California Proposition 19

Proposition 19 is a California constitutional amendment that determines when property taxes can remain based on an existing assessed value and when they must be reassessed to current market value. It applies in two situations: when certain homeowners sell a primary residence and purchase another primary residence, and when property is transferred to family members through inheritance. For homeowners who move, eligibility is limited to those who are age 55 or older, severely and permanently disabled, or whose primary residence was substantially damaged or destroyed by a wildfire or other qualifying natural disaster.

In simple terms, Proposition 19 answers two questions:
• Can I keep my property taxes low if I move?
• What happens to property taxes when a home is inherited?

Because the rules differ depending on the situation, Proposition 19 does not treat every homeowner the same.

Why Proposition 19 is So Often Confused

Most confusion happens because people hear rules like “you have to live in the home for two years” and assume that applies to property taxes. It does not. That requirement relates to capital gains taxes when selling, not to property tax reassessment under Proposition 19.

What Does Proposition 19 Actually Do?

Proposition 19 does two independent things:

• Allows certain homeowners to transfer their existing property tax base when they move
• Sets new rules for how property taxes are handled when real estate is inherited

These parts of the law operate separately and have different eligibility requirements and outcomes.

Who Can Transfer Their Property Tax Base Under Proposition 19?

Only the following homeowners may transfer an existing property tax base:

• Homeowners age 55 or older
• Homeowners who are severely and permanently disabled
• Homeowners whose primary residence was damaged or destroyed by wildfire or qualifying natural disaster

Additional required conditions:

• The property sold must be the homeowner’s primary residence
• The replacement property must also become the homeowner’s primary residence

Eligible homeowners may sell their primary residence and transfer their tax base to a replacement home anywhere in California, subject to timing and value limits.

This transfer benefit does not apply to inherited property.

Can I Transfer My Property Tax Base to a More Expensive Home?

Yes. If the replacement home costs more than the original, the difference in value is added to the transferred tax base. The benefit is preserved up to the value of the original home, but property taxes increase incrementally on the price difference.

Example: Buying a More Expensive Replacement Home Under Proposition 19

Susan is 66 and sells her primary residence. Her property taxes are based on an assessed value of $1,000,000, even though the home sells for much more.

She buys a new primary residence for $1,500,000.

Under Proposition 19:
• Susan transfers her $1,000,000 tax base
• The $500,000 difference is added
• Her new assessed value becomes $1,500,000

Result: Susan keeps her tax benefit and pays higher taxes only on the additional $500,000.

How Many Times Can You Transfer a Property Tax Base Under Proposition 19?

• Seniors and severely disabled homeowners may transfer their tax base up to three times
• Disaster victims may receive a transfer for each qualifying disaster event

This expansion is often overlooked.

Does Proposition 19 Apply to Inherited Property?

Yes, but under completely different rules.

When property transfers from a parent to a child (or from a grandparent to a grandchild), Proposition 19 determines whether the property is reassessed to market value or retains limited tax protection.

This is not a transfer of a tax base by the heir. It is a reassessment determination applied to the inherited property itself.

When Does Reassessment Happen for Inherited Property?

Reassessment occurs at the time of death, not when the heir later moves in, rents the property, or sells it.

The key moment is: the death of the owner whose name was on title

Do Children Have to Live in an Inherited Home Under Proposition 19?

In most cases, yes.

To preserve any portion of the parent’s tax base:

• The home must have been the parent’s primary residence
• The child must move in and make it their primary residence
• The homeowner’s exemption must be filed on time

If these conditions are not met, the property is reassessed.

What Happens If I Inherit a Rental or Investment Property?

Inherited rental, vacation, or investment properties are fully reassessed under Proposition 19.

This includes properties that:
• Were rentals during the parent’s lifetime
• Are converted to rentals after inheritance
• Are kept as second homes

Family ownership alone does not prevent reassessment.

If I Move Into an Inherited Rental Later, Does That Reverse the Reassessment?

No. Proposition 19 evaluates eligibility at the time of inheritance. If the property was not the parent’s primary residence, reassessment occurs immediately. Moving in later does not undo or reverse it.

How Prop 19 Applies to Multi-Unit Inherited Properties

You may qualify for limited protection only for the portion that was the parent’s primary residence.

If the parent lived in one unit of a multi-unit or mixed-use property:
• That residential portion may qualify
• The heir must move into the same unit
• The remaining rental or commercial portions are reassessed

County assessors allocate value between units, which is why documentation and timely filings matter.

How Is Property Tax Reassessment Calculated When You Inherit a Home?

Reassessment depends on the Proposition 19 cap, which can result in:
• No reassessment
• Partial reassessment
• Full reassessment

Small valuation differences can significantly change the outcome.

What Is the Proposition 19 Reassessment Cap?

The cap is based on:
• The parent’s assessed property tax value
• An additional exclusion amount adjusted for inflation

If market value exceeds the cap, only the excess is reassessed.

Why Did My Property Taxes Go Up Even Though I Moved In?

Because moving in does not guarantee full protection.

If the property’s market value exceeds the allowed exclusion amount, only part of the tax base carries over. The remainder is taxed at current value.

Why Do People Think They Have to Live in the Property for Two Years?

This confusion has nothing to do with Proposition 19.

People are mixing property tax rules with capital gains tax rules.

Does Living in the Property Affect Property Taxes or Capital Gains?

It depends on which tax you’re talking about.

Living There for Property Taxes (Proposition 19)

Living in the home matters only if you are trying to preserve a low property tax base at the time of inheritance. If reassessment has already occurred, living there later does not change it.

Living There for Capital Gains Taxes (Federal and California)

Living in the home for 2 out of the last 5 years may reduce capital gains taxes when you sell. This applies only to income taxes and has no effect on property tax reassessment.

Does Proposition 19 Affect Capital Gains Taxes?

No. Proposition 19 applies only to property taxes. Capital gains taxes are governed by separate federal and California income tax laws.

Are Proposition 19 Benefits Automatic?

No. Benefits must be claimed, and filing deadlines matter. Missing required filings can result in loss of benefits even if the property otherwise qualifies.

Key Takeaway on Proposition 19

Proposition 19 is not uniformly good or bad. Outcomes depend on:
• Who owns the property
• How the property is used
• Whether it is sold or inherited
• Whether requirements are met on time

Most costly mistakes happen when people confuse Proposition 19 property tax rules with capital gains tax rules. Understanding which law applies before making decisions involving a move or inheritance can prevent irreversible tax consequences.