If you’re planning retirement in Menlo Park, Palo Alto, Atherton, or nearby communities, Proposition 19 could make a big difference in your housing decisions. This California law allows many homeowners age 55 and older, those with certain disabilities, and victims of wildfires or natural disasters to move while keeping their lower property tax base. It also changed the rules for inherited homes, which now generally keep a low tax rate only if the new owner makes the property their primary residence and meets value limits.
For Silicon Valley retirees, understanding these rules is key when considering downsizing, relocating closer to family, or planning how to pass property to the next generation. In this guide, we’ll break down what Prop 19 means in simple terms, highlight the most common questions, and point to official resources you can use to make informed choices.
What Is Proposition 19?
Proposition 19 is a statewide law that changed how property taxes work in California. It was approved by voters in 2020 and amended the state constitution. The law has two major parts that directly affect homeowners in Silicon Valley:
Property Tax Portability for Older and Disabled Homeowners
-
If you are 55 or older, have a qualifying disability, or lost your home in a wildfire or natural disaster, you may be able to transfer your current property tax base to a new home anywhere in California.
-
This can help you move without facing a large increase in annual property taxes.
Changes to Inherited Properties
-
Under earlier rules, children could often keep their parents’ low property tax base when inheriting a home, even if they didn’t live there.
-
Prop 19 narrowed this. Now, a child (or grandchild, in some cases) generally keeps the lower tax base only if the inherited home becomes their primary residence and the home’s value falls within certain limits.
Together, these rules are designed to give retirees more flexibility to move while closing loopholes on inherited properties that weren’t used as family homes.
Note: Specific filing requirements, forms, and deadlines apply. Always confirm your eligibility with the California State Board of Equalization (BOE) or your county assessor.
Who Qualifies and Why It Matters
Proposition 19 is designed to help certain homeowners move without a big jump in property taxes.
Who Qualifies:
- Age 55 or older
- Severely and permanently disabled homeowners
- Homeowners who lost their main home in a wildfire or natural disaster
To use this benefit:
-
The home you sell must be your primary residence.
-
You must buy or build your new home within two years.
-
If you’re 55 or disabled, you can use this up to three times in your life. Disaster victims are not limited.
Why It Helps
In California, your property tax bill is based on your home's tax base, usually the price you paid for it, plus small yearly increases. If you've owned your home for decades, your tax base is probably far lower than current market values.
Prop 19 lets you move that lower tax base to a new home anywhere in California. This can save thousands of dollars each year compared to starting over with a new, higher tax bill.
For retirees in Silicon Valley, that means more freedom to downsize, relocate closer to family, or adjust your lifestyle without losing the benefit of years of lower property taxes.
Tip: If your new home costs more than the one you sell, your tax bill may still rise somewhat. Check with your county assessor before you make any decisions.
Key Rules and Common Questions
Even if you qualify for Proposition 19, a few important details can affect your savings:
-
Filing Deadlines: You must file a claim with your county assessor (using the BOE-19 series forms). Filing within three years is required for full retroactive savings, but filing sooner is strongly recommended.
-
When Your New Home Costs More: You can transfer your lower tax base, but if the new home costs more, the difference gets added to your taxes.
-
Primary Residence Requirement: Both the home you sell and the home you buy must be your main residence. Vacation homes or rentals don’t qualify.
-
Local Notes: Santa Clara County and San Mateo County both require state forms such as BOE-19-B (55+) or BOE-19-D (disabled). Each county has its own process, but both encourage filing early.
Frequently Asked Questions
Can I use Proposition 19 more than once?
Yes. If you are 55 or older or have a qualifying disability, you can transfer your tax base up to three times in your lifetime. Disaster victims are not limited.
Does it matter when I file the forms?
Yes. You usually need to file within three years of buying your new home. Filing early avoids missed savings.
Can I transfer my tax base anywhere in California?
Yes. Unlike older rules that only allowed transfers within certain counties, Prop 19 lets you transfer your tax base anywhere in the state.
How does Prop 19 affect leaving a home to children?
Children (and in some cases grandchildren) can keep a low tax base only if the inherited home becomes their main residence and its value falls within state limits. If not, the property is reassessed at market value.
Tip: These rules can be complex, especially for inherited properties or higher-value homes. Always check with your county assessor or a qualified tax advisor.
Real-Life Examples in Silicon Valley
Example 1: Downsizing in Menlo Park
A couple in their 60s has lived in their Central Menlo home since the 1980s. Their tax bill is based on what they paid decades ago, which is much lower than today’s values. They decide to downsize to a smaller one-story home nearby. Under Proposition 19, they can transfer their old, low tax base to the new property. This lets them save thousands of dollars a year while moving into a home that better fits their retirement lifestyle.
Example 2: Moving Closer to Family in Palo Alto
A retired homeowner in Atherton wants to move to Palo Alto to be closer to grandchildren. The new home costs more than the one being sold. With Prop 19, she can still transfer her old tax base. However, because the new home is more expensive, the price difference is added on. Her tax bill goes up, but it’s still much lower than it would be if she had to start fresh at the new home’s full market value.
How Proposition 19 Fits Into Retirement Planning
For many homeowners in Menlo Park, Palo Alto, Atherton, and nearby areas, a big part of retirement planning is deciding whether to stay in your longtime home or make a change. Proposition 19 gives you more options by making it possible to move without losing the benefit of your lower property tax base.
More Flexibility
-
Downsize to a smaller home that’s easier to maintain.
-
Relocate closer to children, grandchildren, or medical care.
-
Move to a different part of California while keeping much of your property tax savings.
Estate Planning Considerations
Prop 19 also affects what happens when you pass a home to your children. They may only keep the low property tax base if they use the home as their primary residence and the value stays within the allowed limits. For many families, this changes how they think about passing property from one generation to the next.
Why Professional Advice Matters
Property tax rules can be complex, especially when tied to retirement moves or inheritance. Speaking with a tax advisor can help you avoid mistakes and understand how Prop 19 works in your exact situation.
Reminder: This information is general and not tax or legal advice. Always confirm details with a qualified professional.
For many retirees in Menlo Park, Palo Alto, Atherton, and across Silicon Valley, Proposition 19 can make moving in retirement more affordable. By allowing qualified homeowners to transfer their lower property tax base to a new primary home, the law provides flexibility to downsize, relocate closer to family, or find a home that better fits changing needs.
At the same time, the rules can be complex. Filing deadlines, property value limits, and the requirement that both homes be primary residences are details that can affect how much you save. Local assessor offices in Santa Clara County and San Mateo County provide the official forms and guidance you’ll need, and it’s always wise to double-check with them before making a move.
Next Step: If you’re considering downsizing or relocating in Menlo Park, Atherton, or Palo Alto, reach out to the Dana Carmel Group for a personalized consultation. We’ll guide you through your options and help you make a confident decision about your next chapter.
Disclaimer: This article is for general information only. Always confirm details with a qualified tax professional and your county assessor before making financial decisions.
