Transfer of Property Tax Base to Replacement Property - Age 55 and Older
Did you know that California property owners who are 55 and older can transfer the taxable values of homes they have sold to homes they purchase or build to save money on property taxes? The Assessor's Office is committed to providing qualifying property owners with all applicable tax savings.
In November 2020, California voters approved Proposition 19, allowing homeowners aged 55 or older to transfer the taxable value of their principal residence to a replacement residence anywhere in California. This transfer can be used up to three times, provided specific requirements are met. "Taxable value" refers to a property's base year value plus annual inflation adjustments, commonly called the factored base year value.
Under Proposition 19, replacement homes are not reassessed to market value upon a change of ownership, avoiding the property tax increase that typically results from reassessment. If the factored base year value of the original property is lower than the market value of the replacement property, transferring the base year value can result in significant tax savings.
These provisions, implemented under Revenue and Taxation Code § 69.6, apply to property transfers occurring on or after April 1, 2021.
To qualify for this exclusion, the following conditions must be met:
The claimant must be age 55 or older at the time the original property is sold.
Either the sale of the original home or the purchase or new construction of the replacement home, or both, must occur on or after April 1, 2021.
The claimant must own and reside in the original property at the time of sale or within two years of the purchase or new construction of the replacement property.
The original property must be sold, and the replacement property must be purchased for consideration. Consideration is defined as something of value such as payment of cash, creation or cancellation of debt, or exchange of other property.
Additional information:
The original property must be your principal residence at the time of sale or within two years of buying or completing construction on your replacement home. It cannot be a vacation home.
The replacement property must be purchased within two years (before or after) of the sale of the original property.
You must be at least 55 years old when you sell your original property, but you can be under 55 when you purchase the replacement property.
If married, only one spouse needs to be at least age 55.
Under Prop. 19, you can transfer your base year value up to three times, regardless of whether you already received a base year value transfer prior to April 1, 2021, under Propositions 60 or 90.
If you buy a replacement property with a market value lower than that of the original property, any new construction completed on the replacement within two years of the sale of the original can be included in the transferred base year value, up to the amount of the original property’s market value.
You cannot benefit from this exclusion if you transfer your original property to your child and your child claims the parent-to-child exclusion.
If the market value of the replacement property is less than the factored base year value of the original property at the time of the transfer, then claiming the exclusion is not beneficial.
If you did not receive the Homeowners’ Exemption or Disabled Veterans’ Exemption on the original property, you can still qualify for a base year value transfer if you were eligible for one of these exemptions at the time of sale or within two years of the replacement property’s purchase or new construction.
Property owned by a legal entity (e.g., a corporation) is not eligible for a base year value transfer.
How to apply for the base year value transfer exclusion:
Complete form BOE-19-B, Claim for Transfer of Base Year Value to Replacement Primary Residence for Persons at Least Age 55 Years. Obtain the claim form from the County Assessor’s Office where the replacement property is located. Submit the completed form to the same office.
To qualify for this base year value transfer, the claim must be filed with the County Assessor within three years of the date you purchased or completed construction on the replacement home.
The base year value transfer is still available for claims filed after the three-year period; however, the transfer will be granted beginning with the year that the claim is filed.