Presently a senior person over 55 years old can transfer their principal residence property tax basis one time, between a handful of counties in the state, and the purchased property price is limited as it has to be for less than the sales price of the sold property, or the transfer can’t be completed. Prop 19 will allow the transfer up to three times in a lifetime, anywhere within the state of California, and if the purchase price of the purchased property is higher than the sold property there is an upward adjustment for the difference in pricing. It also extends the transfer/portability capability to people with Severe Disabilities, Wildfire, and Natural Disaster Victims.
This property tax portability capability will give some latitude to people locked into older properties that no longer meet their needs, the ability to make economic sense in relocating, and staying within California. At a time when 4.1 million homeowners will be eligible to port their Prop 13 tax base starting in 2021, it will open up tens of thousands of housing opportunities to make homes more readily available for first-time homeowners, families, and Californians throughout the state.
Prop 19 also limits property tax increases for victims of wildfires to replace a damaged home and limit damage from wildfires on homes through dedicated funding for fire protection and emergency response.
The only negative being bantered around is that the property tax would be reassessed on inherited properties that are not being occupied by the heirs. This is an economic compromise allowing for the other positive tax modifications. It does make sense though, as many celebrities and investors have large real estate portfolios being transferred to heirs, maintaining the lower original owner’s tax basis. There are still options for the heirs. Occupy the property and maintain the original tax basis; keep the property as a rental or vacation home and pay the new tax basis; or sell the property as part of the liquidated estate, and let the new owners pay the adjusted tax basis.
Another upside is the new tax generates revenues for fire protection, local government, and school districts.
There is a large coalition of bi-partican officials and organizations supporting Prop 19.
If you are in the Los Angeles area, have any questions or real estate sales or financing needs, feel free in contacting me
Ron Henderson GRI, RECS, CIAS
President/Broker
Multi Real Estate Services, Inc.
Gov’t Affairs Chair – California Association of Mortgage Professionals (2017-2018)
Chairman – OutWest Marketing Meeting (Real Estate Education)
BRE #00905793 NMLS #310358
www.mres.com
ronh@mres.com
Specialist in the Art of Real Estate Sales and Finance
Real Estate market, mortgage rates, Los Angeles, San Fernando Valley, Conejo Valley, Simi Valley, Woodland Hills, West Hills, Calabasas, Chatsworth
Ron, first of all, you put out a great newsletter!! It shows you put a lot of work into it. Very good information. And thanks for the comment on Prop 19. I did not research that prop yet so you gave me some good reasons to vote FOR it!
Thanks,
Michael
Thanks Michael. I miss our Gov’t Affairs excursions to DC and Sacramento. Take care Ron