Introduction:

California's Proposition 19, implemented on February 16, 2021, has brought forth significant changes in property tax regulations, particularly for parent-to-child transfers and property reassessments. In this blog post, we will delve into the details of Prop 19 and explore its implications for homeowners in California. From the primary residence requirement to the need for proper documentation, we aim to help you navigate through these new regulations effectively.

I. The Primary Residence Requirement and Verifying Eligibility

Under the new Prop 19 system, it is crucial for both the parent and one of the children to either be living in the primary home or planning to move in within a year after the parent's passing. The county diligently monitors attempts to deceive the system and will verify whether the claimed primary residence is accurate.

II. Financial Incentives to Sell Other Properties

One significant effect of Prop 19 is the financial burden it places on homeowners to maintain multiple properties. The new regulations create an incentive to sell these properties, as it becomes increasingly challenging to keep them due to higher property taxes. Property owners are now encouraged to consider the financial implications of holding onto properties that are not their primary residences.

III. Understanding the Taxation Process: Supplemental Tax Bills and Assessments

The implementation of Prop 19 leads to changes in property tax calculations. While properties will still be reassessed based on their market value, delays caused by COVID-19 and certain laws mean that homeowners will only discover their new property tax after selling the property. This can result in unexpected tax bills that may catch homeowners by surprise.

Additionally, there is an additional 1.25% assessment on the assessed value of the property, along with any other assessments for school district bonds or road repairs that apply in the property area. These factors can contribute to an increase in property taxes and should be taken into consideration when planning for future homeownership.

IV. Prop 19 vs. Previous Regulations: The Flexibility of Property Transfers

Prop 19 replaces the previous regulations of Props 60 and 90, which allowed older Californians over the age of 55 to transfer their property tax base when purchasing a new home. These previous regulations were effective in all California counties and provided a means for downsizing without the fear of increased property taxes.

With Prop 19, individuals over the age of 55 can now carry over their existing property tax formula to a new property, eliminating the limitation to specific counties. This flexibility allows homeowners to make informed decisions about their properties while taking advantage of the prop 13 tax bases for parent-to-child transfers.

V. Navigating Prop 19: Seeking Professional Guidance

Given the complexities of Prop 19 and the potential implications on property taxes, seeking expert guidance is essential in ensuring a smooth transition. Building the right team, including a financial advisor, estate planner, real estate professional, and CPA, can provide invaluable support in understanding individual circumstances and exploring available options.

At Gia Silva - YouTube, we aim to provide assistance and information that help individuals navigate through the intricacies of Prop 19. By understanding the requirements, filling out the necessary forms, and engaging with assessors, we strive to help our clients achieve the best possible outcomes.

Conclusion:

California's Prop 19 introduces significant changes to property tax regulations, particularly pertaining to parent-to-child transfers and property reassessments. These new rules have implications for homeowners when it comes to primary residence requirements, property taxes, and the flexibility of property transfers.

By staying informed, understanding the necessary documentation, and seeking assistance from professionals, homeowners can effectively navigate through these changes while making informed decisions about their properties. Prop 19 may have its complexities, but with the right guidance, homeowners can proactively manage their property taxes and secure their financial future.

Remember to subscribe to Gia Silva - YouTube for more insights, attend workshops to gain a deeper understanding of Prop 19, and share your thoughts in the comments section.

Disclaimer: The information provided in this blog post is based on the content of the Gia Silva - YouTube video titled "Workshop Webinar - Prop 19" featuring guest speaker Jen Sawday. While we strive to provide accurate and up-to-date information, it is essential to consult with legal and financial professionals to address specific circumstances and seek personalized advice.