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California voters have approved a further reduction in property taxes for older homeowners in the state, lowering their tax burden if they move.
The success of Proposition 19 means that those 55 and over will be able to combine the assessed value of their old home with the value of a new, more expensive home they buy, resulting in property tax savings of up to reach thousands of dollars a year.
Under this measure, children who inherit the house from their parents will no longer benefit from a property tax reduction if they intend to keep it as a second home or rent it out.
The election was near. Just over 51% of voters backed Proposition 19 when the Associated Press called the race Wednesday night, when feedback showed the measure had a lead of more than 350,000 votes.
“Voters passed Proposition 19 because it is a win-win solution for California, providing necessary housing and tax relief for the elderly, wildfire victims and generating much-needed income for schools, fire districts, cities and counties face budget shortfalls due to economic impact of COVID-19, ”said Jeanne Radsick, president of the California Assn. real estate agents, who was the main proponent of the measure.
Prior to the passage of Proposition 19, older homeowners had a unique opportunity to retain their existing tax benefits if they moved to a home of equal or lesser value in the same county. They could do the same when they move between Los Angeles and nine other counties. If they did not meet these requirements or if they had moved to a more expensive house, they should have paid the full amount in property taxes.
Now, older homeowners will get a property tax benefit when they buy a more expensive home anywhere in the state – up to three times. Homeowners with disabilities will be able to do the same, and victims of forest fires and other natural disasters will be able to do so after their homes have been damaged.
Proponents of Proposition 19 have argued that the measure would help empty nesters and those who wish to move for health reasons find new homes without facing a big tax cut.
Proposition 19 also restricts an inheritance property tax break that allowed children of owners to keep their parents’ low property assessments. A 2018 Times investigation found that a large number of legacy homes along the coast are used as investment property.
Real estate interests have raised more than $ 39 million to support the adoption of Proposition 19. Realtors are expected to benefit from increased home sales, both from older homeowners who decide. to take advantage of their new tax advantages for relocating and by heirs preferring to sell their parents’ properties rather than paying higher property taxes.
Much of the campaign backed by the estate agent for Proposition 19 focused on the benefits for wildfire victims and increasing funding for wildfire response. But homeowners affected by disaster make up well under 1% of those eligible for tax relief under Proposition 19, according to California Budget and Policy Center analysis, which found that the benefits flowed almost entirely to older homeowners.
And while the measure reserves new tax revenue for wildland fire response, the state’s non-partisan legislative analyst’s office estimates that the vast majority of wildfire funding will not begin until 2025 at the earliest. .
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