You've lived in your home a long time. The extra bedrooms have quietly turned into storage, the yard takes more of your weekend than you'd like, and something smaller sounds really good.

Then you look up what the property taxes would be on a new purchase, and the idea goes right back on the shelf.

If that's you, I want you to know about Proposition 19. For homeowners 55 and older, it can make downsizing (or "right-sizing") a lot more realistic than you may think.

Under Proposition 13, your home's assessed value is set when you buy it, and after that it can generally rise by no more than 2% a year. If you bought years ago, your taxable value is likely far below what your home would sell for today. When you buy a new home, that value normally resets to the purchase price. That reset is the "tax shock" so many long-time owners are afraid of.

Since April 1, 2021, Prop 19 lets eligible homeowners transfer their existing "base year value" (your taxable value) to a replacement home. Here are the key rules, straight from the State Board of Equalization and our own County Assessor:

• You must be at least 55 when you sell your original home. (Severely disabled homeowners and victims of wildfire or other natural disasters can qualify too, under separate forms.)
• Both homes must be your principal residence.
• You can buy or build your replacement home anywhere in California. It doesn't have to be in the same county.
• You have two years from the sale of your original home to buy or build the replacement.
• You can use this benefit up to three times in your lifetime.

This is where people get surprised, in a good way. Under Prop 19, there's no cap on what your replacement home can cost. If it's worth more than the home you sold, the difference is simply added to your transferred tax value.

The San Luis Obispo County Assessor gives a clear example: say your current home has a base year value of $100,000 and you sell it for $400,000.

• If you buy a replacement for $390,000 (equal or less), your $100,000 base year value carries over.
• If you buy a replacement for $600,000, the $200,000 difference is added, so your new base year value would be $300,000. That's still far below the $600,000 purchase price.

The exact comparison can depend on your timing, so I always recommend getting the Assessor's read on your specific numbers before you write an offer.

The benefit isn't automatic. For homeowners 55 and older, the claim form is BOE-19-B, filed with the County Assessor in the county where your NEW home is located. To get the full benefit back to your purchase date, file within three years of buying or finishing your replacement home. You can still file later, but relief would only apply going forward. You'll also need to own and live in the new home as your principal residence when you file.

1. Find your current base year value (it's on your property tax bill, or ask the Assessor).
2. Get a realistic idea of what your home would sell for today.
3. Decide on a price range for your next home with the Prop 19 math in mind.
4. Map out the timing. Selling first, buying first, or a contingent purchase each have trade-offs, and the two-year window matters.
5. Talk to your tax professional about the bigger picture (capital gains, trusts, estate plans).
6. File BOE-19-B as soon as you close on the new home.

Downsizing is a big decision, and it's about a lot more than taxes. It's about where you want to spend this next chapter. If you're wondering whether a smaller home makes sense for you, I'd love to help you run the numbers and plan the timing so the sale and the purchase work together. Call or text me at (805) 400-5543, email CentralCoastLiz@gmail.com, or reach out through my contact page.

Liz Anderson, Broker/Owner, Central Coast Premier Realty | DRE #01462145

General information, not legal or tax advice. Property tax rules can change, so confirm your situation with the County Assessor and a qualified tax professional.

Equal Housing Opportunity.

• San Luis Obispo County Assessor, "Prop 19 Base Year Value Transfer"
• California State Board of Equalization, "Introduction to Prop 19" (April 2023)
• Placer County Assessor, "Persons 55+ Tax Base Transfer"
• California DRE Reference Book, Ch. 16 "Taxation and Assessments"