By Ted Gaines
Word count 532
Proposition 19, The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act, was passed by voters last November, enacting significant changes to California’s property tax law. One provision of the measure – that concerning “parent-child” and “grandparent-grandchild” exclusions – triggered a massive property tax increase that took effect February 16.
Unfortunately for homeowners, the statute in its current state is a confusing mess. As a State Board of Equalization Member and dedicated taxpayer advocate, I continue to work closely with state legislators and county assessors to provide clarity and answer as many questions as possible for taxpayers affected by these provisions.
While Proposition 19 has some serious shortcomings – increasing taxes on tens of thousands of California families and making it more difficult and expensive to pass on property and family farms to your children and grandchildren – it does offer noteworthy tax benefits to homeowners who are nearing retirement, severely disabled or victims of natural disasters. Beginning April 1, 2021, qualified homeowners can transfer their low Proposition 13 tax base year value to a replacement home of any value, in any of California’s 58 counties. Homeowners who want to downsize, move closer to family, or relocate for any other reason can blend the taxable value of their old house with the purchase price of a new, and possibly more expensive home, reducing the property tax burden they would otherwise face.
When voters overwhelmingly passed Proposition 13 in 1978, it was to rein in property tax rates that had spiraled out of control as county governments routinely raised property taxes, in many cases forcing families from their homes. The landmark ballot initiative placed restrictions on how much a homeowner’s taxable value could increase every year, even if a home’s market value grew substantially.
California voters later passed Propositions 60, 90, and 110, which extended Proposition 13 protections to homeowners 55 or older and people with severe disabilities by giving them a one-time opportunity to retain their Proposition 13 tax base if they moved to a home of equal or lesser value within the same county or to one of the 10 counties with an intercounty agreement.
Proposition 19 further expands Proposition 13 benefits by allowing eligible homeowners to transfer their base year value up to three times. It also gives property owners whose homes were damaged or destroyed by a wildfire or other natural disaster the ability to transfer their Proposition 13 base year value to a new home. These provisions of Proposition 19 take effect on April 1, 2021 and give homeowners two years to transfer their base year value to a replacement residence in any county.
I support the base year transfer provisions of Proposition 19 because they allow more homeowners to take advantage of Proposition 13 protections that continue to be widely supported by California voters. While some of Proposition 19’s provisions hurt California taxpayers at a time when they need economic security the most, it’s always nice to have a silver lining.
Visit my website at boe.ca.gov/gaines for more information on Proposition 19. I encourage all homeowners to check with their County Assessor for specific county regulations, policies, and any paperwork associated with base year transfers.
Senator Ted Gaines (Ret.) was elected in November 2018 to represent the Board of Equalization’s First District. He is a leading taxpayer advocate and is committed to providing trustworthy and transparent representation for nearly ten million constituents in 30 counties of northern, eastern, and southern California. For more information, visit boe.ca.gov/Gaines.
Word count 532
Proposition 19, The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act, was passed by voters last November, enacting significant changes to California’s property tax law. One provision of the measure – that concerning “parent-child” and “grandparent-grandchild” exclusions – triggered a massive property tax increase that took effect February 16.
Unfortunately for homeowners, the statute in its current state is a confusing mess. As a State Board of Equalization Member and dedicated taxpayer advocate, I continue to work closely with state legislators and county assessors to provide clarity and answer as many questions as possible for taxpayers affected by these provisions.
While Proposition 19 has some serious shortcomings – increasing taxes on tens of thousands of California families and making it more difficult and expensive to pass on property and family farms to your children and grandchildren – it does offer noteworthy tax benefits to homeowners who are nearing retirement, severely disabled or victims of natural disasters. Beginning April 1, 2021, qualified homeowners can transfer their low Proposition 13 tax base year value to a replacement home of any value, in any of California’s 58 counties. Homeowners who want to downsize, move closer to family, or relocate for any other reason can blend the taxable value of their old house with the purchase price of a new, and possibly more expensive home, reducing the property tax burden they would otherwise face.
When voters overwhelmingly passed Proposition 13 in 1978, it was to rein in property tax rates that had spiraled out of control as county governments routinely raised property taxes, in many cases forcing families from their homes. The landmark ballot initiative placed restrictions on how much a homeowner’s taxable value could increase every year, even if a home’s market value grew substantially.
California voters later passed Propositions 60, 90, and 110, which extended Proposition 13 protections to homeowners 55 or older and people with severe disabilities by giving them a one-time opportunity to retain their Proposition 13 tax base if they moved to a home of equal or lesser value within the same county or to one of the 10 counties with an intercounty agreement.
Proposition 19 further expands Proposition 13 benefits by allowing eligible homeowners to transfer their base year value up to three times. It also gives property owners whose homes were damaged or destroyed by a wildfire or other natural disaster the ability to transfer their Proposition 13 base year value to a new home. These provisions of Proposition 19 take effect on April 1, 2021 and give homeowners two years to transfer their base year value to a replacement residence in any county.
I support the base year transfer provisions of Proposition 19 because they allow more homeowners to take advantage of Proposition 13 protections that continue to be widely supported by California voters. While some of Proposition 19’s provisions hurt California taxpayers at a time when they need economic security the most, it’s always nice to have a silver lining.
Visit my website at boe.ca.gov/gaines for more information on Proposition 19. I encourage all homeowners to check with their County Assessor for specific county regulations, policies, and any paperwork associated with base year transfers.
Senator Ted Gaines (Ret.) was elected in November 2018 to represent the Board of Equalization’s First District. He is a leading taxpayer advocate and is committed to providing trustworthy and transparent representation for nearly ten million constituents in 30 counties of northern, eastern, and southern California. For more information, visit boe.ca.gov/Gaines.
