Getting Started with The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act (Proposition 19)

Proposition 19 added section 2.1 to:

• Beginning April 1, 2021, allow taxpayers who are severely disabled, over the age of 55, or victims of a wildfire or other natural disaster to transfer the taxable value of their primary residence to a replacement primary residence regardless of the replacement residence's value or location, provided the replacement residence is purchased or newly constructed within two years of the date the original residence is sold; and
• Beginning February 16, 2021, limit the parent-child and grandparent-grandchild transfer exclusions from change in ownership so they only apply to a purchase or transfer of a family home or family farm and the taxable value of the transferred property increases when its assessed value exceeds a new value limit.

Proposition 19 added section 2.2 to annually allocate any additional revenues or savings to the state, as calculated by the Director of Finance, from the implementation of the property tax changes described above, as follows:

• 75 percent to the newly created California Fire Response Fund, which shall be appropriated by the Legislature, to expand fire suppression staffing; and
• 15 percent to the newly created County Revenue Protection Fund, which is continuously appropriated, to reimburse counties and local agencies with a negative gain (or revenue decrease) resulting from the implementation of the property tax changes described above.

Proposition 19 added section 2.3 to require each county to annually determine the gain for the county and for each local agency in the county resulting from the implementation of the property tax changes described above by adding the following amounts:

• The revenue increase resulting from the sale and reassessment of original primary residences for outbound intercounty transfers;
• The revenue decrease, which shall be expressed as a negative number, resulting from the transfer of taxable values of original primary residences located in other counties to replacement primary residences located within the county for inbound intercounty transfers; and
• The revenue increase resulting from the changes to the parent-child and grandparent-grandchild transfer exclusions referenced above.

Proposition 19 also added section 2.3 to require the CDTFA to:

• Adopt a regulation specifying the deadline for the counties' annual determinations;
• Use the counties' determinations to make its own calculations of each eligible county's and local agency's aggregate gain every three years; and
• Provide full or pro rata reimbursement to the eligible counties and local agencies with an aggregate negative gain (or revenue decrease) from the money in the County Revenue Protection Fund.