A little bit about Prop 19

This year, voters in California passed Prop 19, which potentially can changes the financials in a positive way of your next home sale or purchase. The proposition will go into effect in mid-February of 2021, so below is a summary of details. Some things the legislature will still have to interpret some of the language.

Inherited Properties

All reassessment exemptions for inherited properties only apply if the property is used as a primary residence by the child (or sometimes grandchild) or used as a family farm. In cases in which the current market value of an inherited property exceeds the parent’s taxable value by more than $1M, the child’s taxable value will be assessed at the current market value and reduced by $1M. The State Board of Equalization will adjust the $1M amount of inflation beginning February 16, 2023, and every two years thereafter.

Transfers

As of April 1, 2021, previous restrictions based on location will be removed, allowing eligible (meaning people over age 55, victims of wildfires or other natural disasters (and the severely disabled) homeowners to do a few things. First, they can utilize the transfer multiple times; they can transfer the taxable value of a property up to three times in their lifetime. Natural disaster/wildfire victims will be allowed to transfer once. The language around what constitutes a natural disaster still needs to be defined.

This group can also purchase a property of higher value, meaning the tax bill will go up but by a lower amount than for other buyers. And, finally, they can also move anywhere in California by transferring the taxable value of a primary residence anywhere in the state within two years of the sale of the original primary residence.

If you’re interested in the details of Prop 19, here’s a great resource from the California Association of Realtors that might answer all of your questions!

GUEST BLOG – From Finances to Moving: How to Upsize in Retirement

By Bob Shannon

A lot of seniors think they have to downsize in order to live comfortably in retirement. But this isn’t always the case. If you plan on having your kids and grandkids visit or take up homesteading, a smaller home simply won’t do, and you’re going to need wide-open spaces to make those golden-year dreams come true. These upsizing tips can walk you through the process from start to finish with less stress and hassle.

Budgeting for a Bigger Home in Retirement

As with any major purchase, you need to think about your budget and finances first before you decide to buy a bigger home. If you have a sizable amount of debt, you will want to start by coming up with a feasible plan to pay it down or completely off. In many states, consumers can turn to debt relief agencies for help coming up with this plan. You’ll need to factor in your amount of debt, employment situation, and ability to make payments to figure out which solution is right.

Once you have your debts paid down, you should have an easier time qualifying for home loans. You’ll also want to determine how much home you can afford before you begin submitting those applications. While this may seem like a daunting task, there are plenty of tools available online that make it simple, including calculators and worksheets.

Finally, you will want to figure out how much you will get from the sale of your current home. You can reach out to an experienced local real estate agent for a CMA (Comparative Market Analysis), but you also need to factor in any needed repairs into your estimated profit. For example, if your windows are cracked, repairing them could cost you anywhere from $170 to
$375. However, repaired windows can add curb appeal to your home, making it a worthwhile expense.

Finding Enough Room for Retirement

Now that you’re done with your finances, you can start looking for a home. You can check out local real estate sites or blogs like Walnut Creek Lifestyle for tips on searching and buying, but you may also want to start by hiring the right real estate agent.

A real estate agent can also narrow down home choices to ones that include the features you want most in retirement. For instance, if you plan on homesteading and hosting family members, a larger yard or land may be necessary. Then you will have plenty of space to play with the grandkids or grow your own vegetable garden and raise livestock.

Depending on the sort of hobbies you plan on taking up, you may also want to look for a home that includes a shed or workshop. You can always add one later, so long as you have the extra acreage. Also, make sure the features inside your home will keep you and your loved ones comfortable for years to come. This could mean making sure there’s an extra room that can be turned into a playroom or smart home features that can be used for aging in place.

Planning a Safe and Stress-Free Move

Once the deals are done, you’ll need to plan for a safe and problem-free move. For seniors, this may mean hiring professionals to help you pack and move your belongings. Otherwise, you could end up overdoing it and injuring yourself trying to do it on your own.

You can use an online move planner to figure out when to start hiring pros and when to take care of other essential moving tasks. That way, you won’t forget anything crucial, like changing your address with the post office or using up the food in your fridge.

When you have bigger dreams for retirement, a smaller home simply won’t do. If you do plan on upsizing your home, do make sure you know which steps to take to avoid added stress. Most of all, make sure you find a home that fits you and your plans to help you make the most out of your golden years!

If you want more information on upsizing, downsizing, or Prop 19, contact Kristin Lanham at (925) 899-7123 or kristin@lanham.com.

Prop 19: Vote YES!

I tend to avoid posting anything remotely political on here, but today I have to urge all California voters to consider voting YES on Prop 19! The biggest reason, allow eligible homeowners to transfer their tax assessments anywhere within the state and allow tax assessments to be transferred to a more expensive home with an upward adjustment. This means you don’t have to buy a house less than the one you sell. This could also help our housing shortage, because many seniors may now decide to sell their bigger homes and down size. I realize many may have already voted, for those who have not yet done so, this one is a no brainer.