California Proposition 19, also known as the Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act, was a ballot measure passed in November 2020. The proposition made significant changes to property tax rules in California, with the goal of providing more flexibility to homeowners in the state.
The key provisions of Proposition 19 include allowing eligible homeowners who are 55 years or older, severely disabled, or victims of natural disasters to transfer their property tax base to a new home anywhere in California. This means that they can keep their lower property tax rate, even if they move to a more expensive property. Previously, homeowners were only able to transfer their property tax base within the same county or to a property of equal or lesser value.
Proposition 19 also limits the ability of children or grandchildren to inherit a property and keep its low property tax rate, unless they use the property as their primary residence. This provision is intended to close a loophole that allowed some heirs to inherit properties and use them as rental properties while paying the lower property tax rate.
The passage of Proposition 19 has been praised by supporters as a much-needed reform that will provide relief to seniors and other eligible homeowners who want to downsize or move to a different part of the state but are hesitant to do so because of the potential increase in property taxes. They argue that the measure will also generate much-needed revenue for local governments by encouraging more turnover in the housing market.
However, critics of Proposition 19 have raised concerns about the impact it could have on local governments' revenues. They argue that the measure will lead to a significant loss of revenue for local governments, as more homeowners will be able to keep their lower property tax rates even when they move to more expensive properties. This, in turn, could make it more difficult for local governments to fund critical services such as education, healthcare, and infrastructure.
Proposition 19 has made significant changes to property tax rules in California, allowing eligible homeowners to transfer their property tax base to a new home anywhere in the state and limiting the ability of heirs to inherit properties and keep their lower property tax rates. While supporters have praised the measure as a much-needed reform, critics have raised concerns about its impact on local governments' revenues. It remains to be seen how the measure will play out in practice and whether any changes will be made in the future to address any unintended consequences.
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