Changes to the transfer of taxable value for certain property owners went into effect on April 1, with the continued roll out of California’s Prop. 19.
Venable explains that the new law expands the class of homeowners who are able to transfer their taxable value to include victims of wildfire or other natural disasters, regardless of age or disability status. Prior to last week’s change, only homeowners over the age of 55 or those with certain disabilities could transfer taxable value.
The changes also allow homeowners to buy a replacement home that is worth more than their old home—provided that the increase in value is added to the transferred taxable value of the old home. And said home no longer has to be in the same county as the original home. It just has to remain in state.
The team at Venable puts the new rules to work as so:
Assume a homeowner is over 55. Her house has a taxable value of $5,000,000. She sells it for $15,000,000. If she buys a new home anywhere in California for $15,000,000 or less, she can transfer her $5,000,000 taxable value to the new home. This will be its taxable value. However, if she wants to upgrade to a $20,000,000 home, her new home’s taxable value will be $10,000,000—the taxable value of her old home transferred ($5,000,000) plus the upgrade value ($20,000,000- $15,000,000.)
It’s worth noting that transfers of taxable value are not automatic. Interested homeowners must apply for the benefit with an assessor.
For more on Prop. 19 changes, check out Venable’s full report here.