Manage episode 281589694 series 1075929
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Back in November, the “ayes” barely eked out the “nays” as Proposition 19 passed with a margin of 51% to 49%. This directly impacts the tax basis of California homeowners who are in the 55+ age bracket.
One of the benefits of Prop. 19 is that it allows you, a senior homeowner, to transfer your tax basis (1%) to any county in California, not just the 14 counties that had been participating prior to the 2020 vote. The second benefit is that a tax basis can be transferred up to three times—a significant increase from the previous one-time cap. This gives you more flexibility if you know your next home won’t be your “forever” home.
Here’s a huge drawback, though: In order for children/grandchildren to inherit a property from their parents/grandparents and keep the same tax basis, the property must be used as a primary residence. So if, for example, a son is living in Florida and his California-based parents pass away, he’d have to move into their house permanently so he could keep their tax basis; if he plans to hold onto it as a second home or rental property, then the property must undergo a tax assessment for 1% of its current value.
If you have more questions about Prop. 19 or need some help with your buying, selling, or investing plans, reach out by phone or email anytime. I’m always here to help you make sense of the market, and I look forward to hearing from you soon.