Prop 19 Explained. How it affects you?

California Prop 19 explained.

Inheritance taxes and transfer taxes when buying a new property to those who qualify such as the elderly and the disabled are also explained in the video.

TO APPLY FOR HOMEOWNER EXCEPTION: Click the county assessor in the link below and ask them for the application.

Contact me at [phone]
10072 Adams Ave, Huntington Beach, CA 92646

Bibi Mathew
DRE #02064299
First Team Real Estate

Bibi Mathew is a realtor that serves Huntington Beach, Orange County, and Los Angeles County.

If you’re a Californian, prop 19 has huge implications for your property taxes. For seniors, the disabled, and victims of natural disasters, it has improved the benefits significantly which I’ll dive into right now. At the end of the video, I’ll explain how prop 19 affects those inheriting a property.

Prop 19 which became effective starting April 1, 2021, is no joke. It allows seniors, the disabled, and victims of natural disasters to transfer their low tax assessment when they sell and buy a new home.

Here’s how it works, let’s say you have a million-dollar home that has a tax assessment of $300,000 since you had it for a long time. You can now sell that home, buy a new home worth $1 million and keep the same $300,000 tax assessment rather than getting reassessed. Prop 19 replaced prop 60/90 which allowed you to this once, but only in select counties, and only if the replacement home was the same or of lesser value. But since this was so limiting, they found that most people weren’t using it. So prop 19 improved those criteria. You can now do it up to 3 times. So, if a few years from now, you want to transfer again, you’re able to. Now you can sell your home in California and transfer your tax benefit to any county in California. You can now also purchase a replacement property that’s worth more as well. Here’s an example of how that can work.
Let’s say you sold that $1 million from before which has only a $300,000 tax assessment and bought a $2 million dollar home. You’ll be able to transfer the previous tax assessment for the first $1 million of this home and pay the full tax on the second million. So your final tax assessment will be $1.3m on this $2 million dollar home.
Now, I a realtor not a CPA, so here is my favorite saying “Consult your tax professional”

Here are some of the requirements.
1.Both the property being sold and the replacement property has to be a primary residence.
2. To be qualified as a senior, one of the home owner has to be 55 year or older when the original property is sold.
3.The replacement property has to be purchased within 2 years of the sale of the original property. You must have homeowners exemption on the property being sold and the home being purchased. If you haven’t done that on your current, click the link in the description and it’ll guide you with the steps and it will save you about $70 a year in taxes.

When it comes to inheritance tax, prop 19 has replaced prop 58. This only applies to property being inherited from a parent to a child or grandparent to a grandchild, so if you inherited a property from your rich uncle, it doesn’t apply to you. (sorry)

Here are the requirement:
It has to be a primary residence to qualify. So no, rentals. No commercial property.
2.Property must be the primary residence of parent or grandparent
3. Property must become the primary residence of the child or grandchild within a year and homeowners exemption must be filed within a year. This is a change from prop 58 which used to allow the child to use the inherited property as a rental.
4. To transfer benefit from grandparent to grandchild only applies if the parents are diseased.