If you are 55 or older and move to another California home, Proposition 19 lets you take your low property tax base with you. Your savings equal what you would have paid on the new home minus what you actually pay with your base transferred. This page shows you how to calculate both numbers using figures from your current tax bill.
There are two cases, and which one applies depends on price:
- Replacement costs the same or less than your sale price. Your base transfers unchanged.
- Replacement costs more. Your base transfers plus the difference in price.
Neither case reassesses you to the full purchase price, which is what happens without the benefit.
Key Facts
- You must be 55 or older, severely disabled, or a victim of a wildfire or declared disaster.
- The move works anywhere in California, county to county.
- You may use it three times in your lifetime (disaster victims are treated separately).
- Buy and sell within two years of each other, in either order.
- More expensive replacement: new base = old base + (new price − old sale price).
- No cap on the replacement home’s price, and no requirement to buy down.
What You Need Before You Start
Three numbers, and two of them come from paperwork you already have.
Your factored base year value. This is what the county taxes today, not what you paid decades ago. Find it on your annual property tax bill or your assessor’s online parcel lookup, labeled assessed value, net taxable value, or factored base year value.
Your sale price. The full cash value of the home you are selling. Use a realistic estimate if you have not sold yet.
Your replacement price. The full cash value of the home you are buying.
Your tax rate. The basic California rate is one percent. Most counties add voter-approved bonds and assessments, bringing the effective rate to roughly 1.1 to 1.25 percent. Your current bill shows the actual rate.
Throughout this page the examples use one percent for clarity.
Case One: Buying Equal or Lesser Value
The simplest case, and the most common one for people downsizing.
If your replacement home costs the same as or less than what you sold for, your factored base year value transfers to the new home unchanged. Nothing is added.
A worked example. You sell a Sacramento home for $700,000. Your factored base year value is $150,000. You buy a smaller home for $650,000.
- New home, reassessed at purchase: taxable value $650,000, annual tax about $6,500
- New home, base transferred: taxable value $150,000, annual tax about $1,500
Annual savings: about $5,000. Over ten years in the new home, roughly $50,000, before counting the two percent annual growth on the higher base that you also avoid.
Case Two: Buying a More Expensive Home
This is the case Proposition 19 opened up, and the one most homeowners do not realize they have.
Under the old rules, buying up meant losing the benefit entirely. Now you keep it, and only the price difference is added to your base:
New base = old base + (replacement price − sale price)
A worked example. Same seller: $700,000 sale price, $150,000 factored base year value. This time you buy for $900,000.
- Difference: $900,000 − $700,000 = $200,000
- New base: $150,000 + $200,000 = $350,000
- New home, reassessed at purchase: taxable value $900,000, annual tax about $9,000
- New home, base transferred: taxable value $350,000, annual tax about $3,500
Annual savings: about $5,500. Note that buying up saved more per year than buying down did, because the avoided reassessment was larger.
The Estimator in Six Lines
Fill these in with your own figures.
- Factored base year value (from your tax bill): _______
- Sale price of your current home: _______
- Replacement price: _______
- Difference: line 3 − line 2, or zero if line 3 is not greater than line 2
- Your new taxable value: line 1 + line 4
- Annual savings: (line 3 − line 5) × your tax rate
Line six is the number to plan around. It repeats every year you own the home, and it compounds, because the two percent annual cap applies to the smaller base.
Three Scenarios Side by Side
The same seller each time: $150,000 base, $700,000 sale price.
- Buy at $500,000: new base $150,000. Tax without the benefit about $5,000, with it about $1,500. Annual savings about $3,500.
- Buy at $700,000: new base $150,000. Tax without the benefit about $7,000, with it about $1,500. Annual savings about $5,500.
- Buy at $1,200,000: new base $650,000. Tax without the benefit about $12,000, with it about $6,500. Annual savings about $5,500.
Two patterns worth noticing. Buying down does not increase your savings, because your savings track the reassessment you avoided rather than the price you paid. And once you buy above your sale price, the annual saving levels off, because every dollar of the price difference is added to your base anyway.
What the Number Does Not Include
Your property tax saving is one line in a larger calculation, and treating it as the whole picture leads to bad decisions.
Selling costs. Commissions, closing costs, and repairs typically consume a meaningful share of your equity.
Capital gains. California conforms to the federal exclusion of $250,000 of gain for a single filer and $500,000 for a married couple filing jointly on a principal residence, subject to ownership and use tests. On a long-held California home, gain can exceed that, and the tax on the excess is a real cost the property tax saving does not offset.
The cost of the new home itself. A larger mortgage payment can dwarf a $5,000 annual property tax saving.
Moving and settling costs, which are easy to underestimate.
The property tax saving is durable and recurring, which makes it valuable. It is rarely large enough to justify a move on its own.
Rules That Change the Answer
A few conditions decide whether you get to run this calculation at all.
Both homes must be your principal residence, and you must claim the homeowners’ exemption or the disabled veterans’ exemption on each.
The two-year window runs in either direction. You may buy first and sell within two years, or sell first and buy within two years.
File form BOE-19-B with the assessor of the county where the replacement home sits, within three years of purchasing or completing the replacement home. Disabled homeowners file BOE-19-D and disaster victims BOE-19-V.
Three lifetime transfers for age-55 and disabled claimants. Disaster and wildfire claims are handled under their own provision.
No age requirement on your spouse if you qualify, though the claimant must be an owner of record.
Summary
- Your saving equals the tax you avoid, not the tax you pay, so it tracks the reassessment you sidestepped.
- Buying equal or lesser value transfers your factored base year value unchanged.
- Buying more expensive adds only the price difference to your base.
- Use the factored base year value from your tax bill, not your original purchase price.
- Savings recur every year and compound, because the two percent annual cap applies to a smaller base.
- The calculation ignores selling costs, capital gains, and the cost of the new home, all of which belong in the decision.
- You must be 55 or older, severely disabled, or a disaster victim, move within two years, and file BOE-19-B.
Get the Full Picture
Talk to Bart. If you want your actual numbers run before you list, Bart Hubbard can estimate your transferred base and what a specific replacement home would cost you annually. Reach out at Prop19Hero.com.
Read the book. Prop 19 Hero works through the transfer calculation for every combination of buying up, buying down, and buying across county lines, with the filing steps for each. Find Prop 19 Hero on Amazon.
About the Author
Bart Hubbard is a California real estate associate at HomeSmart ICARE Realty (DRE #01815497) and a C.A.R. Certified Probate & Trust Specialist. He wrote Prop 19 Hero to give California homeowners 55 and older a clear, practical guide to the property tax rules that affect every move they make. He works with buyers and sellers throughout the Sacramento area. Reach him at info@prop19hero.com or www.prop19hero.com. More about Bart Hubbard.
