There are new tax benefits that California seniors can take advantage of that will allow them to move without big tax increases.
Prop 19 new tax benefits (effective April 1, 2021) is available for homeowners 55+, severely disabled, or victims of wildfire or natural disaster. Benefits include:
Moving Anywhere in California: Prop 19 removes location restrictions on property tax transfers allowing the transfer of the property tax base of an existing home to a new home anywhere in California.
Moving to Any Home Regardless of Price: Prop 19 removes price restrictions on property tax transfers allowing the transfer of the property tax base of an existing home to your new home regardless of price (with an adjustment upward to the tax basis if the replacement property is of greater value).
Transferring The Low Property Tax Base of The Original Home to a new home up to THREE times (or more for victims of wildfire or natural hazard).
This could result in substantial savings in annual property taxes!
How to Determine The Tax Basis of The New Property
Rule 1: If the replacement property residence (RPR) is of equal or lesser value than the original primary residence (OPR), then the taxable value of the RPR remains the same as that of the OPR.
Rule 2: If the RPR costs more than the taxable value of the OPR, the tax basis of the new property will be adjusted by adding the difference in sales price to the taxable value of the OPR.
EXAMPLE:
Original primary residence (OPR) taxable value: $500,000
OPR sold for: $800,000
Replacement primary residence (RPR) purchase price: $900,000
The difference between the sale price of the OPR and the purchase price of the RPR is: $100,000
The taxable value of the RPR is: $500,000 plus $100,000 = $600,000
Details are still in the works so contact me for more information.