learndownsizing at 55+prop 19, taxes, timing
Downsizing at 55+, with your tax base
Prop 19 lets owners 55 and older take their property tax base to a replacement home anywhere in California. Here’s how the tax base, the home-sale exclusion and the two-year window fit together, with a calculator for each.
Tax base calculatorSale gainDate plannerThe move plan
- age on the sale date55+one owner is enough
- replacement window2 yearsbefore or after the sale
- value test100 / 105 / 110%of the old home’s sale price
- transfers allowed3per person, anywhere in California
the rules
Four rules that shape the move
From the state Board of Equalization, the IRS and HUD, checked October 16, 2026.
prop 19owners 55 and older
Take your tax base with you
Sell your home and buy or build a replacement anywhere in California within two years before or after the sale.
- You (or a spouse who owns both homes) must be 55 or older on the day the old home sells
- Both homes must be your principal residence
- Up to 100% of the sale price if you buy first, 105% in the first year after, 110% in the second; above that, only the difference is added
- Each person can use it 3 times
home-sale exclusionfederal income tax
$250,000 or $500,000 of gain, tax-free
The gain on a main home can be excluded if you owned and lived in it for at least 2 of the 5 years before the sale.
- $500,000 on a joint return; either spouse can meet the ownership test, both must meet the use test
- Usable once every 2 years
- Long-held Silicon Valley homes can have gains above the exclusion; run the numbers before you list
parent-child transferif the home may go to your children
Only the family home, only if a child moves in
Since February 16, 2021, a child keeps a parent’s tax base only on the family home or a family farm.
- The child must make it their principal residence within 1 year; the state says there are no exceptions
- The excluded amount is your tax base plus $1,044,586 for transfers from February 16, 2025 to February 15, 2027
- Rentals and second homes are reassessed
reverse mortgage for purchasebuyers 62 and older
Buy the next home with a HECM
A federally insured reverse mortgage can be used to buy a new principal residence, with cash covering the rest of the price and closing costs.
- Counseling with a HUD-approved counselor is required
- The 2026 national limit is $1,249,125
- Property taxes and homeowners insurance must stay current
tax base calculator
What Prop 19 could save each year
Enter your sale price, your current assessed value and the price of the next home to compare property tax with and without a Prop 19 transfer.
your tax base
sale gain
How much of your gain is covered
For homes bought decades ago, the gain can be larger than the federal exclusion. Get a first look before you list.
gain on the sale
date planner
Your two-year window, on a calendar
Enter the date your current home is expected to close. Add a purchase date for the next home to see which value test applies and when the claim is due.
key dates
good to know
Filing, fees and other programs
- File with the new home’s countyThe Prop 19 claim for owners 55 and older (form BOE-19-B) goes to the assessor where the replacement is, after both sales close and you live there. It isn’t handled in escrow.
- Within 3 years of buyingFile within 3 years of buying or finishing the replacement. Later claims help only from the year you file, with no refund for earlier years.
- Santa Clara County feeSanta Clara County charges a non-refundable $110 processing fee with the claim.
- San Mateo County and San FranciscoSan Mateo County offers the forms by e-signature or PDF; San Francisco accepts claims through its online portal.
- Homeowners’ exemption on the new homeFile form BOE-266 for the $7,000 exemption; file by February 15 for the full exemption that year.
- State property tax postponementOwners 62 and older, blind or disabled, with at least 40% equity and no reverse mortgage may be able to postpone property taxes. Income limits apply and you reapply each year; check the State Controller’s page for the current limit and dates.
Buying first can work well with Prop 19: the 100% test applies, and the new home is taxed at full value only until the old one sells. Ask us to map the timing against your sale.
the plan
The move plan, step by step
- step01
Run the numbers
Know your sale price, your tax base and your gain before you pick the next home.
- Get a current value for your home
- Find your assessed value on the tax bill
- Run the tax base and gain calculators on this page
property nerd tipBring the improvement receipts you have; they raise your basis and can lower the taxable gain. - step02
Define the next home
Write down what the next home must have before you tour.
- Stairs or single level, yard or no yard, HOA or not
- Commute and distance to the people and places you visit most
- A budget that keeps the replacement within the value test, or a clear view of what happens above it
- step03
Choose the order
Buy first, sell first, or close both on the same day.
- Buying first: the 100% test applies, and the new home is taxed at full value until the old one sells
- Selling first: you get the 105% or 110% test, but need a place to live in between
- Same-day closings need tight coordination between both escrows
property nerd tipMap both closing dates in the date planner before you write an offer. - step04
Prepare and sell
Decades in one home usually means repairs and updates worth weighing before you list.
- Compass Concierge can pay up front for prep work such as painting, flooring and staging, with nothing due until closing; fees or interest may apply, and loans come from Notable Finance, not Compass
- Order inspections early so there are no surprises
- Plan the disclosures with us
- step05
Move
Measure the new rooms before deciding what comes along.
- Book movers once both closing dates are firm
- Sort, donate and sell what won’t fit
- Update your mailing address, insurance and utilities
- step06
File the claims
Once you live in the new home, file with that county’s assessor.
- BOE-19-B for the Prop 19 transfer, within 3 years of the purchase
- BOE-266 for the homeowners’ exemption
- Keep the closing statements for both homes for your tax return
sources
Where the rules come from
Checked October 16, 2026.
- California BOE: Proposition 19Base year value transfers, parent-child transfers, worked examples.www.boe.ca.gov/prop19/
- BOE Letter To Assessors 2024/044Base year value transfer rules and FAQs (December 11, 2024).www.boe.ca.gov/proptaxes/pdf/lta24044.pdf
- BOE Letter To Assessors 2026/026Parent-child and grandparent-grandchild transfers (August 3, 2026).www.boe.ca.gov/proptaxes/pdf/lta26026.pdf
- IRS Topic 701: Sale of your homeThe $250,000 / $500,000 exclusion and its tests.www.irs.gov/taxtopics/tc701
- BOE: Homeowners’ exemptionThe $7,000 exemption and filing dates.www.boe.ca.gov/proptaxes/homeowners_exemption.htm
- Santa Clara County Assessor: Age 55+ (Prop 19)Claim filing and the $110 processing fee.asr.santaclaracounty.gov/tax-savings/transferring-your-assessed-value/senior-citizen-over-age-55-outside-county
- San Mateo County Assessor: seniors and severely disabledForms and filing.smcacre.gov/assessor/reappraisal-exclusion-seniors-or-severely-disabled-persons
- San Francisco: transfer your property tax baseFiling through the online portal.www.sf.gov/transfer-your-property-tax-base-replacement-home
- HUD: Home Equity Conversion MortgagesHECM for Purchase and counseling.www.hud.gov/hud-partners/single-family-hecmhome
- HUD: 2026 HECM limit$1,249,125 for 2026.www.hud.gov/news/hud-no-25-145
- State Controller: Property Tax PostponementEligibility, limits and how to apply.www.sco.ca.gov/ardtax_prop_tax_postponement.html
questions
Questions we hear
Do both spouses have to be 55?
No. The state says a spouse who is 55 or older on the sale date and owns both homes can claim, and a younger spouse doesn’t block it.
Can I buy the next home before I sell?
Yes, up to two years before. The 100% value test applies, and the new home is taxed at full value until the old one sells; that gap isn’t refunded.
Can I move to another county?
Yes. Since April 1, 2021, the replacement can be anywhere in California.
What if the next home costs more?
You still benefit. Only the amount above the value test is added to the tax base you bring with you.
Is there a deadline to file?
File within 3 years of buying the replacement. A later claim helps only from the year it’s filed forward.
Can my children keep my tax base if they inherit the house?
Only for the family home, only if a child makes it their principal residence within a year, and only up to your tax base plus $1,044,586 for transfers through February 15, 2027.
more to learn
Keep going
- Prop 19, explainedThe full rules, with examples.
- Buy Before You SellWays to buy first, and what it costs.
- Seller playbookSelling a home, step by step.
- Real estate calculatorsSeller net, transfer tax and Prop 13.
- Market PulsePrices and days on market by city.
- What’s my home worth?A value estimate from the Boyenga Team.
General information, not tax, legal or financial advice. Rules and figures were checked October 16, 2026; confirm your situation with the county assessor and a tax professional.
talk to a property nerd
Planning your next move?
We’ll estimate your sale price, run your Prop 19 numbers and line up the timing of both homes with you. Commissions are negotiable, and we offer bundled services, so ask us what’s included.
