There are two important components to Prop 19 that deal with property tax benefits. The first has to do with inheriting property and the second has to do with the transference of a property tax base. Below we outline the details and benefits of each:
“Under Proposition 19, a child or children may keep the lower property tax base of the parent(s) ONLY if the property is the principal residence of the parent(s) and the child or children make it their principal residence within one year.”
Transference of Tax Base
“The other component of Proposition 19 allows homeowners who are over 55 years of age, disabled, or victims of a wildfire or natural disaster, to transfer the lower assessed property value of their primary home to a newly purchased or newly constructed replacement principal residence up to three times (or once per disaster). The tax base may be transferred to a property located anywhere in the state.”
In a nutshell, Prop 19 was written to make it more affordable for retirees and older homeowners to sell their primary residence and carry over the same, lower property tax basis when they move anywhere throughout California. Both transactions must happen within two years, but it doesn’t matter in which order. If you prefer to buy your replacement property first, you can sell your other home after and transfer the tax rate. And the good news is you are not limited to certain counties anymore - you can purchase the replacement property anywhere in California!
The bad news for those who are inheriting property is, unlike Prop 13, Prop 19 makes it harder to transfer the tax base by including more limitations. Basically, if the new owner (child, grandchild, etc.) does not move in within a year, the tax base does not transfer with the inherited property.