Thinking about moving but worried your property taxes will spike? In Palo Alto, where home values are high, that concern is very real. The good news is that California’s Prop 19 can let you transfer your current property tax base to a new primary home, which can mean major savings. In this guide, you’ll learn who qualifies, how the math works, what it looks like with Palo Alto price points, and the steps to file in Santa Clara County. Let’s dive in.
What Prop 19 changed
Prop 19 expanded the ability for eligible homeowners to transfer their base-year assessed value to a replacement primary residence anywhere in California. This is often called “porting” your property tax assessment.
It matters in Palo Alto because a move without portability can trigger reassessment to full market value. That can create a large and permanent tax increase. Prop 19 also narrowed the parent-child transfer exclusion, which now has stricter conditions.
County assessors administer the process. For Palo Alto properties, the Santa Clara County Assessor reviews claims, forms, and timelines.
Who qualifies and how often
You may qualify to transfer your tax base if you are in one of these groups:
- Age 55 or older
- Severely and permanently disabled
- Your home was involuntarily destroyed or substantially damaged in a wildfire or other declared disaster
Prop 19 applies to your principal residence only. Eligible homeowners 55+ or disabled may generally transfer up to three times in their lifetime. Disaster-related transfers can have special provisions. Always confirm details with the county assessor.
Timing and location rules
You can buy your replacement home anywhere in California. It must be your new primary residence.
Timing matters. You generally need to purchase or newly construct the replacement home within two years before or after selling your original primary residence. If you plan to buy first and sell later, speak with the Santa Clara County Assessor about documentation that supports eligibility within the window.
How the new taxable value is calculated
Prop 19 moves your original taxable value to the replacement home. If the replacement home’s market value is the same or lower than your original home’s market value, your low base carries over fully.
If the replacement home’s market value is higher, the difference is added to your original taxable value. Here is the simple rule of thumb:
- Replacement value less than or equal to original market value: new assessed value equals your original assessed value.
- Replacement value higher than original market value: new assessed value equals your original assessed value plus the difference between the two market values.
This new assessed value becomes your starting point going forward. Annual increases then follow Prop 13 limits, typically up to 2 percent per year, plus any parcel taxes or assessments.
Palo Alto examples with numbers
Below are hypothetical examples to show how portability can impact taxes in a high-value market like Palo Alto. These use an approximate 1.1 percent total tax rate for simple math. Check your property tax bill for the actual effective rate and any local charges.
Example A — Move-up purchase
- Original home: market value 2,500,000; assessed value 500,000.
- Replacement home: market value 3,500,000.
- Difference: 1,000,000 added to the 500,000 assessed value. New assessed value 1,500,000.
- Estimated tax with porting: about 16,500 per year. If fully reassessed to market, about 38,500. Approximate first-year savings 22,000.
Example B — Downsizing
- Original home: market value 3,000,000; assessed value 600,000.
- Replacement home: market value 1,800,000.
- Replacement value is lower. New assessed value stays 600,000.
- Estimated tax with porting: about 6,600 per year. If reassessed to 1,800,000, about 19,800. Approximate savings 13,200.
Example C — Smaller price increase
- Original home: market value 2,200,000; assessed value 450,000.
- Replacement home: market value 2,600,000.
- Difference: 400,000 added to 450,000. New assessed value 850,000.
- Estimated tax with porting: about 9,350 per year. If fully reassessed to market, about 28,600. Approximate savings 19,250.
Key point: Portability can protect a low base-year value earned over years of ownership. Even when you move to a higher-priced home, the adjusted base is often far lower than a full market reassessment.
How to file in Santa Clara County
Use this checklist to keep your transfer on track:
- Confirm eligibility. Make sure you are 55 or older, severely and permanently disabled, or a disaster victim, and that the original property is your principal residence.
- Confirm timing. Track the purchase and sale dates to fit within the two-year window around your sale. Save all closing statements.
- Contact the Santa Clara County Assessor early. Request the claim form for transfer of base-year value and ask about required supporting documents and filing deadlines.
- Gather documents. Typical items include deeds, closing statements, proof of age or disability, and any other records the county requests.
- File your claim by the deadline. The assessor will review your submission and issue a determination. If approved, the new assessed value will be recorded on your replacement home.
Tip: Portability is not automatic. File the claim and follow up until you receive a formal decision.
Practical planning tips
- Start with the math. Estimate your potential new assessed value using the Prop 19 formula and your likely purchase price. This helps you budget with confidence.
- Plan the sequence. Buying first and selling later can still qualify if you meet the two-year window. Discuss proof of dates with the assessor.
- Keep a clean paper trail. Store all contracts, closing statements, and IDs in one folder. Incomplete documentation can slow approval.
- Watch local charges. Parcel taxes and special assessments can still apply, even when you transfer your Prop 13 base.
Special cases to know
Parent-child and grandparent-grandchild transfers
Prop 19 narrowed the parent-child exclusion. To qualify now, the transferred home generally must become the child’s principal residence. A value cap applies to the exclusion, and investment properties are usually reassessed. Because rules are complex, speak with the county and your tax advisor before structuring a family transfer.
Transfers between spouses or upon death
Transfers between spouses and registered domestic partners are still excluded from reassessment under existing laws. Inherited property rules can be affected by Prop 19, and surviving spouse provisions may apply in some cases. Consult legal and tax professionals for estate planning steps and any filings needed with the assessor.
Multiple parcels and mixed use
If the property involves multiple parcels, an accessory unit, or mixed residential and commercial use, the calculation can be more complex. The assessor will determine how the transfer applies. Ask for guidance before you file.
Condos vs. single-family homes
Prop 19 applies to principal residences across home types. The same base-year transfer rules can apply whether you buy a condo or a single-family home, subject to standard eligibility and timing requirements.
Common mistakes to avoid
- Waiting too long to contact the assessor or missing the filing deadline.
- Assuming the assessment will transfer automatically without a claim.
- Losing track of dates that prove you are within the two-year window.
- Misunderstanding the value comparison. The formula compares market values at the time of transfer, not your original purchase price from years ago.
A simple move plan for Palo Alto sellers and buyers
- Set your target purchase price and estimate the new assessed value using the Prop 19 rule.
- Confirm that you qualify and map your two-year window for buying and selling.
- Get your documents ready early so you can file immediately after closing.
- Build in parcel taxes and local charges when comparing total carrying costs.
If you are weighing a move within Palo Alto or across Silicon Valley and want a clear plan for both your search and your tax base transfer, let’s talk. Reach out to Karin Freiman for a calm, step-by-step strategy tailored to your situation.
FAQs
What is Prop 19 for California property taxes?
- Prop 19 lets eligible homeowners transfer the base-year assessed value of their primary residence to a replacement primary residence anywhere in California, within specific rules and timelines.
Who in Palo Alto can transfer a tax base under Prop 19?
- Homeowners who are 55 or older, severely and permanently disabled, or whose homes were destroyed or damaged in a qualifying disaster, provided both homes are primary residences.
How does the two-year timing window work?
- You generally must purchase or construct your replacement home within two years before or after the sale of your original primary residence, with documentation to prove dates.
Can I buy first and sell later and still qualify?
- Yes, if both transactions fall within the two-year window and you meet all rules; speak with the Santa Clara County Assessor about required proof and filing steps.
What happens if my replacement home costs more?
- The difference between the replacement home’s market value and your original home’s market value is added to your original assessed value to create your new assessed value.
How many times can I use Prop 19 portability?
- Homeowners 55+ or disabled can generally transfer up to three times in their lifetime; disaster-related moves have special provisions that you should confirm with the assessor.
Do local parcel taxes change when I transfer my base?
- Your Prop 13 base-year value transfers, but parcel taxes, special assessments, and similar local charges may still apply and should be reviewed on your tax bill.
Does Prop 19 cover condos and single-family homes alike?
- Yes, the rules apply to principal residences across home types, including condos and single-family homes, subject to standard eligibility and timing requirements.
