States throughout the USA take a variety of approaches to taxation. Some rely heavily on state income tax, others on sales taxes, and many have a strong reliance on property taxes. In California, property taxes primarily go to counties and cities rather than the state (the state gets most of their tax revenue from personal income taxes, sales tax, corporate taxes, etc.) Property tax revenue in California largely goes to the public school system, but also helps fund public safety programs. While there are plenty of complaints about California’s taxes, one issue closely tied to real estate involves property taxes. Specifically, homeowners becoming locked into one home to help preserve their low tax basis. Proposition 19 passed in late 2020 and promises to shake up property taxes as we know them in California. In this article, I will cover the basics of property taxes in California, as well as some of the major features of Proposition 19 (and a couple of the propositions it is replacing). If you are considering selling a home and buying a replacement home in California, you will definitely want to read on to see how Prop 19 might potentially benefit you.
