PROPOSITION 5 – Property Tax Transfer A “YES” vote supports amending Proposition 13, to allow homebuyers who are age 55 and older or severely disabled to transfer their tax assessments from their previous to new home. A “NO” vote opposes amending Proposition 13 to change how tax assessments are transferred between properties for homebuyers who are 55 and older or severely disabled. What changes would this ballot initiative make to state law? California Proposition 5, the Property Tax Initiative, is new on the ballot in California.
This Property Tax Initiative supports amending Proposition 13 to allow homebuyers who are 55 and older or severely disabled to transfer the tax-assessed value from their previous to new home regardless of the new home’s market value, the new home’s location in the state, or the buyer’s number of moves. If the new home is a different value than the previous home, the initiative would allow for an adjusted value between the first and new values. If the new home has a higher market value then the previous home, the assessed value would be adjusted upward. If the new home has a lower market value than the previous home, the assessed value would be adjusted downward.
The formulas for the adjustments would be as follows: Upward adjustment: (assessed value of their previous home) + [(the new home’s market value) – (the previous home’s market value)] Example: An individual sold her house for $500,000. The house had a tax-assessed value of $75,000. She bought a new house for $800,000. The tax-assessed value of the new house would be ($75,000) + [($800,000)-($500,000)] = $375,000 Downward adjustment: (assessed value of their previous home) × [(the new home’s market value) ÷ (the previous home’s market value)] Example: An individual sold his house for $500,000. The house had a tax-assessed value of $75,000. He bought a new house for $300,000. The tax-assessed value of the new house would be ($75,000) × [($300,000) ÷ ($500,000)] = $45,000
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