From the Desk of Danielle Davenport
“A client almost passed on their best move because of a rule that no longer exists.”
Not long ago, I was speaking with a longtime homeowner who was considering a move but was hesitant to take the next step.
Like many Californians, they believed transferring their low property tax base only worked if they stayed within their current county—or moved to one of a handful of counties that honored reciprocal tax transfers.
That was true for many years. But it isn’t true anymore.
Proposition 19 fundamentally changed the rules, and I continue to meet homeowners who are making major financial decisions based on outdated information. If you’ve delayed downsizing, relocating, or moving closer to family because you were worried about losing your favorable property taxes, it may be time to take another look.
Understanding How We Got Here: Proposition 13 and Proposition 19
California’s property tax system is built on Proposition 13, passed by voters in 1978.
Proposition 13 limited property taxes to approximately 1% of a property’s assessed value and restricted annual increases in assessed value to no more than 2% per year unless the property changed ownership or significant new construction occurred.
This is why many longtime homeowners today pay dramatically less in annual property taxes than someone who purchased the neighboring home at current market value.
Later, Proposition 58 (1986) and Proposition 193 (1996) expanded these protections by allowing parents—and in certain circumstances grandparents—to transfer their primary residence to children or grandchildren without triggering a reassessment.
For decades, these rules created significant tax savings for California families. Then came Proposition 19.
What Proposition 19 Changed
Approved by California voters in 2020, Proposition 19 reshaped two important parts of California property tax law.
First: It Limited Parent-to-Child Property Tax Transfers
Beginning February 16, 2021, inherited properties no longer automatically keep the parent’s low assessed value.
To qualify:
- The child must make the inherited property their primary residence.
- The property must meet the requirements for the homeowner’s exemption.
- If the market value exceeds the parent’s assessed value by more than the annually adjusted exclusion amount (currently $1,044,586 for qualifying transfers between February 2025 and February 2027), the excess value is added to the taxable assessment.
For many families, this represented a significant change in estate planning.
The Major Benefit: Your Property Tax Base Can Now Move With You
While Proposition 19 narrowed inheritance benefits, it greatly expanded portability for homeowners who qualify. Prior to April 2021, homeowners generally could transfer their tax base only:
- Within their existing county, or
- To one of approximately ten counties that voluntarily accepted transfers through reciprocal agreements.
That geographic limitation influenced countless retirement and relocation decisions. Today, that restriction is gone. Eligible homeowners can now transfer their existing property tax base to a replacement residence anywhere in California—all 58 counties.
Who Qualifies?
You may qualify if you are:
- Age 55 or older
- Severely and permanently disabled
- A victim of a qualifying wildfire or Governor-declared natural disaster
Additional Benefits Under Proposition 19
The new law also provides greater flexibility than many homeowners realize. Eligible homeowners may:
- Transfer their tax base up to three times during their lifetime (instead of only once under prior law).
- Purchase a replacement home that costs more than the one they sold. Rather than losing the benefit entirely, only the difference in value is added to the transferred tax base.
- Purchase the replacement residence within two years before or after selling the original home.
For many Californians, this makes relocating substantially more affordable than it would have been under the previous rules.
Why This Matters
I’ve spoken with homeowners who postponed downsizing, moving closer to family, relocating for retirement, or purchasing a more suitable home simply because they believed they would lose decades of property tax savings.
In many cases, that assumption is no longer correct. Every homeowner’s circumstances are different, and Proposition 19 contains detailed qualification requirements, but understanding the current rules can open opportunities that simply didn’t exist a few years ago.
Sometimes the biggest obstacle isn’t the market—it’s outdated information.
Final Thoughts
Real estate decisions shouldn’t be based on rules that no longer apply.
If you’ve owned your home for many years and are wondering whether Proposition 19 could allow you to relocate while preserving much of your existing property tax base, it’s worth taking the time to evaluate your options before ruling out a move.
A simple review today could significantly change your long-term financial picture.
Need Help Evaluating Your Situation?
Every property—and every homeowner—is different.
Whether you’re considering downsizing, relocating within California, purchasing a replacement property, or simply want to understand how Proposition 19 may affect your plans, I’d be happy to help you evaluate your options and walk through the numbers.
Contact Danielle Davenport to discuss your goals and determine whether California’s current property tax rules may create opportunities for your next move.