California tax rule can reshape the cost of downsizing

A California homeowner who sells a longtime Oakland home and buys a cheaper property inland could face a higher property-tax bill if the replacement home receives a new assessment. A $400,000 factored tax base, for example, could become a $900,000 taxable value after a move, raising the general 1% levy by about $5,000 annually before other assessments.

Proposition 19 allows eligible California homeowners age 55 and older to transfer the factored base-year value of a principal residence to a replacement home anywhere in the state, subject to value, timing and residency requirements. The provision can generally be used up to three times, but homeowners must file a claim with the replacement county assessor. The benefit does not apply to moves outside California.

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