Reappraisal Exclusion for Seniors or Severely Disabled Persons

Overview

Reappraisal Exclusion for Seniors or Severely Disabled Persons
Proposition 19 - Effective April 1, 2021

Proposition 19 changed the law for seniors over 55 years and severely disabled persons to transfer the “taxable value” of their primary residence (original) to a replacement primary residence anywhere in the state with either no or partial property taxable value change.  “Taxable value” means the base year value plus inflationary adjustments; commonly referred to as a factored base year value.

Who qualifies?

The claimant must be age 55 or older, and own and occupy the original residential property as the owner’s principal residence as of the date of transfer to a new owner. If the claimant is married and resides there with his spouse, then both spouses qualify if either one of them is at least age 55 as of the date of transfer.

What Property Qualifies?

  • The original property must have been eligible for either the homeowner’s exemption (claimant owned and occupied it as principal residence at the time of sale or within two years of the acquisition of the replacement property) or entitled to the disabled veteran’s exemption (veteran with service-related disability and California resident on January 1 of claim year).
  • The original property must be subject to reappraisal at its current “fair market value” as a result of its transfer, in accordance with Revenue & Taxation Code sections 110.1 or 5803.
  • The Replacement residence must be purchased or newly constructed within two years of the sale of the original primary residence
  • The Replacement residence must be eligible for either the homeowner’s exemption or entitled to the disabled veteran’s exemption (veteran with service-related disability and California resident on January 1 of claim year).
  • Either the sale of the original primary residence or the replacement residence must be purchased or newly constructed after April 1, 2021.

How is the taxable value transferred to the replacement primary residence?

  • For a Replacement residence that has a fair market less than the Original Primary Residence’s fair market value, the taxable value of the Original Primary Residence is transferred
  • For Replacement residences that have a fair market value greater than the Original Primary Residence, the taxable value of the replacement primary residence shall be calculated by adding the difference between the fair market value of the original primary residence and the fair market value of the replacement primary residence to the taxable value of the original primary residence.

When must a claim be made?

  • A claim must be filed within three years of the replacement dwelling purchase or completion of new construction of the replacement dwelling.

What if I jointly own the property with someone who is not my spouse?

  • The same rule applies. If there are two or more co-owners of a dwelling, all owners qualify if only one owner of record is over 55 and if that owner/claimant occupies the property as of the date of the transfer.

How often can I claim the Proposition 19 benefit for owners over the age of 55?

  • The benefits of the Proposition 19 benefit for the owners over the age of 55 can be used up to three times in a claimant’s lifetime.

As a co-tenant of the original property with another owner, may I receive a partial benefit if we apply for the exclusion and buy separate replacement home?

  • No. Only one co-owner of a qualified original property may receive the benefit in this situation. The co-owners must choose between themselves which one will make the claim. The only exception is a multiple-residence original property (such as a duplex), where multiple owners qualify for separate homeowner’s exemptions. In that case, each owner may transfer a portion of the original property’s value to his separate replacement dwelling.

Does Proposition 19 apply if I make a gift of my original property to my children and I buy a replacement?

  • No. A gift of the original home to the owner’s child, while the owner is alive or through a will upon the owner’s death, does not qualify. The original property must be sold in exchange for something of monetary value (“consideration”) and be subject to reappraisal at full market value at the time of transfer.

As sole owner of the original property, may I qualify when I jointly buy a share of a replacement?

  • Yes, you may, as long as you are otherwise qualified, regardless of how many co-owners buy the replacement.

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BOE-19-B Claim for Transfer of Base Year Value to Replacement Primary Residence for Persons at least Age 55 years
Applies to base year value transfers occurring on or after April 1, 2021
BOE-19-B Claim for Transfer of Base Year Value to Replacement Primary Residence for Persons at least Age 55 years
Applies to base year value transfers occurring on or after April 1, 2021
BOE-19-D Claim for Transfer of Base Year Value to Replacement Primary Residence for Severely Disabled Persons
Applies to base year value transfers occurring on or after April 1, 2021
BOE-19-D Claim for Transfer of Base Year Value to Replacement Primary Residence for Severely Disabled Persons
Applies to base year value transfers occurring on or after April 1, 2021
Not Available BOE-19-DC Certificate of Disability

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