Downsizing after decades?
Take what you love, leave the rest.

Prop 19: taking your tax base with you

Long-time owners often pay property tax on a value set decades ago. Under Proposition 19, a homeowner who is 55 or older on the day the old house sells can transfer that taxable value to a replacement primary residence anywhere in California. Severely disabled homeowners and victims of a wildfire or natural disaster qualify too, with no age requirement.

The replacement has to be bought or built within two years before or after the sale. If it’s worth more than the home you sold, the difference is added to the value you bring with you, though buying in the first or second year after the sale gives you a 5% or 10% cushion before anything is added. Owners 55 and older and severely disabled owners can each use the transfer up to three times.

To claim it, owners 55 and older file form BOE-19-B (there are separate forms for disability and disasters) with the assessor in the county where the new home is, within three years of buying it. A late claim gets the lower value only from the year it’s filed forward.

The home-sale tax exclusion

Federal law lets a single owner exclude up to $250,000 of gain on a main home, or a married couple filing jointly up to $500,000, after owning and living there two of the five years before the sale. Owners who bought decades ago can have more gain than that. Records of past improvements help, because the cost of a new roof, an addition or a remodeled kitchen is added to your basis, which lowers the taxable gain.

Two rules matter for widowed owners. A surviving spouse who sells within two years of the death and hasn’t remarried can generally still use the $500,000 limit. And in a community property state like California, a house the couple held as community property generally takes a new basis, its value at the death, on both halves. A CPA can tell you what applies.

Decades of belongings

Sorting a lifetime of things is often the hardest part of downsizing, physically and emotionally. It helps to start with what’s coming with you, set a date for family to claim what they want and photograph what you can’t keep. You don’t have to finish the job: take what matters and leave the rest, and we handle the cleanout after closing.

Timing the move

Prop 19’s two-year window runs in both directions, so you can buy first or sell first. Selling first frees up your equity for the next place but can mean moving twice; buying first means carrying two homes for a while. A set closing date makes either easier to plan: as soon as 3 days once title is clear, or later, once your new place is ready.