California’s Prop 13 & Prop 19
California’s Prop 13 sparked controversy from the moment it was adopted by voters in 1978. Forty-four years on, not much has changed.
Prop 13 still helps homeowners to maintain their low property tax base even as home values skyrocket around them. And it still has its detractors who argue that the system increases inequality.
(Back in 2003, Warren Buffet
shared that he paid $14,410 in property tax on his $500,000 home in Omaha, and $2,264 in property tax on his home in California worth $4M—rates of 2.9% and 0.056% respectively.)
Either way, it’s safe to say that Prop 13 has been a huge boon to California homeowners through the years.
Save on Property Tax When You Move
Since April 1, 2021, another ballot initiative, Prop 19, has helped some Bay Area residents to keep their low assessment when they move—often to the tune of multiple thousands in tax savings per year.
Under Prop 19, you can keep your original Prop 13 tax base when moving to a home of equal or lesser value anywhere in California. You can also secure an adjusted tax rate based on your Prop 13 tax base when moving to a more expensive home in California.
(Previously under Props 60 and 90, this only applied when moving to a home of equal or lesser value, and only within certain counties. Prop 19 opens it up to the whole state and buying a more expensive property.)
Who is Eligible Under Prop 19?
Cutting to the chase, you can take advantage of Prop 19 if you are:
- Age 55 or over
- Severely disabled
- Or the victim of a wildfire or other natural disaster
If you are in one of these categories, or if you plan to be (by gracefully aging, as one does), then head to our sister blog for a
deeper dive on Prop 19. And definitely check with a CA real estate attorney or tax advisor before you make any serious moves!
As always, please don’t hesitate to reach out with any real estate questions.
Contact us here!
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