Transferring the Property Tax Base.

Before we get too far into the year, we wanted to remind you of two significant changes that became effective in 2021 for California homeowners. They both relate to transferring the property tax base from an old to a new primary residence.

California Property Tax Updates

First Change

For owners over age 55, disabled, or victims of wildfire, you can now transfer your old primary residence property tax base to a new primary residence having a value greater than the sales price of your old home. Previously, this would completely disqualify you for a tax base transfer. Here are the details:

  1. Taxpayers can now transfer their base, with an additional tax base equal to the difference between the full cash value of the original primary residence and the full cash value of the replacement primary residence.

Example:  The old home sells for $1M, and the new home is purchased for $1.2M. The new tax base will be the original, plus $200,000.

  1. This change now applies across all county lines within California.
  2. This tax base transfer can occur up to three times within a taxpayer’s lifetime. Previously, we were limited to once in a lifetime.

Second Change

For those transferring their primary residences to their children or grandchildren—as we wrote in our December 2020 blog post—in order to keep the original property tax base, the child or grandchild will need to use the home as their primary residence.


Questions on how this applies to your particular situation? Contact your LSL partner or manager or get in touch with us here.

California Property Tax Updates

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