HOME OWNERS 55 YEARS OF AGE AND OLDER

With the passage of Proposition 19,

A homeowner who is over 55 years of age,

severely and permanently disabled or

whose home has been substantially damaged by wildfire or natural disaster may transfer the taxable value of their primary residence to:

• A replacement primary residence

• Anywhere in the state

• Regardless of the value of the replacement primary residence (with adjustments if "greater" in value)

• Within two years of the sale

• Up to three times (but without limitation for those whose houses were destroyed by fire)

Proposition 19 replaces the old rules which limited this exemption to the sale and purchase of a principal residence within the same county (Proposition 60) or between certain counties (Proposition 90). Previously, these rules limited tax basis portability only to those transactions where the purchased property was of "equal or lesser value" to the original property. Under Prop 19, a property that is of greater value is still eligible for partial albeit significant tax relief.

DISCLAIMER:

Readers should consult their own professional tax advisors when making decisions that affect their taxes. As always, our advice whether buying or selling a property, a client should seek the advice of a qualified California real estate attorney or tax advisor.