How Prop 19 Works For Silicon Valley Homeowners

Thinking about moving within California but worried your property taxes will jump? If you own a home in Los Gatos or nearby Silicon Valley communities, Proposition 19 may help. You could keep a lower assessed value when you buy a replacement home, and you should also understand how the law affects inherited properties. In this guide, you will learn the key rules, see simple examples, and get practical next steps tailored to Santa Clara County. Let’s dive in.

What Prop 19 changed

Prop 19 made two big changes to California property-tax rules that matter to you as a homeowner in Los Gatos:

• Portable tax base for eligible movers. If you are 55 or older, severely disabled, or a victim of a qualifying disaster, you can often transfer your Prop 13 assessed value from your current primary residence to a replacement primary residence anywhere in California, if you file the right claim.
• Narrower inheritance exclusions. Parent-to-child and grandparent-to-grandchild transfers are now more limited. Many inherited properties that are not used as a primary residence by the heir will be reassessed at market value, which can increase annual property taxes.

Portability in plain English

If you qualify and follow the process, you can carry your old assessed value to your new primary residence. This can keep your annual property tax lower than it would be if the new home were assessed at full market value. Prop 19 allows statewide transfers and expanded the number of times an eligible owner can transfer their base year value. County assessors administer the rules and calculate the assessed value.

Inheritance rules at a glance

For parent-to-child transfers to avoid reassessment today, the child must make the property their principal residence and meet a limited exclusion threshold. Second homes and rental properties no longer qualify for the old broad exclusion. In Silicon Valley, where market values are often far above assessed values, heirs who inherit non‑owner‑occupied homes should expect reassessment.

Why it matters in Los Gatos

High prices, big tax gaps

Los Gatos and surrounding Silicon Valley cities have high home prices and many long‑tenured owners with low Prop 13 assessed values. If you qualify for portability, keeping that lower assessed value when you move can save thousands each year. On the flip side, inherited properties that are not a principal residence for the heir are likely to be reassessed, which can increase carrying costs.

Downsizing, moving up, or relocating

Prop 19 can make a move within California more feasible for age‑qualified or disabled homeowners. You can downsize to a home that better fits your needs, move closer to family, or even relocate to a different county and still keep a lower assessed value if you file the claim and meet the rules.

How the tax base transfer works

Here is the basic idea behind how your assessed value moves under Prop 19.

Equal or lower price home

If your replacement home’s market value is equal to or less than the market value of the home you sold, you generally transfer your old assessed value to the new home. That means your property tax bill stays roughly similar to what you paid before, subject to normal annual adjustments.

Buying a more expensive home

If your replacement home costs more than the one you sold, your new assessed value will be your transferred assessed value plus the price difference between the two homes.

• Simple example: Your current home’s assessed value is $200,000 and its market value is $300,000. You buy a replacement home with a market value of $800,000. Your new assessed value is $200,000 plus the difference of $500,000, which equals $700,000. This is often much lower than a full market‑value assessment on the new home.

The county assessor will confirm the numbers and apply the calculation. You must file a claim with the assessor in the county where the replacement home is located.

Who qualifies for portability

You may qualify to transfer your assessed value if any of the following apply:

• You are 55 or older.
• You are severely disabled.
• Your home was substantially damaged or destroyed in a qualifying disaster.

You must also meet primary residence rules and file a timely claim with the county assessor. The assessor will request documentation such as proof of age or disability, dates of sale and purchase, and prices.

Step‑by‑step for eligible movers

Follow this simple workflow if you are considering a move within California and think you may qualify:

1. Check eligibility and gather proof.

• Confirm your eligibility category: age 55+, severely disabled, or qualifying disaster victim. Collect supporting documents.

2. Request an estimate from the county assessor.

• Contact the assessor where your replacement home will be located. Share your current assessed value, sale date and price, and the target purchase price to understand how the transfer would work.

3. Run the numbers before you shop.

• Ask the assessor or your tax advisor to walk through the calculation for equal‑or‑lesser value and for higher‑priced replacements. This helps you set a budget and estimate ongoing property taxes.

4. Plan your sale and purchase timeline.

• Coordinate closing dates so you can submit your claim within county filing windows. Keep copies of contracts, settlement statements, and assessor forms handy.

5. File the claim with the county assessor.

• Submit the portability claim form with required documentation. Respond quickly to any follow‑up requests from the assessor.

Planning for family transfers

If you intend to leave property to your children or grandchildren, Prop 19 makes planning more important, especially in Silicon Valley.

• Identify which properties are primary residences versus second homes or rentals.
• Understand that non‑owner‑occupied inherited properties are often reassessed at market value under Prop 19. This can significantly increase the property tax bill.
• If a child plans to live in the inherited home as a primary residence, a limited exclusion may apply, subject to the law’s thresholds and filing rules.
• Consider talking with an estate attorney or tax advisor about options that fit your situation. In some cases, selling a property, structuring lifetime gifts, or other planning tools may help achieve your goals. These are complex decisions that benefit from professional guidance.

Common pitfalls to avoid

• Assuming all parent‑child transfers avoid reassessment. They do not. The exclusion is narrow and often does not apply to second homes or rentals.
• Missing filing deadlines. Many benefits require timely claims and documentation with the county assessor.
• Confusing assessed value transfers with other taxes. Prop 19 affects property tax assessment. It does not change mortgage costs, transfer taxes, or federal capital gains rules.
• Skipping market and financing planning. Portability can lower your property tax, but you should still plan for mortgage affordability, interest rates, and closing costs.

Local next steps in Santa Clara County

Because the assessor administers the rules, it is wise to contact the Santa Clara County Assessor’s Office early for forms, deadlines, and a review of your scenario. If you are buying in another county, contact that county’s assessor as well. Keep your documents organized, including proof of eligibility, settlement statements, and dates of sale and purchase.

If you want help coordinating a move, comparing neighborhoods, or timing your sale and purchase, reach out. With a background in mortgage and income‑tax matters, we can help you plan with both your lifestyle and your numbers in mind. If you are preparing for family transfers, we can also connect you with local estate and tax professionals.

Ready to map out your options under Prop 19 or discuss timing and strategy for a sale and purchase in Silicon Valley? Schedule a Consultation with Amy Le to get a clear plan tailored to your goals.

FAQs

How does Prop 19 help a Los Gatos homeowner who is 55 or older?

• If you qualify and file a claim, you can transfer your assessed value to a replacement primary residence anywhere in California, which can keep your property taxes lower than a full market‑value assessment.

What happens if I buy a more expensive replacement home under Prop 19?

• Your new assessed value is your transferred assessed value plus the difference in price between the new home and the old home, which can still be lower than a full market‑value assessment.

Can I transfer my tax base more than once under Prop 19?

• Prop 19 expanded the number of allowed transfers for eligible owners compared to prior law; check with the county assessor for the number and documentation required in your situation.

Do Prop 19 inheritance rules let my child keep my low tax base on a rental?

• Generally no; most transfers of second homes and rental properties to children are reassessed at market value unless the property becomes the child’s principal residence and the transfer meets the narrow exclusion rules.

Who calculates my new assessed value when I move under Prop 19?

• The county assessor where your replacement home is located reviews your claim and applies the calculation based on the sale and purchase details you provide.