Proposition 19's Impact on San Diego Property Taxes: What You Need to Know
In 2020, Proposition 19 narrowly passed in California, amending the state constitution and fundamentally changing how property taxes are calculated for San Diegans. This law has had significant implications, particularly for those over the age of 55, as it allows them to maintain their original property tax rate when selling their home and purchasing a new one, with a maximum of three transfers. However, to generate a net increase in property taxes statewide, Proposition 19 has also imposed limitations on property tax benefits related to inheritances. Let's dive deeper into how Proposition 19 has affected San Diego residents.
1. Changes in Property Tax Benefits for Seniors
- Under Proposition 19, individuals over the age of 55 can retain their original property tax rate when selling and buying a new home, up to a maximum of three times. This provision offers seniors more flexibility and the opportunity to downsize or relocate while keeping their property taxes manageable.
2. Limitations on Property Tax Benefits for Inheritances
- Prior to Proposition 19, inheriting property, whether it was a primary residence, second home, vacation home, rental property, or business, often allowed heirs to maintain the property's existing property tax rate. This was a valuable benefit for many families.
- Now, Proposition 19 has restricted this benefit. To keep the original property tax rate (up to $1 million in value) on inherited property, the heir must inherit it from a parent or grandparent and make it their primary residence. If the property is ever converted into a rental or used differently, it will be reassessed at its current market value, leading to potentially higher property tax bills.
3. Time Constraints on Filing
- One challenging aspect of Proposition 19 is the strict time limit for filing necessary paperwork. To retain the tax rate, heirs must file the required documents with the county's tax assessor's office within one year of the family member's passing. This requirement can be difficult to meet, especially during emotionally charged times when families are dealing with the loss of a loved one.
4. Unintended Consequences
- Jordan Marks, San Diego County Assessor, highlights some of the unintended consequences of Proposition 19. He points out that the law, while addressing certain issues, has inadvertently led to increased property tax bills for many residents.
- Families facing property disputes or unsure about the future use of an inherited property may not immediately consider making it their primary residence to retain the original tax rate. Consequently, they may see substantial increases in their property tax bills.
5. Dramatic Increases in Property Taxes
- The effects of Proposition 19 on property tax bills have been striking. Some homeowners have seen their property tax bills skyrocket from as low as $1,600 per year to as high as $10,000 per year due to the new law.
- Hundreds of San Diegans have reached out to the assessor's office in search of solutions to mitigate these unexpected increases.
6. Proactive Measures by the Assessor's Office
- San Diego County Assessor Jordan Marks and his team are taking proactive steps to educate San Diegans about the implications of Proposition 19. They are collaborating with mortuaries to provide families with checklists of required paperwork, ensuring that necessary filings are completed promptly.
- Additionally, the assessor's office has launched the Navigating Loss Program to guide family members through the online process, offering support and information to help them navigate the complexities of Proposition 19.
Conclusion
Proposition 19 has brought both benefits and challenges to San Diego homeowners, particularly seniors and heirs of inherited properties. While it offers greater flexibility for seniors to move while maintaining their property tax rates, it has also introduced limitations and time constraints that can lead to unexpected increases in property tax bills. San Diegans affected by this law should stay informed, seek guidance, and ensure they comply with the requirements to make the most informed decisions about their properties and taxes in light of Proposition 19's changes.
