Prop 19—Your Ticket to Significant Tax Savings

Discover the Powerful Benefits of California Proposition 19 for Homeowners: How It Can Save You Money and Simplify Your Next Move

If you’re a California homeowner considering a move but feeling anxious about property taxes, Proposition 19 might be just the solution you’ve been looking for. Passed in 2020, Prop 19 helps eligible homeowners—particularly those 55 and older, individuals with certain disabilities, and victims of natural disasters—transfer their current property tax base to a new home. This means you can often avoid a sharp increase in your annual taxes, freeing up valuable resources for home upgrades, retirement funds, or other important life goals.

In the sections below, the Ballesteros Real Estate Group with Coldwell Banker dives into how Prop 19 can make relocating more affordable and less stressful, complete with an example showing how these savings can add up.

Why Prop 19 Can Be a Game-Changer for Homeowners

1. Lower Property Tax Bills: Keeping your old property tax base can drastically cut down on the amount you owe each year—especially vital if you’re on a fixed income or looking to control expenses.  
2. Freedom to Right-Size: Whether you’re ready to downsize or need more space for a growing family, Prop 19 helps ensure taxes don’t balloon when you purchase a new home.  
3. Closer to Loved Ones: If you’ve long wanted to move nearer to children, grandchildren, or supportive communities, you can do so without fear of prohibitive tax hikes.  
4. Extra Funds for What Matters: By saving on property taxes, you can put the difference toward home improvements, travel, medical expenses, or simply enjoying your golden years.

A Real-World Example: Moving From a $400,000 Home to a $2,000,000 Home

Below is a simplified scenario illustrating how Proposition 19 could lower your yearly tax bill if you’re purchasing a more expensive property. Please note that actual figures vary by county and individual circumstances.

1. Original Home (Sold Property)
   - Current Assessed Value:$400,000  
   - Annual Property Tax: $4,000 (approx.)  
   - Market Value at Time of Sale: $1,000,000  

2. Replacement Home (New Purchase)  
   - Purchase Price/Market Value: $2,000,000  

3. How the Tax Base Transfers   
   Since the replacement property’s value exceeds the original home’s market value, the difference in market values is added to the original property’s assessed value:

   Plugging in the numbers:

$400,000 + $2,000,000 - $1,000,000 = $1,400,000
  

   Assuming an approximate 1% property tax rate:

   $1,400,000 times 1% = $14,000 per year
  

   Without Prop 19, purchasing a $2,000,000 home would typically mean around $20,000 per year in taxes. Here, you’re saving roughly $6,000 annually—money that can be put toward renovating your dream kitchen, traveling, or simply boosting your peace of mind.

4. Tips to Make Your Prop 19 Transfer Smooth and Successful

1. Check Your Eligibility: Prop 19 applies to homeowners 55+, individuals with severe disabilities, and victims of natural disasters. If you’re unsure, confirm with your county assessor’s office or a real estate professional.  
2. Mind the Timing: Generally, you must complete your replacement home purchase (or new construction) within two years of selling your original property.  
3. Get Professional Assistance: Different counties have slightly different procedures. A knowledgeable real estate agent and tax advisor can walk you through local nuances.  
4. Keep All Relevant Paperwork: Having your appraisals, closing documents, and other supporting materials organized will make the property tax base transfer process faster and easier.

Partner with the Ballesteros Real Estate Group with Coldwell Banker

At the Ballesteros Real Estate Group, we’re committed to making your real estate transactions as profitable and stress-free as possible. When it comes to Prop 19, we’ll help you:

- Understand the Details: Get clear on how the law applies to your unique situation.  
- Navigate the Market: Find a home that matches your budget, location preferences, and future plans.  
- Coordinate the Process: From preparing and listing your current home to finalizing the purchase of your new one, we’ll handle the details so you don’t have to.

Don’t let property tax worries hold you back from your next big move. If you’re thinking about buying or selling a home in California and want to maximize your savings, contact the Ballesteros Real Estate Group with Coldwell Banker today. We’ll show you how to harness Proposition 19 to ensure your transition is smooth, cost-effective, and perfectly tailored to your lifestyle.

Disclaimer: This blog post provides general information for educational purposes and does not constitute legal or tax advice. Always consult with qualified tax professionals or your local county assessor to determine the specific rules and regulations in your area.