How to Transfer Your Property Tax Base With Prop 19

Prop 19 lets you sell your home and carry its property tax base, the assessed value your tax bill is figured on, to a new home anywhere in California. You need to be 55 or older, severely and permanently disabled, or a wildfire or disaster victim, and buy the new home within two years of the sale.

If a bigger tax bill is part of what's kept you in a house that doesn't fit anymore, this is the rule to know. The part people get stuck on is the claim, because it isn't part of escrow. You file it with the County Assessor after you've moved in.

Prop 13 lets a home's assessed value rise up to 2% a year, according to the County of San Diego's property tax FAQ, while prices can rise a lot faster. North San Diego County Realtors put San Diego County's median house price at $1,060,000 in September, up 6% from a year earlier. If you bought years ago, Prop 19 lets you bring your lower assessed value with you.

Who Can Use Prop 19 to Transfer a Property Tax Base?

On the day your current home sells, you need to be 55 or older, severely and permanently disabled, or the owner of a home that a wildfire or natural disaster damaged to more than half its value. You only need to fit one of those, according to the Board of Equalization's Prop 19 page.

Both homes have to be your main home, the kind that qualifies for the homeowners' exemption or the disabled veterans' exemption. There's no minimum time you have to live in the one you're selling. It just has to be your main home when it sells. If you're applying because of a disability, the county needs a doctor's certification that it's severe and permanent.

Since April 1, 2021, when this part of Prop 19 took effect, the new home can be in any California county, you can do this up to three times, and the new home can cost more than the old one, with the difference added to your tax base. The older rules allowed it once, only within the same county or the few counties that accepted transfers, and only into a home of equal or lesser value.

How a Prop 19 Transfer Works, Step by Step

1. 1

   Before you list

   Check That You Qualify on the Sale Date

   The age, disability, or disaster rule has to be true on the day your current home sells, and both homes have to be your main home.

2. 2

   Within two years

   Sell and Buy in the Order That Works for You

   Close on the new home within two years of the sale, before or after it. Buying first means paying tax on the new home's full value until the old one sells, with no refund for that stretch.

3. 3

   While you shop

   Keep the Price Inside the Limit, or Plan for the Difference

   The new home's price limit depends on when you buy. Go over it and you still get the transfer, with the amount over added to your tax base.

4. 4

   After you move in

   File the Claim With the County Assessor

   Once both closings are done and you're living in the new home, file with the Assessor in the county where it sits, within three years of buying. The forms are in the checklist below.

How Much Can the New Home Cost Under Prop 19?

The limit depends on when you buy, as a share of your current home's market value on the day it sold. The Board of Equalization calls this the equal or lesser value test.

Buy above the limit and the transfer still happens. The amount over the limit gets added to the tax base you bring with you.

What Prop 19 Can Save You on Property Taxes

The basic property tax rate is 1% of assessed value, plus any voter-approved bonds, according to the County of San Diego's property tax FAQ. Say you're 62, selling a home you've owned for a long time, and you buy your next home in the first year after the sale.

If that new home cost $1.1 million instead, it would land $50,000 over the first-year limit, and your tax base would come out around $450,000.

The move itself still costs money. Selling usually costs around 6% of the price, and the new home has closing costs of its own, so what you'd walk away with matters as much as the tax savings. If you want that number before you start looking at homes, I'll run it with you.

Where People Get Stuck With Prop 19

Most of the trouble is timing. The two-year window is written into the state constitution, so the Board of Equalization's guidance to county Assessors leaves no room for an extension, whatever the reason.

The age rule catches people too. You have to be 55 on the day your current home sells. Turning 55 after the sale doesn't count, even if it's before you buy.

The claim has its own deadline. File within three years of buying and the lower value covers every year. File later and it only starts with the tax year you file in. If a tax bill shows up before your claim is approved, the county refunds what you paid above the transferred value once it goes through. My post on the tax bill that arrives months after you close covers why those bills show up.

When the dates get tight on the selling side, I ask the buyer for a short rent-back, so you're not out of the house before the next one closes. There's more on how I work with sellers on my page about selling your home.

Prop 19 only covers property tax. How the sale itself is taxed is a question for a tax professional, and whether your move qualifies is the Assessor's call, so bring specific questions to the Assessor's office.

If you're still weighing a move, there are more posts for homeowners getting ready to sell.

What Homeowners Ask Me About Prop 19