PROPOSITION 19 AND YOUR LOS ANGELES HOME
Navigating Property Tax Changes and Maximizing Your Sale in LA County
NOTE: Please consult with a CPA about your own personal tax situation.
Living in Los Angeles County means dealing with a lot in the real estate world. Prices change, and rules shift. Knowing what's happening is key to making good choices about your home.
Proposition 19, or the "Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act.", is a big change. It affects sellers in LA County a lot.
This guide will explain Proposition 19's impact on LA homeowners. We'll also give tips to help you sell your home well. Always talk to your CPA first.
UNDERSTANDING PROPOSITION 19: A BRIEF OVERVIEW
Proposition 19 changed the rules for property taxes in California. It passed in November 2020 and started on February 16, 2021.
Before Prop 19, there were limits on how much property taxes could go up each year. Also, parents could pass on their home and up to $1 million of other property to their kids without a big tax hit.
Proposition 19 changed these rules to help two main groups:
1. EXPAND PROPERTY TAX PORTABILITY
- Now, homeowners over 55, severely disabled, or who lost their home in a disaster can move their property tax base to a new home anywhere in California.
- Up to three times - a big change from the old rules that only allowed transfers within the same county.
- Must complete within 2 years of selling the original property.
2. LIMIT INTERGENERATIONAL PROPERTY TRANSFERS
This is where the big change is for many families:
- NEW REQUIREMENT: The child must live in the inherited property as their primary residence within one year.
- VALUE LIMIT: The property's value can't be more than $1,044,586 above the base year value (updated for 2025-2027).
- If child doesn't live there: The property is fully reassessed to today's market value.
- If over value limit: Partial reassessment happens even if the child moves in.
IMPORTANT 2025 UPDATE: On March 7, 2025, the California State Board of Equalization raised the exclusion amount to $1,044,586. This is a 2.15% increase from the previous amount of $1,022,600. This change is for transfers between February 16, 2025 - February 15, 2027.
In Los Angeles County, these changes matter a lot. The area has high property values and many families own homes for decades.
THE IMPACT ON SENIOR HOMEOWNERS (55+) IN LOS ANGELES COUNTY
Proposition 19 gives big benefits to seniors (aged 55 and older) and those severely disabled in Los Angeles County. They can sell their homes and buy new ones without a big tax increase.
MAJOR BENEFITS FOR SENIORS:
Downsize Without a Tax Hike
- Sell your large family home and buy a smaller condo or house
- Potentially free up equity without incurring massive property tax increases
Move Closer to Family
- Relocate to a different part of California to be nearer to children or grandchildren
- Take your favorable property tax basis with you
Adapt to Changing Needs
- Move to a home that better suits your physical needs (single-story, etc.)
- No financial penalty for necessary lifestyle adjustments
HOW THE TRANSFER WORKS:
Equal or Lesser Value Replacement Property
- Entire original tax base transfers to new home
Greater Value Replacement Property
- Difference in value is added to transferred base
- Results in blended tax basis
KEY REQUIREMENTS:
- Three-time use limit - can utilize benefit up to 3 times
- Two-year deadline - replacement property must be purchased/constructed within 2 years of original sale
- California only - replacement must be within state boundaries
This expanded portability is a game-changer for many seniors in LA County, giving them financial relief and lifestyle flexibility they didn't have before.
INTERGENERATIONAL TRANSFERS: A MAJOR SHIFT FOR LA FAMILIES
Proposition 19 brings big changes, but its biggest impact is on passing down homes to the next generation. Families in Los Angeles County are seeing big changes in how they can pass down their homes.
BEFORE PROPOSITION 19:
- Properties could be transferred without reassessment
- No requirement for child to live in property
- Common estate planning strategy in LA for preserving low property taxes
AFTER PROPOSITION 19:
PRIMARY RESIDENCE REQUIREMENT
- Inherited property must become child's primary residence within one year
- If not used as primary residence: property fully reassessed to current fair market value
VALUE LIMIT (Updated for 2025)
- Even if child moves in, there's a value limit of $1,044,586 above the factored base year value
- If fair market value exceeds this threshold: partial reassessment occurs
- New taxable value = Fair market value - $1,044,586 + factored base year value
EXAMPLE SCENARIO:
Property purchased in 1980 for $150,000
- Current assessed value: $250,000
- Current market value: $1,800,000
If child does NOT live there:
- Full reassessment to $1,800,000 market value
- Dramatic property tax increase If child DOES live there:
- Even then, reassessment due to value limit
- New assessed value: $1,800,000 - $1,044,586 + $250,000 = $1,005,414
- Significant increase from original $250,000 assessed value
This change has led to a surge in intra-family transfers before February 16, 2021, as families rushed to take advantage of the old rules.
STRATEGIES FOR LA SELLERS IN THE PROP 19 ERA
FOR SENIORS (55+): LEVERAGE THE PORTABILITY BENEFIT
- Calculate possible savings with a smart real estate agent and tax advisor
- Find the right replacement properties to get the most benefit
- Plan the timing carefully - you have 2 years to buy
- Think about moving multiple times - you have up to 3 chances
FOR FAMILIES WITH HIGHLY APPRECIATED PROPERTIES:
PROACTIVE ESTATE PLANNING OPTIONS:
Early Transfer Verification
- If transfer happened before February 16, 2021, old rules apply
- Check with a lawyer for the right documents
Primary Residence Commitment
- Talk to your heirs about living in the inherited home
- This is the ONLY way to keep some of the low tax base
Financial Planning for Reassessment
- Explain to your heirs about possible property tax hikes
- Set aside money or look into financial plans
- Plan for the $1,044,586 threshold (2025-2027 period)
Consider Strategic Sale
- Selling a highly appreciated property might be better
- Realize capital gains and share the money
- Avoid big property tax costs on the inherited home
CONSULT WITH EXPERTS
Proposition 19 is complex - talk to:
- Qualified real estate attorney for legal advice
- Tax advisor for financial planning
- Experienced real estate agent who knows Prop 19 in LA County
DETAILED SCENARIOS: HOW PROPOSITION 19 PLAYS OUT IN LA COUNTY
SCENARIO 1: THE DOWNSIZING SENIOR
Profile: Age 65, LA County resident for 30+ years
Original Property:
- Santa Monica single-family home
- Purchased 1990 for $300,000
- Current Prop 13 assessed value: $450,000
- Current market value: $2,500,000
Goal: Buy a smaller Pasadena condo for $1,500,000
RESULTS:
- Pre-Prop 19: Full reassessment to $1,500,000 - much higher taxes
- Post-Prop 19: Transfer entire $450,000 assessed value to new condo
- Outcome: Property taxes based on $450,000 instead of $1,500,000 = Substantial savings
SCENARIO 2: THE FAMILY HOME TRANSFER
Property Details:
- Silver Lake family home
- Purchased 1980 for $150,000
- Current Prop 13 assessed value: $250,000
- Current market value: $1,800,000
OUTCOMES:
If child does NOT use as primary residence:
- Full reassessment to $1,800,000
- Dramatic property tax increase
If child DOES use as primary residence:
- Will be reassessed due to value limit
- New assessed value: $1,800,000 - $1,044,586 + $250,000 = $1,005,414
- Significant increase but better than full reassessment
SCENARIO 3: THE WILDFIRE VICTIM
Situation: Malibu home destroyed by wildfire
- Original assessed value: $700,000
- Market value before fire: $3,000,000
- Replacement home in Calabasas: $2,800,000
RESULT:
- $700,000 assessed value transfers to replacement property
- New assessed value calculated based on difference in market values
- Crucial relief during difficult time
THE ROLE OF YOUR REAL ESTATE AGENT IN NAVIGATING PROPOSITION 19
An experienced real estate agent plays a key role in selling your home under Proposition 19. A skilled LA County agent will:
MARKET EXPERTISE
- Give insights on how Prop 19 changes buyer and seller actions
- Notice trends like more seniors downsizing or changes in inherited property handling
STRATEGIC PRICING
- Know the tax implications for buyers, like those inheriting properties
- Price your property right, considering these changes
PROFESSIONAL NETWORK
- Connect you with trusted tax advisors, estate planners, and real estate attorneys
- Give specialized Proposition 19 advice
MARKETING ADVANTAGES
- Highlight the benefits of portability for eligible senior buyers
- Market to buyers looking to save on taxes
TRANSACTION MANAGEMENT
- Make sure all Proposition 19 paperwork is done right
- Avoid delays or problems during the sale
Choosing an agent familiar with Proposition 19 is more than selling your home. It's about protecting your financial future and planning.
BEYOND PROPOSITION 19: OTHER CONSIDERATIONS FOR LA SELLERS
Proposition 19 is important, but it's part of a bigger picture for selling in Los Angeles County:
CURRENT MARKET CONDITIONS
- Is it a buyer's or seller's market?
- What's the inventory like in your area?
- Understanding broader trends for a successful strategy
INTEREST RATES
- Current rates affect sellers by changing buyer affordability and demand
- Higher rates can slow markets, making competitive pricing key
HOME CONDITION AND STAGING
- Well-kept and staged homes stand out
- Invest in minor repairs, decluttering, and staging
COMPREHENSIVE MARKETING STRATEGY
- Professional photography and virtual tours
- Targeted online ads
- Reach a wide audience of possible buyers (local and out-of-state)
ECONOMIC OUTLOOK
- Inflation, employment rates, and consumer confidence
- Broader economic factors affecting real estate market health
By considering Proposition 19 within this broader context, Los Angeles County homeowners can develop a holistic and effective strategy for selling their property.
FREQUENTLY ASKED QUESTIONS ABOUT PROPOSITION 19
Q1: Does Proposition 19 apply to all property transfers?
A: No. Prop 19 mainly affects: (1) base year value transfers for homeowners 55+, severely disabled, or natural disaster victims, and (2) intergenerational transfers (parent-to-child or grandparent-to-grandchild).
Q2: Can I transfer my property tax base to a home outside California?
A: No. Portability benefits only apply to replacement properties within California.
Q3: What if I inherited property before February 16, 2021?
A: The old rules (Proposition 58) apply. Property may retain low tax base without primary residence requirement or value limit. Confirm with tax professional.
Q4: How many times can I transfer my property tax base?
A: Eligible homeowners can transfer up to three times total.
Q5: What's the deadline for claiming primary residence exemption?
A: Child must claim inherited property as primary residence within one year of transfer date.
Q6: What's the current value limit for 2025?
A: $1,044,586 for transfers occurring between February 16, 2025 - February 15, 2027 (adjusted from previous $1,022,600).
Q7: Where can I find official Proposition 19 information?
A:
- Los Angeles County Assessor's Office: assessor.lacounty.gov
- California State Board of Equalization: boe.ca.gov
FINAL THOUGHTS FOR LOS ANGELES COUNTY SELLERS
Selling a home in Los Angeles County is a big deal. Proposition 19 adds a new layer to property taxes. It's very important to understand.
Whether you are:
- A senior looking to leverage portability benefits
- A family navigating intergenerational transfers
- Anyone planning a strategic property sale
Proactive planning and expert guidance are your best allies.
YOUR NEXT STEPS:
- Reach out to a real estate professional who specializes in the LA market and is well-versed in Proposition 19
- Calculate your specific situation with proper professional guidance
- Develop a strategic plan that fits your financial goals
- Act with proper timing - don't let opportunities pass by
Your home is more than just property - it's a legacy. Understanding Proposition 19 is key to protecting that legacy in the evolving California real estate landscape.
CONCLUSION
Proposition 19 has changed California's property tax landscape. It has big implications for homeowners in high-value areas like Los Angeles County.
THE OPPORTUNITIES:
- Valuable flexibility for seniors looking to move
- Strategic planning options for informed families
- Professional guidance to navigate complexities
THE CHALLENGES:
- New complexities for intergenerational property transfers
- Higher property taxes for many inherited properties
- Need for proactive planning and expert consultation
THE BOTTOM LINE:
Understanding these changes is key for making smart decisions about your property. By using benefits where you can, planning for tax increases, and getting expert advice, Los Angeles homeowners can handle Prop 19 well.
Don't let these changes catch you off guard - empower yourself with knowledge and expert guidance to make the best choices for your future and your family's legacy.
Document Updated Through August 2025 | Los Angeles County Real Estate Market Analysis
Ready to discuss your specific home sell or buy situation? Contact your trusted Los Angeles County real estate professional today. If you have an agent, call them as I respect agency.
NOTE: Please consult with a CPA about your own personal tax situation.
Mark Bolender, ABR
RE/MAX Gateway.
DRE:01065007.
Phone: 310-857-4956.
Email: [email protected]
Listings: www.markbolender.net. Resume: www.markbolender.me.
ACCURACY VERIFICATION: This document has been updated with the latest information through August 2025. It includes the March 2025 adjustment to the intergenerational transfer exclusion amount. The amount is $1,044,586 for the 2025-2027 period. All information is current as of August 2025. It is sourced from official California State Board of Equalization announcements and Los Angeles County Assessor guidance.
