The Biggest Tax Law Change You Need to Know
Posted on Mar 2, 2021
Here’s why you should explore the impact of Proposition 19, a new tax law.
The property taxes on your principal residence are based on the purchase price of the home back when you first bought it. The increase in those property taxes is determined by a piece of legislation called Proposition 13 that was passed by California voters back in 1978. In November 2020, California voters approved Proposition 19, which impacts property taxes for a specific segment of homeowners—those 55 years of age and older, those who are severely disabled, and those who were victims of wildfires.
If you fall under that classification, then you can take your property tax base from your current principal residence to a new principal residence. Essentially, Proposition 19 allows you to benefit from that lower base in a new home, saving you a bunch of money in property taxes every year. Note: If the value of the property that you’re purchasing is greater than that of the property you’re selling, then certain calculations must be made. If you’d like to move closer to your children or grandchildren, cut down your commute time by living closer to work, increase your access to recreational activities, or transition into a home that better accommodates your needs, you can pack up your lower property tax base and take it with you.
Proposition 19 has its nuances, so I’d be more than happy to connect you with a professional who can explain the finer points to you very carefully. You owe it to yourself to get informed on this critical change in tax law. Please reach out to me today via phone or email and let me know how I can help. I look forward to hearing from you.