For years, the single most common reason my older clients gave for staying in a house that no longer fit them was property tax. They had a 1980s assessed value on a home worth $2 million or more, and moving anywhere meant paying tax on the full price of the new home. Prop 19 changed that in April 2021, and it’s still surprising how many Silicon Valley homeowners over 55 don’t realize they can now take their low assessed value with them, anywhere in California, up to three times. This article explains the rules and runs the numbers on real local moves. It’s part of my guide to Prop 19 for Silicon Valley families.
Key Takeaways
Summary: If you’re 55 or older, Prop 19 lets you carry your low assessed value to a replacement home anywhere in California, up to three times. Buy within two years of selling, watch the 100, 105, and 110 percent value tests, and file form BOE-19-B with the new county.
From my practice: One seller I worked with, in her eighties, wanted to trade an older creekside house for something single-level and easier to care for in the same part of the county. We sold her house for $1,400,000, $50,000 over asking, and bought a three-bedroom single-level home for $725,000 all cash, with the proceeds moving straight from one escrow to the other. A move like that, 55 or older and buying for less, is exactly the kind of situation to review with the assessor, since the rules depend on the specific replacement home.
Who Qualifies
- At least one owner is 55 or older on the date the original home sells. Severely disabled homeowners and victims of wildfires or other governor-declared disasters also qualify under separate rules.
- The original home was your primary residence and qualified for the homeowners’ exemption.
- The replacement will be your primary residence.
- The replacement is bought or newly built within two years of the sale of the original, in either order.
Before Prop 19, the old Prop 60 and Prop 90 rules allowed a one-time transfer, only to a home of equal or lesser value, and only into the same county or one of the few counties that accepted transfers. Prop 19 removed those limits, which opened up moves like Saratoga to Santa Cruz, Palo Alto to Sacramento, or San Jose to San Diego to be near grandchildren.
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The Value Test
| When you buy the replacement | Replacement can cost up to this much with no added value |
|---|---|
| Before the original sells | 100 percent of the original’s sale price |
| Within one year after the original sells | 105 percent |
| Between one and two years after | 110 percent |
If the replacement is above the threshold, the full difference between the replacement’s market value and the original’s is added to your transferred assessed value. That makes buying a more expensive home possible, just with a partial increase.
Example 1: Saratoga to a Single-Level Home in Los Gatos
A couple in their early 70s bought their Saratoga home in 1986. Their assessed value is about $420,000. They sell it for $3,200,000 and buy a single-level home in Los Gatos for $2,150,000 six months later.
| Amount | |
|---|---|
| Saratoga sale price | $3,200,000 |
| 105 percent threshold (bought within a year) | $3,360,000 |
| Los Gatos purchase price | $2,150,000 |
| Assessed value on the new home | $420,000 |
| Annual property tax at about 1.1 percent | About $4,600, versus about $23,650 without the transfer |
That’s about $19,000 a year in savings, and it will continue for as long as they own the Los Gatos home. Over ten years, that’s well over $190,000.
Example 2: Buying a More Expensive Home
A widow in Willow Glen has a $250,000 assessed value and sells for $1,800,000. Eighteen months later she buys a newer home near her daughter in Campbell for $2,200,000. Her threshold in the second year is 110 percent, or $1,980,000. Because $2,200,000 is above that, the $400,000 difference between the two homes is added, and her new assessed value is about $650,000. That’s still far below the $2,200,000 she would otherwise be taxed on, a savings of roughly $17,000 a year at a 1.1 to 1.2 percent rate.
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A real example: One set of longtime owners I represented had held their home for almost thirty years and had already bought their next one before we listed. That took the pressure off: we tested the price as a Compass Private Exclusive, launched on the MLS in January, and sold for $2,050,000 with no contingencies, a 21-day close and a free 10-day stay after closing. If you’re 55 or older and buying first, talk to your CPA and the assessor early, because the base-year transfer has timing rules tied to both the sale and the purchase.
Buy First or Sell First?
The value test gives you the most room if you buy after selling, since the threshold rises to 105 and then 110 percent. But for many older homeowners, moving twice or renting in between is exhausting, and buying the next home first is far less disruptive. Buying first holds you to 100 percent of your original sale price, which is usually not a constraint when downsizing. The practical question is how to buy before you sell, and that’s where bridge loans, lines of credit, and brokerage programs that front preparation costs come in. I work through these options with clients as part of my Best Move approach.
For Best Results
How to File
You file form BOE-19-B with the Assessor in the county where the replacement home is located, generally within three years of buying it, and you must be living in the new home when you file. If you file within the first year, the new assessed value applies from the date you bought. The Assessor will confirm the original home’s details with its home county. Keep your closing statements for both homes, since the dates and prices drive the calculation.
Things to Watch For
- The two-year window runs in both directions. Mark the dates when you close each transaction.
- Market value, not price, is what counts. The Assessor can use market value if a sale price doesn’t reflect it, for example a sale to a family member below market.
- Capital gains are separate. The $250,000 or $500,000 home sale exclusion still applies to the gain on your original home, but it doesn’t change Prop 19. See my article on capital gains after 30 years in a Silicon Valley home.
- Three uses in a lifetime. If you downsize now and move to assisted living later, you may still have transfers left.
For the parent-child side of Prop 19 and the forms for inherited homes, go back to my guide to Prop 19 for Silicon Valley families.
Timing is Everything in Life
Frequently Asked Questions
Can I transfer my property tax base if I’m over 55 in California?
Yes. Under Prop 19, homeowners 55 or older can transfer the assessed value of their primary residence to a replacement primary residence anywhere in California, up to three times, within two years of selling.
Can I buy a more expensive home and keep my Prop 13 base?
Partly. If the replacement exceeds 100, 105, or 110 percent of the original’s sale price, depending on timing, the difference between the two values is added to your transferred assessed value.
How many times can I use the Prop 19 base-year transfer?
Up to three times in your lifetime.
Does the Prop 19 base-year transfer work between counties?
Yes. Prop 19 allows transfers to a replacement home in any California county.
What form do I file for a Prop 19 base-year transfer?
Form BOE-19-B, filed with the Assessor in the county of the new home, generally within three years of buying it, while you live there.
Sources and Further Reading
- California State Board of Equalization: Proposition 19
- California State Board of Equalization: Change in Ownership FAQ
- Santa Clara County Office of the Assessor
Downsizing Done Right
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