How Prop 19 Lets San Diego Seniors Keep Their Low Taxes

Not long ago, a longtime client called us in a tough spot.

Her husband had passed, the family home had grown too big, and she wanted to downsize into a single-story place better suited to this chapter of her life. What was holding her back wasn’t the move itself. It was the fear that selling would send her property taxes soaring to today’s rates, something she simply couldn’t afford on a fixed income.

We shared something good with her that day, and it’s the same news many San Diego homeowners over 55 don’t realize they have: a law called Prop 19.

First, an important note. We’re your real estate team, not tax advisors or attorneys, so treat this as a plain-English overview. For your specific numbers and situation, talk with a qualified CPA or tax advisor, and we’re glad to point you toward great ones we’ve worked with for years.

Here’s the situation we see constantly. You bought your San Diego home decades ago, maybe for a couple hundred thousand or far less, and thanks to Prop 13, your property taxes have stayed low ever since, based on what you paid rather than what the home is worth today. Now the house feels too big, the stairs and the yard work aren’t as fun as they used to be, and downsizing sounds appealing, until you picture your taxes resetting to current rates.

Prop 19 was built to solve exactly that problem for homeowners 55 and older. In many cases, it lets you sell your current home and carry your existing low property tax basis with you to a new one. It answers the fear that keeps so many people stuck in a home that no longer fits.

The rules have improved, and the details matter. You can now transfer that low basis to a replacement home anywhere in California, not just within your county as it once was. Want to be near family in the Bay Area, Los Angeles, or Napa? You can move your tax basis there. You can use this benefit up to three times in your lifetime, and there’s generally a two-year window from the sale to buy or build the replacement. As with everything here, confirm the exact timing for your situation with your CPA.

Here’s the part that catches families off guard: inheritance works differently now. Many parents assume their kids can inherit the home and simply keep the low tax rate the way it used to work. Prop 19 changed that. To keep that low basis, a child generally has to move into the home as their primary residence within one year; even then, only about the first million dollars of value above the original basis is protected, and that figure adjusts over time.

If your kids plan to rent it out or keep it as a second home, that low tax rate will likely disappear, and taxes can jump substantially.

For a longtime San Diego homeowner, getting this right matters. With home values here often reaching into the millions, that low tax basis is a genuinely valuable tool, worth thousands of dollars when handled correctly. The move to make is simple: talk with a qualified CPA who understands this law, confirm how the rules apply to your situation, and then use the benefit you’ve earned.

You can watch the full video above, or feel free to skip to the topics that interest you most using the timestamps below:

00:00 — A Client’s Story
03:19 — What Prop 19 Fixes
03:48 — Transfer Basis Statewide
06:25 — The Inheritance Trap
08:32 — Getting It Right
11:04 — How We Help

If you’re a longtime San Diego homeowner thinking about that next chapter, we’d love to help.

We’ll walk you through your options for selling, connect you with a trusted tax advisor to run your specific numbers, and guide you through every step so the move feels manageable rather than overwhelming. Call or text us at 858-779-0823, email us at info@riederhomes.com, or visit riederhomes.com. We look forward to serving you here in beautiful San Diego.