As of February 16, 2021 the new Prop 19 will be in affect allowing you to keep your existing property tax base. This Proposition has some positive and negatives depending on who is asking the question. In my opinion, it is mostly good so let’s get started!
You most likely are aware of Prop 13 which was established back in 1978. This proposition controlled, in the state of California, how much your property tax could go up each year. California housing prices had been going up so much that it was imperative there needed to be some regulations to help homeowners; so the state capped it so your property taxes could not go up more than 2% each year. Proposition 13 will continue to be in place but I bring it up to show you how the state has helped control your tax base.
Proposition 60 and 90 have been in place to help people 55 years and older take their current assessed property tax base ( 1 x in a lifetime) and move within their same county ( Prop 60) or move to another of the 10 approved counties in the state of California ( Prop 90) into a primary residence of equal or lesser value. The 10 approved counties were quite limiting so unless you really wanted to move to let’s say Southern California or up in Northern California you might feel stuck. So, although many people utilized these tax laws, the areas became more and more limiting. That is where Prop 19 really comes in handy. Prop 19 now allows someone 55 years or older to take their current assessed property tax base and move ANYWHERE in the state of California!
Proposition 19 will now allow qualifying homeowners for instance in the Bay Area to move to Sacramento or the Sierra Foothill communities like Auburn, Roseville, El Dorado Hills and find a home that is more affordable and out of their current congestion. I expect a flood of people from metropolitan cities such as San Jose, San Francisco, Los Angeles and other Silicon Valley towns to search for a more relaxed suburban area to not only take advantage of Prop 19 but to be able to work from home. Towns in the Sacramento and Sierra Foothills are still within 3 hours of Silicon Valley for instance where people can easily commute when needed.
But there are some set backs with Prop 19 which are associated more around the children who will be inheriting a property and the taxes associated with acquiring a home from their parents. That is another blog article to come. I didn’t want to confuse the two topics of this proposition and so for now just enjoy this tremendous opportunity discussed above and I will bring up the second portion of Prop 19 in another blog article.
If you have any questions please don’t hesitate to ask me. Plus, here is a link to a great video that can explain Prop 19 further https://www.youtube.com/watch?v=g8MG6jOr38w
What are some of your concerns about moving and using this Proposition 19? Do you feel it is useful to have Prop 19? Do you think there is an exodus out of the Bay Area?