Facebook
X
Pinterest
Copy Link
If you’ve owned your home for 20, 30, or even 40 years, you’ve probably noticed something interesting: your property taxes are likely much lower than those of your neighbors who bought more recently.
That’s because of Proposition 13.
For many longtime California homeowners, those lower taxes have become one of the biggest reasons they’re hesitant to move. But thanks to Proposition 19, the rules have changed—and depending on your situation, moving may be more affordable than you think.
Let’s break it down in plain English.
A quick note: This is meant as general information, not tax or legal advice. Every situation is different, so it’s always a good idea to talk with a qualified tax professional or estate planning attorney before making any decisions.
What does Prop 13 actually do?
Passed in 1978, Proposition 13 limits how much your home’s assessed value can increase each year.
In simple terms, as long as you continue to own your home, your property taxes generally rise much more slowly than your home’s market value.
That’s why it’s common to see two nearly identical homes on the same street with very different tax bills. One owner may have purchased the home in the 1980s, while the other bought it just last year.
When a home changes ownership, however, it is usually reassessed at its current market value. That means the new owner will typically pay property taxes based on the purchase price—not what the previous owner was paying.
So where does Prop 19 come in?
Proposition 19, which took effect in 2021, changed several important rules that affect homeowners throughout California.
The two biggest changes involve homeowners who are moving and families planning to pass property down to the next generation.
1. Keeping your property tax base when you move
If you’re 55 or older, have a qualifying disability, or are relocating after a natural disaster, Prop 19 may allow you to transfer your existing property tax assessment to a replacement home anywhere in California.
Even better, eligible homeowners can generally do this up to three times during their lifetime.
If the new home costs more than the one you sold, your taxable value is adjusted to reflect the price difference—but you may still keep a significant portion of your existing tax benefit.
For many longtime homeowners, this has made downsizing or relocating much more financially realistic than it was under the old rules.
2. Passing a home to your children
This is where many families have been caught by surprise.
Before Prop 19, parents could often transfer a home to their children without triggering a reassessment, even if the children never planned to live there.
Today, the rules are much more restrictive.
In most cases, the child must make the inherited home their primary residence to preserve the property’s lower tax basis. There are also limits on how much value can be excluded from reassessment.
If your children plan to keep the home as a rental property or vacation home, they could face a substantial increase in property taxes after inheriting it.
Why this matters if you’re thinking about selling
Many longtime homeowners stay put because they’re worried about losing the low property taxes they’ve built over decades.
Thanks to Prop 19, that may no longer be the obstacle it once was.
Depending on your circumstances, you may be able to sell your current home, move into one that better fits your lifestyle, and still carry much of your existing tax benefit with you.
For some homeowners, that’s been the deciding factor that finally made downsizing possible.
Why it matters for your estate plan
If your goal is to leave your home to your children, now is the time to understand how Prop 19 could affect them.
The rules are very different than they were just a few years ago, and waiting until after a transfer happens could limit your options.
Having a conversation with your estate planning attorney and tax advisor now can help your family avoid costly surprises later.
The bottom line
Prop 13 and Prop 19 work together in ways that can have a major impact on both your finances today and your family’s plans for the future.
If you’re thinking about selling, downsizing, or simply wondering whether it still makes sense to stay in your current home, understanding these rules is an important first step.
While your Realtor can help you understand how these laws may affect your real estate decisions, it’s always wise to involve a qualified tax professional or estate planning attorney before making any final decisions.
If you’re considering a move and want to talk through your options, I’d be happy to help you understand how today’s market fits into the bigger picture and connect you with the right professionals along the way.
Blog Footer
GET YOUR FREE HOME SELLING BOOK
About the Author – Michelle Elliott
With over 20 years of experience navigating the fast-paced Silicon Valley market, I provide a strategic, results-driven approach to residential real estate. My career is built on a foundation of deep local expertise and a relentless commitment to my clients’ success, resulting in over $235 million in lifetime sales volume and a consistent ranking in the top 3% of agents in Santa Clara County and top 2% at Coldwell Banker. My expertise has been featured on KTVU Fox 2, Real Producers and the Willow Glen Resident. She is also the co-host of the San Jose Podcast “Say What You Want About Real Estate”
A Hyper-Local Expert with Global Reach
I specialize in San Jose, in the neighborhoods of Willow Glen (95125 & 95124) Cambrian Park and Almaden, Downtown San Jose/Japantown (95112) markets. As a certified Luxury Property Specialist with Coldwell Banker Realty, I combine high-end marketing strategies with granular neighborhood knowledge to help my clients achieve premium results.
The “Tiger” at the Negotiating Table
My clients have characterized me as a “tiger” at the negotiating table who remains “sweet and patient” with my clients throughout the process. I pride myself on being a fierce advocate for my buyers and sellers, ensuring the best possible terms in every transaction, and I strive to be the best Realtor in 95125! This balance, drive, and tenacity have earned me consistent 5-star ratings across Google, Zillow, Realtor.com, and Yelp.
Michelle Elliott
Michelle@michelleelliottrealtor.com
1712 Meridian Ave, Ste C, San Jose, CA
DRE 01777533
