By Deborah ColeProposition 19 Passes - Tremendous effect on the Real Estate Market in California anticipated.
The passage of Prop 19 on the November 3, 2020 ballot in the State of California is expected to create tens of thousands of home sales in the State. Seniors (55 and over) and a few other groups will be able to sell their current property and purchase a new one in the State and transfer their old property tax basis to their new home freeing up much-needed housing inventory. Many seniors are essentially trapped in a home that no longer meets their needs due to the prohibitive increase in property taxes triggered by a new home purchase.
The site for Yes on Prop 19
sums it up:
Housing Relief for Californians
Providing housing relief for millions of seniors will create record housing opportunities for renters and first-time homeowners throughout the state. As seniors move to retirement communities, seniors housing, condos, and smaller homes near family, Prop 19 will open up tens of thousands of homes that haven’t been on the market for decades, creating opportunities for new buyers and helping to stabilize housing costs so more Californians can afford homeownership.
THE TAKEAWAY: Prospective sellers should consider putting their homes on the market before the potential tsunami of new listings hits after April 1st.* And homebuyers can take heart that much-needed inventory of "starter" and "downsizer" homes should be on the way.
FOR THE DETAILS: click here and for a case study.
* NOTE: Not all details are finalized by the legislature at this writing; notably, while the new law goes into effect April 1, 2021, it's unclear if homes sold before April 1 will be eligible for the transfer of the tax basis to a new property purchased after the law goes into effect. Stay tuned.