Proposition 19: What California Homeowners Need to Know

Proposition 19, passed by California voters in 2020, reshaped the way property taxes work for seniors, people with disabilities, wildfire/disaster victims, and families inheriting real estate. It provides both important tax relief opportunities and new tax obligations. Here’s a clear breakdown of what Prop 19 means for you, your family, and your property.

Key Rules Under Proposition 19:

Part A: Tax Portability for Homeowners 55+, Disabled, or Disaster Victims:

• Eligible groups include homeowners age 55 or older, severely disabled individuals, or those who lost a home in a wildfire or natural disaster.

• You can transfer your current property tax base to a new home, even if it’s more expensive. You’ll only pay increased taxes on the difference between your old home’s value and the new one.

• This benefit can be used up to three times in a lifetime.

• You can move anywhere within California without losing your lower tax base.

Part B: Property Taxes on Inherited Homes:

• When parents or grandparents pass down a property, the child or grandchild can only keep the lower property tax base if they use the home as their primary residence.

• If the inherited property becomes a rental, vacation home, or investment property, it will be reassessed at market value.

• After February 16, 2023, inherited homes are subject to upward reassessment, adjusted for inflation.

• Grandparents can transfer property directly to grandchildren only if the parents are already deceased.

• Much of the new tax revenue is directed to fire protection services, schools, and local governments.

Pros of Proposition 19:

✅ Tax Relief for Seniors & Disaster Victims – Allows downsizing or moving without losing your favorable tax base.
✅ Flexibility in Moving – You’re no longer tied to your county; you can move anywhere in California.
✅ Portability Across Price Points – Buy a more expensive home and only pay higher taxes on the difference.
✅ Funding for Essential Services – Generates additional revenue for fire protection, schools, and local governments.

Cons of Proposition 19:

⚠️ Inheritance Limitations – Families may face higher property taxes when inheriting property unless they live in it full-time.
⚠️ Loss of Generational Wealth Strategy – Properties used as rentals or second homes can no longer keep the low property tax base, increasing costs for heirs.
⚠️ Potential Tax Hikes – For inherited homes not used as a primary residence, reassessment can lead to a significant property tax increase.
⚠️ Complex Rules – Families need to plan carefully, as mistakes in how property is passed down could lead to unexpected tax bills.

Bottom Line:

Proposition 19 gives much-needed mobility and tax relief to older homeowners, disabled individuals, and disaster victims, but it also limits the ability of families to pass down property tax benefits to future generations. Whether you’re planning to move or considering how to pass property to your heirs, understanding Prop 19 is essential to making smart financial decisions.

If you would like, I can connect you with a trusted lender who can run sample payment scenarios based on your numbers. Whether it’s homes in your area, your down payment, or your credit situation; so you can see exactly what this rate cut means for you.

As always, I am here for all of your real estate needs, and I truly appreciate the referrals you send my way. I treat each one with the utmost care, not only because it reflects on me, but because I want you to look good as well!

- Joshua Vigil

Disclaimer:

This article is provided for informational purposes only and does not constitute legal, financial, or tax advice. Proposition 19 rules and their application can vary depending on your specific circumstances. For guidance tailored to your situation, you should consult with a qualified attorney, tax professional, or financial advisor. Real estate laws and tax regulations are subject to change, and while every effort has been made to ensure accuracy, no guarantee is made regarding completeness or applicability.

Please feel free to share with anyone you know who can benefit from this! Have a great weekend! 🏡👨‍👩‍👧‍👦😊

Realtor Joshua Vigil
DRE# 01989117
The Hier Advantage Real Estate Sales & Service