I’m hoping to tap into the collective wisdom here regarding California’s property tax base transfer rules for homeowners over 55 (often associated with Propositions 19, 60, and 90). My spouse and I are both over 55, and we’re trying to understand if—and how—we can transfer our existing property tax base to a newly constructed home. Here’s our situation:
Current Home
Original property tax base: $1M
Current market value: $2M
Owned & lived in: Past 10 years
New Home
Purchased: Early 2023 (older home)
Demolished and completed new construction recently (Q4-2024)
Expected market value: $3M
1. Timing
How long do we have to sell our current home to carry over our $1M property tax base to the newly constructed one?
I’ve read there’s typically a 2-year window under certain propositions—but is that 2 years from the date of purchase of the new property, or 2 years from the completion of the new construction?
2. Property Tax Calculation
Under the newer rules (Prop 19), if the new home is more expensive than the old one, the difference in market value is added to the original tax base.
In our scenario:
We plan to sell the current home for around $2M.
The new home’s value is around $3M.
So the difference ($3M - $2M = $1M) could be added to our old tax base ($1M), resulting in a new tax-assessed value around $2M.
Does this sound correct in practice—especially given we tore down and rebuilt, rather than just buying a new property?
3. Any Other Caveats?
Are there special forms or documentation we should submit to the county assessor’s office?
Do we need to file by a certain deadline?
Any pitfalls or unique considerations for newly constructed homes?
We’ve heard conflicting information from friends, so we’d like to clear things up before finalizing our plans.
Thanks in advance for sharing your knowledge!
Over-55 Property Tax Base Transfer in California – Timing & Calculation
Re: Over-55 Property Tax Base Transfer in California – Timing & Calculation
Here is a link to the BOE FAQs on Prop 19: https://www.boe.ca.gov/prop19/#FAQs
The most important thing for you is that you must sell the original home within 2 years of buying the replacement home. I believe that your gut-remodel of the new home is immaterial.
The most important thing for you is that you must sell the original home within 2 years of buying the replacement home. I believe that your gut-remodel of the new home is immaterial.
Re: Over-55 Property Tax Base Transfer in California – Timing & Calculation
One additional note:
You purchased the new home for a certain price. That is your FMV. Then, you did extensive remodeling to a point that the County needs to reassess the value (of the improvements, not of the land). That will be the value to take into account; not the market value. The two are bot necessarily the same.
You purchased the new home for a certain price. That is your FMV. Then, you did extensive remodeling to a point that the County needs to reassess the value (of the improvements, not of the land). That will be the value to take into account; not the market value. The two are bot necessarily the same.
Re: Over-55 Property Tax Base Transfer in California – Timing & Calculation
That is what is confusing. Because this is a new construction and not a remodel. Tore down the whole slab foundation and then did a crawl space, etc. Does the 2 years start from the buying time or from the date the new construction was completed?SuzBanyan wrote: Fri Jan 10, 2025 9:37 am Here is a link to the BOE FAQs on Prop 19: https://www.boe.ca.gov/prop19/#FAQs
The most important thing for you is that you must sell the original home within 2 years of buying the replacement home. I believe that your gut-remodel of the new home is immaterial.
Re: Over-55 Property Tax Base Transfer in California – Timing & Calculation
You may be right that the completion of the gut-remodel is the relevant date, as it was not capable of being your replacement primary residence before that time. If you bought a vacant lot, the language from the BOE certainly suggests that the completion date is what matters.Bunty wrote: Fri Jan 10, 2025 2:38 pmThat is what is confusing. Because this is a new construction and not a remodel. Tore down the whole slab foundation and then did a crawl space, etc. Does the 2 years start from the buying time or from the date the new construction was completed?SuzBanyan wrote: Fri Jan 10, 2025 9:37 am Here is a link to the BOE FAQs on Prop 19: https://www.boe.ca.gov/prop19/#FAQs
The most important thing for you is that you must sell the original home within 2 years of buying the replacement home. I believe that your gut-remodel of the new home is immaterial.
Unfortunately, this tax base transfer law was approved as a proposition, which are notorious for being “underwritten” with confusing and unclear language. And the law is still relatively new, as it went into effect in 2021. Ideally, you would sell the old house within 2 years of purchasing the new property so that you don’t become a test case. However, I see from your other post that the old house is not yet on the market.
You could try asking the assessor’s office, but if you can’t expedite the sale date of the old house, I’m not sure that would help much at this point. What may be most helpful is working with an attorney to draft your application for the base year transfer in such a way as to minimize the likelihood your County assessor will reject it. At a minimum, it might help for you to review the form and instructions that your County Assessor will require you to complete: BOE-19-B.
Re: Over-55 Property Tax Base Transfer in California – Timing & Calculation
You have a complicated situation, and likely may need to hire someone to deal with the county depending on how difficult they might be.
Given the land and house you purchased was in fact a livable house (though you may not have wanted to live there), that likely establishes the purchase date of the replacement house. The county likely doesn't care you bought it with the intention of being a tear down.
From that point on, you have two years to complete any improvements to that house - in your case tear it down and start over - to have the "final" value of the replacement house set. Note, this being construction, the county does not directly appraise this completed work based on market value, but rather takes your self reported construction costs that you have to provide via a form the county assessor will provide to you. The assessor will then at some point (1 to 6 months later) provide it's final assessed value for this "replacement house" (but at this point, it's just a house to them).
Separate from getting the "new" work dove within the two year window you bought this land and house, you had a two year clock started have your old house sale complete and closed to be eligible for the transfer of basis from old to new.
I believe you then have a two year window following the last transaction of the two properties to complete your paperwork and submit for the property tax transfer per the proposition.
It won't hurt talking with the assessor on this - they won't bend the rules for you, nor try to screw you - but I would certainly want to know if the 2 year clock started with the purchase of the tear down.
Finally, you may be pleasantly surprised what the new assessed value is set to as their tables and formula's for assigning value to new construction seem to set the assessed value to less than what the marked would bear if that house was sold - ie the county likes it better for a builder to sell to a buyer after a build vs the house being purchased via a construction contract type process.
Given the land and house you purchased was in fact a livable house (though you may not have wanted to live there), that likely establishes the purchase date of the replacement house. The county likely doesn't care you bought it with the intention of being a tear down.
From that point on, you have two years to complete any improvements to that house - in your case tear it down and start over - to have the "final" value of the replacement house set. Note, this being construction, the county does not directly appraise this completed work based on market value, but rather takes your self reported construction costs that you have to provide via a form the county assessor will provide to you. The assessor will then at some point (1 to 6 months later) provide it's final assessed value for this "replacement house" (but at this point, it's just a house to them).
Separate from getting the "new" work dove within the two year window you bought this land and house, you had a two year clock started have your old house sale complete and closed to be eligible for the transfer of basis from old to new.
I believe you then have a two year window following the last transaction of the two properties to complete your paperwork and submit for the property tax transfer per the proposition.
It won't hurt talking with the assessor on this - they won't bend the rules for you, nor try to screw you - but I would certainly want to know if the 2 year clock started with the purchase of the tear down.
Finally, you may be pleasantly surprised what the new assessed value is set to as their tables and formula's for assigning value to new construction seem to set the assessed value to less than what the marked would bear if that house was sold - ie the county likes it better for a builder to sell to a buyer after a build vs the house being purchased via a construction contract type process.