Could you pay less in property taxes on your next California home?
Thanks to California Proposition 19, many homeowners may be able to transfer their current property tax base to a new home—potentially saving thousands each year.
If you're 55 years or older, severely disabled, or a victim of a natural disaster, this law may allow you to move within California and keep your lower tax rate. This even applies when purchasing a more expensive home - with some adjustments to the existing California Property Tax Base.
For many homeowners, this has opened the door to downsizing, relocating closer to family, or moving into a home that better fits their lifestyle—without a huge property tax increase.
Thinking about making a move? Before you buy, it’s worth understanding how Prop 19 works and whether you qualify.
California Proposition 19, which took effect in 2021, allows certain homeowners to transfer the taxable value of their current home to a new primary residence anywhere in California.
Before Prop 19, homeowners could only transfer their tax base to limited counties and often only if the replacement home was equal or lesser in value. Prop 19 significantly expanded these rules.
The goal of the law is to make it easier for homeowners, particularly Californians looking ahead at retirement years, to move without being penalized by dramatically higher property taxes.
Another key benefit of California Proposition 19 is that eligible homeowners can use the tax base transfer up to three times.
How the Property Tax Transfer Works
Under Prop 19, qualifying homeowners can transfer the taxable value of their current home to a replacement property.
Here’s how it works:
1. Sell Your Current Home
Your existing property has a taxable value (often much lower than the current market value due to long-term ownership).
2. Purchase a Replacement Home
You must purchase or build a new primary residence in California within two years of selling your previous home.
3. Transfer Your Tax Base
Your previous home’s assessed value can transfer to the new home.
If the new home is equal or lower in price, your property tax base transfers fully.
If the new home is more expensive, you can still transfer your tax base, but the difference in price is added to the transferred value.
Example
Let’s say:
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Your current home’s taxable value: $400,000
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Your current home’s market sale price: $900,000
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You purchase a new home for $950,000.
The difference between the two purchase prices is $50,000. That difference is added to your transferred tax base: New taxable value = $450,000
Without Prop 19, the new home would typically be reassessed at $950,000, significantly increasing property taxes.
