New Property Tax Laws Go Into effect April 1

 

 

Proposition 19 was approved by California voters during the November 3rd election and makes significant changes to Constitutional provisions regarding property tax rules. Some of these changes have already gone into effect and others will go into effect April 1st.

Here’s what you need to know:

Seniors & Disabled

Proposition 19 will allow those over the age of 55, the severely disabled, and victims of a natural disaster, such as a fire, flood or earthquake, to transfer their current property assessment and the property tax basis when they sell their home and buy a new one at cnyhousebuyers.com/. Eligible homeowners can now purchase a new home of any value anywhere in the state and take their lower property tax basis with them. Further, it allows them to transfer their tax basis up to three times. For many seniors who were reluctant to move and risk higher property taxes, Prop. 19 will provide an opportunity to upgrade or downsize in the California community of choice.

Inheritance of Family Property

If you are to inherit a family property from your parents, Prop. 19 limits some tax benefits that previously existed. Under the previous law, parents could pass-down a family property to their children and the assessed value for property tax purposes would remain unchanged. This translated to valuable property tax savings for many working and middle-income families. 

Now, only a parent’s principal residence may be transferred to their children, and that home must then become the child’s principal residence within one-year of the transfer. If these conditions are not met, the home will be reassessed to market value and the property taxes may increase.

Legislation still needed

Prop. 19 still requires clarification by the State Legislature to clarify and address ambiguities in the new law in order to avoid confusion and uneven application of practices across the state. I am working to advance legislation to address these issues. 

Senate Bill 539, authored by Senators Bob Hertzberg, Mike McGuire, and Ben Allen, aims to clarify several key points that are essential for the fair administration of the law, but the legislation only addresses a portion of what is needed to implement the entirety of Prop. 19 and additional legislation is still needed.