If you've owned your Orinda home for decades, the thought of downsizing may sound appealing. But what happens to your property taxes when you sell?
I hear this question often from longtime homeowners. Maybe the kids have moved out, the yard feels like more work than it used to, or you're simply ready for a home that better fits your lifestyle today. But there's one thing that makes moving difficult: giving up the low property taxes you've enjoyed for years. The good news? If you're 55 or older, California's Proposition 19 could make your next move much more affordable. And surprisingly, many homeowners I speak with still don't realize how much this law can benefit them.
Here's what you should know.
Why Longtime Orinda Homeowners Hesitate to Sell
One of the biggest financial advantages of owning a home in California for a long time is Proposition 13. Under Prop 13, your home's assessed value generally increases by no more than 2% annually, regardless of how much its market value appreciates. For homeowners who purchased in Orinda 20 or 30 years ago, that can mean paying property taxes based on a value significantly lower than what the home would sell for today. Combine that with the historically low mortgage rates many homeowners secured when refinancing, and it's easy to understand why people are reluctant to move.
I've had conversations with homeowners who would love something smaller, easier to maintain, or closer to family, but don't want the financial consequences of starting over. That's where Proposition 19 can make a meaningful difference.
What Is Proposition 19?
California voters approved Proposition 19 in 2020, and its property tax transfer provisions took effect in April 2021. Essentially, Prop 19 allows eligible homeowners age 55 and older to transfer their existing property tax base to a new primary residence anywhere in California.
Before this law, property tax transfers were much more restrictive. Now, eligible homeowners can:
- Move anywhere within California, regardless of county.
- Purchase a more expensive home and still receive a tax benefit.
- Transfer their property tax base up to three times in a lifetime.
The benefit is also available under separate eligibility rules to certain severely disabled homeowners and victims of wildfires or other qualifying natural disasters. For homeowners who have built substantial equity in Orinda, this creates opportunities that simply weren't available before.
Who Qualifies for Proposition 19?
To qualify for an age-based property tax transfer, you generally must:
- Be at least 55 years old when your existing home sells.
- Own the original home and use it as your primary residence under the applicable rules.
- Purchase or newly construct a replacement primary residence within two years before or after selling your existing home.
- Own and occupy the replacement property as your primary residence when filing your claim.
For married couples, only one spouse needs to meet the age requirement, provided that spouse meets the ownership and other eligibility requirements. Each qualifying individual may use the age- or disability-based transfer up to three times.
One important detail: the two-year timeline is strict. This is why it's worth understanding the rules before deciding when to sell or purchase.
How Much Could You Actually Save?
Let's look at a realistic example for an Orinda homeowner. Imagine you've owned your home for 30 years. Today, it's worth $2.3 million, but its assessed value for property taxes is only $600,000. You're ready to simplify and purchase a smaller, single-level home for $1.6 million. Without Proposition 19, your new home's assessed value would generally reset to its $1.6 million purchase price. With Proposition 19, assuming you qualify, you could transfer your approximately $600,000 taxable value to the new home.
Here's how that compares:
Without Prop 19 | With Prop 19 | |
New home purchase price | $1,600,000 | $1,600,000 |
Property tax assessed value | $1,600,000 | $600,000 |
Approximate annual base property tax (1%) | $16,000 | $6,000 |
Estimated annual savings | $10,000 |
That's approximately $10,000 in annual savings, before accounting for local assessments, bonds, or other applicable charges. Over ten years, that could represent roughly $100,000 in savings compared with the same home's initial full-market-value assessment, before future assessment increases. For many homeowners, that changes the conversation considerably.
What if Your Next Home Costs More?
Here's another benefit that often surprises people: you don't have to downsize to use Proposition 19. You can purchase a more expensive replacement home and still benefit from transferring your existing property tax base. If your replacement property exceeds the applicable value threshold, only the excess value is added to your transferred taxable value.
Those thresholds depend on when you purchase:
- Buy before selling: Up to 100% of your original home's market value.
- Buy within one year after selling: Up to 105%.
- Buy within the second year after selling: Up to 110%.
If your replacement home costs more than the applicable threshold, you may still qualify for meaningful savings. Keep in mind that buying before selling can also mean paying taxes on the replacement home's full assessed value until your original home sells. The timing and numbers matter, which is why I always recommend evaluating both sides of the move before making a decision.
Where Are Orinda Homeowners Downsizing?
One of the challenges with downsizing in Orinda is that there aren't many smaller, low-maintenance housing options. Our community is primarily made up of single-family homes, and single-level properties are especially desirable. For homeowners who want to simplify without giving up the lifestyle they love, there are several options worth considering.
Staying in Orinda: A smaller ranch-style home or single-level property can offer a more manageable layout while keeping you close to friends, familiar neighborhoods, and the community you've built over the years.
Lafayette or Moraga: Both offer opportunities to stay in Lamorinda, with different home styles, locations, and maintenance considerations.
Walnut Creek or Rossmoor: For those looking for less upkeep, condominium and townhome living can be appealing. Rossmoor also offers an established 55+ community with recreational amenities and an active social environment.
Having lived in Walnut Creek for years before making Orinda home, I know both communities well. And what I've found is that the right move isn't necessarily about finding a smaller house. It's about finding a home that fits the way you want to live now. For some people, that means staying close to everything they love about Orinda. For others, it's being closer to children and grandchildren, whether that's in Sonoma, Carmel, San Diego, or somewhere else in California. Proposition 19 gives eligible homeowners more flexibility to make that choice.
What Should You Consider Before Selling?
If you're thinking about making a move, there are a few things I'd encourage you to do before putting your home on the market.
1. Understand your current property tax assessment.
Your property tax bill or the Contra Costa County Assessor's Office can help you determine your existing assessed value. This is an important starting point when estimating potential savings.
2. Decide whether buying or selling first makes more sense.
Both approaches have advantages, depending on your finances, timeline, and comfort level. Because Proposition 19 treats the timing of your purchase differently, it's worth mapping out a strategy early.
I've also written about [how to buy and sell a home at the same time], including some of the options available when coordinating two transactions.
3. Talk with your CPA about potential capital gains taxes.
Proposition 19 helps with property taxes on your next home, but it doesn't eliminate capital gains taxes on the sale of your current one. Eligible homeowners may exclude up to $250,000 in gains, or up to $500,000 for qualifying married couples filing jointly, under federal tax rules. For longtime Orinda homeowners with significant appreciation, understanding the potential tax implications is especially important.
4. Understand the filing requirements.
Homeowners age 55 and older generally use Form BOE-19-B to request their property tax base transfer. The claim should be filed with the county assessor where the replacement home is located, typically within three years of purchasing or completing construction of the new residence. Late claims may qualify for prospective rather than retroactive relief.
5. Have a clear plan for preparing and selling your home.
After decades of ownership, your home may need some thoughtful preparation before going on the market. That doesn't necessarily mean a major renovation. Sometimes strategic updates, professional presentation, and the right pricing approach can make a significant difference in your results. The goal is to maximize the equity you've built while making your transition as smooth as possible.
Your Next Chapter Should Be About Possibilities, Not Property Taxes
I know that selling a longtime family home is rarely just a financial decision. It's the place where you've raised children, celebrated milestones, hosted holidays, and created years of memories. Deciding to leave it can be emotional, even when you're excited about what comes next. But I also believe it's important to know your options. For homeowners who have felt stuck because of property taxes, Proposition 19 may open the door to a move that previously seemed out of reach. And you don't need to be ready to sell tomorrow to start the conversation.
If you're considering downsizing in Orinda, Lafayette, Moraga, or Walnut Creek, I'd be happy to help you explore your options, understand your home's current market value, and develop a plan that makes sense for your next chapter. Sometimes the best first step is simply understanding what's possible.
This article is provided for general educational purposes and does not constitute tax or legal advice. Eligibility and actual tax savings depend on individual circumstances. Consult a qualified tax professional and the appropriate county assessor before making financial decisions.
Christina Linezo, Realtor®
Village Associates
Orinda & San Francisco East Bay Real Estate
CA DRE #01964989
415-425-3085
ChristinaLinezo.com
Rooted in Real Estate. Connected to Community.
Christina Linezo is a Realtor® with Village Associates Real Estate, serving Orinda, Lafayette, Moraga, Walnut Creek, and the surrounding East Bay communities. DRE# 01964989.
