If you’ve been thinking about downsizing, relocating closer to family, or simply finding your next home in California, Proposition 19 could be one of the most important financial tools available to you. Unfortunately, many homeowners either misunderstand how it works—or miss out entirely.
At the Shepherd Real Estate Team, our goal is to help you make confident, informed decisions about every move, including the tax advantages available to you.
What Is Proposition 19?
Proposition 19 is a California property-tax law that took effect in 2021. It allows eligible homeowners—primarily those aged 55 or older, severely disabled, or victims of wildfire/natural disaster—to transfer their existing property-tax base to a new home anywhere in California.
That means you can move without resetting your property taxes to today’s higher values.
How It Works
Under normal circumstances, when you sell your home and buy a new one, your property taxes are recalculated based on your new home’s purchase price. With Prop 19, you can instead carry your current property-tax base with you—potentially saving thousands every year.
Here’s what you should know:
- 🏠 You can transfer your tax base up to three times in your lifetime.
- 📍 You can buy anywhere in California—not just within your county.
- 💲 If your new home costs more than your current one, you’ll pay your old tax amount plus the difference in price.
- 🕒 You must complete the sale and purchase within two years to qualify.
- 👥 Married couples or registered domestic partners can file together as one transfer.
Who Benefits Most
Prop 19 was designed with long-time homeowners in mind—especially those living in high-value markets like Orange County and San Clemente.
If you bought your home decades ago, your property-tax base is likely far below today’s market values. Prop 19 gives you the flexibility to move without losing that advantage—whether that’s downsizing, getting closer to family, or relocating somewhere coastal for a change of pace.
A Quick Example
Let’s say you bought your San Clemente home years ago for $700,000, and it’s now worth $1.5 million. Your current property tax is roughly based on that $700,000 value.
If you sell and buy another home for $1.2 million, Prop 19 lets you transfer your old $700,000 tax base and simply add the $500,000 difference—keeping your new property taxes significantly lower than if you were taxed on the full $1.2 million.
What About Capital Gains?
Prop 19 deals with property taxes, not capital gains. However, the two often overlap when downsizing.
If you’ve lived in your primary residence for at least two of the past five years, you can exclude up to $250,000 in capital gains (single) or $500,000 (married) from federal taxes when you sell.
Combining this exclusion with Prop 19 can make downsizing or relocating a much smoother, more tax-efficient experience.
How to Apply
Applications are handled through your county assessor’s office. You’ll need to file a “Claim for Transfer of Base Year Value” within two years of selling your original home.
For Orange County residents, you can find the form and details here:
🔗 Orange County Assessor — Prop 19 Information & Forms
For official statewide guidance, visit:
🔗 California State Board of Equalization — Proposition 19
Final Thoughts
If you’re 55 or older and considering a move—whether across town or across the state—Prop 19 could make a real difference in your long-term financial picture.
At the Shepherd Real Estate Team, we help homeowners evaluate every angle of their move: from understanding Prop 19 and capital gains, to aligning your next purchase with your financial and lifestyle goals.
If you’d like a personalized breakdown of how Prop 19 might apply to your situation, we’re happy to walk you through the numbers and next steps.
📩 Let’s Connect
Whether you’re planning to downsize, relocate, or just exploring your options, let’s start the conversation.
👉 Schedule a consultation with Darren Shepherd
