How to Transfer Your Property Tax Basis in California If You're Over 55
If you're a California homeowner aged 55 or older and thinking about downsizing, relocating, or simply moving to a new home, there's good news: you may be eligible to transfer your current property tax basis to your new residence, potentially saving thousands of dollars annually. Thanks to Proposition 19, which took effect on April 1, 2021, the rules around property tax transfers have become more flexible and beneficial for seniors.
What Is Property Tax Basis and Why Does It Matter?
California’s property tax system is governed by Proposition 13, which limits annual increases in assessed value to 2%, unless the property is sold or significantly improved. This means long-term homeowners often pay much lower property taxes than newer buyers. When you sell your home and buy another, your property is typically reassessed at market value—unless you qualify to transfer your base year value.
Who Qualifies Under Proposition 19?
To transfer your property tax basis under Prop 19, you must meet the following criteria:
- Be 55 years of age or older at the time of selling your original home.
- The original and replacement properties must be your primary residences.
- The replacement home must be purchased or newly constructed within two years of selling the original home.
- You must file a claim with the county assessor within three years of the purchase or construction of the replacement home.
- You can use this benefit up to three times in your lifetime.
How the Transfer Works
- If your replacement home is of equal or lesser value, your existing base year value transfers directly.
- If your replacement home is more expensive, the difference in value is added to your original base year value to create a blended assessment.
Example:
- Original home sold for $500,000 with a base year value of $200,000.
- Replacement home purchased for $700,000.
- New base year value = $200,000 + ($700,000 - $500,000) = $400,000
This can result in significant annual savings compared to being taxed on the full market value of the new home.
How to Apply
You’ll need to submit Form BOE-19-B to the county assessor where your new home is located.
The form requires:
- Proof of age (e.g., driver’s license).
- Sale and purchase dates.
- Addresses and sale prices of both properties.
- Declaration that both homes are/will be your primary residence.
Some counties may charge a processing fee (e.g., Santa Clara County charges $110).
Special Considerations
- You can transfer your base year value anywhere in California—all counties now participate.
- If you’re severely disabled or a victim of a natural disaster, you may also qualify under Prop 19.
- The transfer applies only to individuals, not entities like LLCs or trusts .
Why This Matters
With California’s high property values, transferring your tax basis can mean thousands of dollars in annual savings. For retirees or those on fixed incomes, this can make a big difference in affordability and quality of life.
Thinking of making a move? Be sure to consult your local county assessor’s office or a qualified tax advisor to ensure you meet all requirements and file correctly.
