Will Proposition 19 Increase Inventory of Homes for Sale in Silicon Valley?
California voters have narrowly approved proposition 19. Proposition 19 allows eligible California homeowners to transfer their tax assessment to a different home of same or lesser value within the state without having to pay higher property taxes. Homeowners who are qualified for this proposition are persons over 55 years old or with severe disabilities and victims of natural hazard disasters /contamination victims. Any homeowner 55 years or older can transfer the tax assessment up to three times. This proposition is going into effect starting April 1 of 2021.
The cost of living and housing has significantly increased in the Silicon Valley and bay area. The rise in home prices has been a blessing but being on a fixed income or retirement has been a curse dealing with the high cost of living. Many Silicon Valley homeowners over the age of 55 felt trapped in their homes because there have little or no mortgage payments and have really low property taxes. If they were to sell and move then they would have to pay a higher property tax assessment. This dilemma had been keeping many elderly homeowners from not wanting to move at all.
With proposition 19, it will allow eligible homeowners the age of 55 to transfer the property tax base to any property in the state of Ca, regardless of location or value of the replacement primary residence within two years of the sale of the original primary residence.
Silicon Valley has seen historically low housing inventory in the past few years causing prices to skyrocket. The prices have gone up significantly due to low unemployment, high paying tech jobs and low interest rates. This new law should definitely encourage eligible homeowners to move closer to their family, friends or location where the cost of living may be significantly lower outside the Bay Area.
If the replacement property purchased is equal or lesser value than the sales price of the original primary residence, then tax assessment will be based on the original primary residence. If the property purchased is higher price than original primary residence, then the tax assessment would be based on the difference between the full cash value of the replacement property and full cash value of the original primary residence in addition to the taxable value of the original primary residence.
For ex: Original Primary Residence Sales Price : $1,000,000
Replacement Property Price : $1,500,000
New Property tax : $1,500,000-$1,000,000x 1.25% + Property Tax assessment of Original Primary Residence
Gina Arigna and Amit Singh have been helping Santa Clara, Alameda and San Mateo County residents purchase and sell residential real estate for the past 15 years. They work at Keller Williams Silicon City which is located in San Jose,Ca. Gina and Amit have helped many buyers realize their dream of homeownership by offering expert market knowledge, complimentary market snapshot, access to Keller Williams connections, expert negotiation and offer presentation, agent availability, responsiveness and post home purchasing assistance to name a few. They have also helped many sellers sell their home for top dollar, in a short period of time with the least hassle because of their complimentary and cutting edge marketing strategies. If you have any questions regarding the Mipitas or Santa Clara County real estate market, please reach out to Gina Arigna (408.858.6679) or Amit Singh (650.521.2320) or visit www.arignahomes.com