Expanded rules for eligible homeowners, starting April 1, 2021
- Allows for moves anywhere in the state – if eligible, homeowners may keep their lower property taxes when moving to another home.
- If the replacement property is of equal or lesser value, the taxable value of the original property may be transferred and become the taxable value of the new one.
- Allows for purchasing a more expensive home, retaining the former property tax plus some increase based on the difference between the sold property and the newly purchased one, as long as the subsequent sale or purchase takes place within two years.
- Increases how often a homeowner can use the new rules – if over 55 or severely disabled, they can do so up to three times.
- (Before this proposition was passed, the former rules limited the exemption to only a one-time transfer and it had to be either within the same county or between certain other counties and only if the replacement property was of “equal or lesser value”).
Narrows the rules for inherited properties, starting February 16, 2021
- The rule applies only for those which will be used as a primary home by a child or a grandchild, but not if they are used as rental properties or other uses. Properties that are not going to be used as a home or for farming will not apply.
- The property tax bill will increase for higher-value homes and farms if the property could be sold for more than $1 million dollars above its taxable value (adjusted for inflation every two years). In this instance, the tax bill will be higher, although not as much as it would have been had the property sold to someone else.
Claims must be made with the local county assessor’s office to transfer a property tax basis.
NOTE: Because the legislature will most likely need to add additional amendments to address some “gray areas” and issues that have arisen in the interpretation of some of the rules, anyone is highly advised to seek the advice of a qualified California real estate attorney or tax advisor before taking any actions that might impact their own or family’s situations.
(The above was compiled by Michael Edlen from sources deemed reliable about the initiative passed by voters in November 2020.)