, affiliated with Keller Williams. Today, I bring exciting news for those contemplating the sale of their homes. Selling your home is a significant decision, and at the Brasil Group, we understand the importance of making this process seamless and rewarding. That's why we're thrilled to introduce a special offer designed to help you
Seller Webinar Recap [12/16/23] - Everything You Need to Know Before Selling Your Home
Learn what it takes to be a successful home seller in our Silicon Valley housing market. I'm Vinicius Brasil, a Silicon Valley native and 20-year licensed real estate agent. If you're considering selling your home, there's a lot you should know first. View a recap of my online home-selling seminar. This one-hour webinar was created to help you understand all aspects of selling a home and avoid mistakes.
Sell Your Home in "As-Is" Condition
Sell Your Home in "As-Is" Condition! By opting for an AS-IS sale, homeowners can avoid the need for repairs or updates, attracting buyers willing to purchase the property in its current condition. This approach minimizes the seller's responsibilities, reduces the time the property spends on the market, and can result in competitive offers. Additionally, sellers may benefit from lower commissions and other incentives, providing a straightforward solution that suits those looking for a quick and convenient h
List Your Home for 3% or Less Total Commission!
List Your Home for 3% or Less Total Commission! Due to a recent court ruling, sellers are no longer obligated to offer a commission to buyer's agents. Our innovative commission model ensures fair compensation for buyer's agents while providing top-level support, years of experience, and robust marketing for sellers. If you're aiming to sell your home for top dollar and pay a fair commission, reach out to us for more information.
NAR Lawsuit: How Will This Change the Real Estate Industry?
Big changes are coming to real estate and real estate commissions. You may not be aware, but in late October of 2023, a ruling was made in a court case (Burnett v. National Association of Realtors) which challenged long-standing practices surrounding real estate commissions. It argued that NAR and major real estate companies had been engaging in unfair and anti-competitive practices regarding buyer agent commissions. Ultimately, the court ruled that certain practices were restrictive and mandated significan
Santa Clara Housing Market Update - February 2024
Welcome to another Santa Clara market update, where I delve into the latest developments in the local real estate scene, recap recent home sales, and provide insights into what to anticipate in the near future. In this video, we'll take a look at January's statistics, examine current home inventory levels, and discuss what implications these trends may have for the future of the housing market.


While there is controversy surrounding Prop. 19, it undoubtedly makes it easier for homeowners aged 55 and older in the Bay Area to relocate. As tax laws can change in the future, it's essential to stay informed and seek professional advice if you have questions about Prop. 19. If you're interested in selling and buying a home simultaneously, we offer special programs to simplify the process. Thank you for reading this informative post on Prop. 19. If you have any questions or would like more information, please feel free to reach out to me.

Contact Me Today

VINICIUS BRASIL, Principal Realtor
Keller Williams Thrive
19900 Stevens Creek Blvd #100
Cupertino, CA 95014
Call Me: (408) 582-3272
Email Me
Schedule a meeting
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Post a Comment