The Benefits of Prop 19:
There Has Never Been a Better Time to Sell Your Property
Spring is right around the corner and there has never been a better time to sell your California property. The combination of a red hot real estate market and a new law called Prop 19 has put homeowners squarely in the driver’s seat if they have a mind to sell. Prop 19 could, quite literally, open new doors for you. Come April 1st, Prop 19 goes into effect and this could free up many homeowners to sell and move elsewhere in the state of California without severe tax penalties.
If you are 55 years or older, a survivor of a natural disaster or severely disabled, you can now move anywhere in the state of California, up to three times, and transfer your current tax basis to a property of greater value without penalty. Eligible homeowners may now transfer their tax basis anywhere within the State of California, up to three times, to a property of greater value without being penalized at today’s tax basis. Previously homeowners were limited to transfers within certain counties and to homes of the same or lesser market value. Prop. 19 increases the number of times that certain people may transfer their tax assessments. If a person is 55 years or older, has severe disabilities, or lost a home in a natural disaster, the person may transfer their tax assessment up to three times now (up from one).
For those property owners age 55 and older, they will be able to blend the taxable value of their old home with the value of a new, more expensive home, which will result in positive property tax savings. For example, if a senior couple sold their home with an assessed value of $250,000 for $2 million and bought a new home for $3 million, the new home’s assessed value would be $1.25 million, which is the $250,000 assessed value, plus the $1 million increase in home value.
For those that have lived in their home for many years and realized huge amounts of equity and want to remain in California but have been reluctant to sell due to reassessment of today’s tax values, this new law will drastically reduce the tax penalties once associated with moving within the state.
If you are one of those California residents wanting to take advantage of Prop 19, first consult with your CPA. Then, call me for a free Comparative Market Analysis for your property to see what it’s worth in today’s red-hot real estate market: Mark Stevens, 707 322 2000 or email firstname.lastname@example.org