Proposition 19 Update Lecture Notes

Introduction

• Presenter: Christian Walsh, Kobo Banker, Wire Associates
• Location: Southern California
• Purpose: Update on Proposition 19 with FAQs
• Focus: Property tax transfers and exemptions for seniors (55+), severely disabled, and victims of wildfires/natural disasters

Proposition 19 Overview

• Passed: November 2020
• Components:
  1. Property Tax Transfers: Seniors (55+), severely disabled, wildfire/natural disaster victims can transfer property tax base.
  2. Inheritance and Property Taxes: Affects how property passed among family affects taxes (effective February 16, 2021).
  3. California Fire Response Fund: Created by Proposition 19.

Proposition 13 Context

• Passed: 1978
• Effect: Property taxes pegged to sale value; increases limited to 2% annually.
• Impact: Disparity between property values and taxes over time.

Proposition 19 Key Points

• Transferability: Homeowners can transfer property tax base across all 58 California counties.
• Examples:
  • Example with Warren Buffett: Demonstrates disparity in tax values over time.
• Expanded on Propositions 60 and 90: Initially allowed base transfer in select counties; now statewide.

Frequently Asked Questions

• Buy or Sell First?: Either is allowed; must transfer base within two years.
• Timing for Transfer (Post-April 1, 2021): Only one of the transactions (buy/sell) needs to occur after April 1, 2021.
• Multiple Uses: Up to three transfers allowed, even if Prop 60/90 was previously used.
• Eligibility:
  • Individuals 55 or older
  • Severely disabled
  • Wildfire/natural disaster victims
• Qualified Properties: Only residential and primary residences eligible.

Proposition 19 vs. Proposition 60/90

• Limitations: No limit on purchase price under Prop 19, unlike Prop 60/90.
• Property Tax Base Calculation: New base calculated if new property value is higher.

Strategic Use of Proposition 19

• Strategy for 55+:
  • Sell property in current seller’s market and set a record price.
  • Wait to buy another property while watching market trends.
  • Consider renting or traveling in the interim.
  • Purchase new property within 2 years to transfer tax base.
  • Flexibility to try 3 times (unlike Prop 60/90 which was one-time only).

Additional Support

• Contact: Real estate brokers in Southern California for assistance.
• Resources:
  • Subscribe to free weekly newsletter for updates.
  • Additional videos and content on related propositions and market updates.

Conclusion

• Encouragement to reach out with questions or success stories.
• Invitation to subscribe to the newsletter and channel for ongoing updates and honest advice.