Always consult your tax professional before making a financial decision!

Tax Information:

PROP. 19 PRIMARY/PRINCIPAL RESIDENCE REQUIREMENTS

For Transfers Between Parents and Children – Effective February 16, 2021
The person (child or grandchild) receiving the property must live in the home as their primary residence within one year of transfer and file for the Homeowners’ Exemption (BOE-266/ASSR-515) or Disabled Veterans’ Exemption (BOE-261/EXM-32) within one year of transfer to qualify for the exclusion.

For Seniors and Severely Disabled Persons – Effective April 1, 2021
Both the original and replacement properties must be eligible for the Homeowners’ Exemption (BOE-266/ASSR-515) or Disabled Veterans’ Exemption (BOE-261/EXM-32). The claimant must own and reside in the original property at the time of its sale or within two years of the purchase or new construction of the replacement.

Proposition 19 Overview

In November 2020, California voters passed Proposition 19, also known as the Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act. This constitutional amendment introduced significant changes to property tax benefits effective February and April 2021.

Key Components of Proposition 19

  1. Inheriting Property:
    • Proposition 19 modifies the rules for inheriting property tax benefits. Children can retain the lower property tax base of their parents only if the property is their principal residence and they occupy it within one year.
    • Previously, under Propositions 58 and 193, parents could transfer their property assessments without reassessment regardless of its use by the children, even for rental purposes. Now, only the principal residence qualifies for this transfer.
  2. Transfer of Property Tax Base:
    • Homeowners over 55, disabled individuals, or victims of natural disasters can transfer their lower assessed property value to a new primary residence. This can occur up to three times during their lifetime.
    • Unlike previous laws, the replacement residence can be of any value and located anywhere in California.
  3. Disaster Relief Tax Base Transfers:
    • Proposition 19 allows homeowners whose properties are substantially damaged or destroyed by disasters to transfer their property tax base to a comparable replacement home, even if it is of greater value. This provision applies to properties affected by wildfires or other natural disasters.

Effective Dates

  • Parent-Child and Grandparent-Grandchild Transfers: Effective February 16, 2021
  • Senior Citizen and Disaster Relief Tax Base Transfers: Effective April 1, 2021

For detailed comparison charts and more information on how Proposition 19 may affect you, please visit the following links:

  • Proposition 13: Enacted in 1978, this law limits property tax increases for homeowners in California to a maximum of 2% per year as long as the property is not sold. It establishes the property tax base at 1% of the purchase price.
  • Proposition 60: Allows homeowners aged 55 and older to transfer their property tax base from their previous home to a new home within the same county, providing financial relief when moving.
  • Proposition 90: Extends the benefits of Proposition 60 to transfers between different counties in California that accept Proposition 90, helping seniors relocate without facing significantly higher property taxes.

For detailed tax information on these propositions, you can visit the following official resources:

Conclusion

Finding the right senior living option is crucial for ensuring a comfortable and fulfilling lifestyle. With various facilities available in Simi Valley and potential tax benefits through propositions 13, 19, 60, and 90, seniors can make informed decisions about their living arrangements. Feel free to reach out for personalized assistance in exploring these options.

We are not professional tax consultants. Talk to your tax professional to ensure your decision is right for you.