Are you planning a La Jolla move or settling a family estate and wondering how your property taxes will change? You are not alone. California’s Prop 19 reshaped property tax rules for moves and family transfers, and the details matter a lot in high‑value coastal markets. In this guide, you will learn how portability works for moves, how the family transfer rules apply, and when to bring in tax or estate counsel to protect your benefits. Let’s dive in.
Prop 19 in plain English
Prop 19 took effect for transfers beginning February 16, 2021. It changed two areas of California property tax law that affect many La Jolla owners:
- Portability for eligible homeowners lets you transfer your taxable base value to a replacement home in California, with rules for price differences.
- Intergenerational transfers now focus on the family home and require the child or grandchild to use the home as a principal residence, with a $1,000,000 limit on additional value preserved.
These updates matter in La Jolla because many long‑held coastal homes have low taxable values. The rules determine how much of that value you can keep when you move or transfer property to family.
Base value transfers when you move
If you are 55 or older, severely disabled, or a victim of a qualified disaster, you may be able to carry your existing taxable value to a replacement home anywhere in California. This can lower your property tax bill after you move.
- Statewide portability means you are not limited by county borders.
- For most 55+ and severely disabled owners, current practice commonly references up to three lifetime transfers. Disaster victims may have different allowances.
- You must file a claim with the county assessor and meet timing rules around the sale and purchase or construction of the replacement home.
How the math works
Assessors compare the market value of your original home at the time of sale with the price of the replacement home.
- If your replacement purchase price is less than or equal to the original home’s market value, your taxable value transfers without an upward adjustment.
- If your replacement purchase price is higher, the assessor adds the price difference to your transferred taxable value to set the new taxable value.
In La Jolla, where replacement homes can be significantly more expensive, even a successful portability claim can lead to a higher new taxable value because of that upward adjustment.
San Diego County process
For La Jolla properties, you will work with the San Diego County Assessor. Expect to provide documentation such as deed dates, sale and purchase prices, and proof of eligibility. The county follows State Board of Equalization guidance and posts its own forms and deadlines. Keep copies of everything and submit claims on time.
Family transfers and estates
Prop 19 narrowed the long‑standing exclusions for transfers between parents and children, and in certain cases grandparents and grandchildren. The family home exclusion is still available, but only when the transferee will use the home as a principal residence and only up to a capped amount of additional value.
- If the child or grandchild does not occupy the home as a principal residence, reassessment generally occurs at current market value.
- Vacation homes and rentals are typically reassessed unless they qualify as the family home and the transferee meets the occupancy requirement.
The $1,000,000 cap explained
Prop 19 introduced a limit often described as a $1,000,000 cap on additional value preserved.
Here is how it works in practice:
- Find the parent’s taxable value at the time of transfer and the property’s market value.
- Subtract the taxable value from the market value to find the difference.
- If the difference is less than or equal to $1,000,000, the child can keep the parent’s taxable value.
- If the difference is more than $1,000,000, the child’s taxable value increases by the amount above $1,000,000.
Example for a La Jolla home:
- Parent’s taxable value: $500,000
- Market value at transfer: $3,500,000
- Difference: $3,000,000
- Amount over the $1,000,000 cap: $2,000,000
- Child’s new taxable value: $500,000 + $2,000,000 = $2,500,000
This shows why the cap can lead to significant reassessment in high‑value areas like La Jolla.
Occupancy and timing
The transferee must occupy the property as their principal residence to claim the exclusion. Counties require timely filing and proof of occupancy. If the property passes through probate or a trust, precise timing and documentation are crucial to preserve any exclusion. If the transferee later changes use or sells, normal reassessment rules apply.
Why this matters in La Jolla
La Jolla homes often have a large gap between market value and taxable value. That gap is central to both portability math and the family transfer cap. The larger the gap, the more likely your taxable value will rise after a move or inheritance, even with available exclusions.
Complex ownership structures are also common. Trusts, family partnerships, multiple beneficiaries, and partial interests can change how assessors view transfers and can increase the risk of reassessment if the steps are not planned and documented correctly.
When to involve tax or estate counsel
Bring in qualified tax or estate counsel early if any of these apply:
- You plan to transfer a high‑value family home where market value is far above the taxable value.
- The transferee will not occupy the home as a principal residence.
- You are moving and expect to file a portability claim with tight sale and purchase timelines.
- The property is in or going into a trust, or you are moving assets out of a trust.
- You are dividing interests among multiple beneficiaries or gifting partial interests.
- The estate involves probate, life estates, or step transactions that could be recharacterized by the assessor.
Counsel can help with:
- Early valuation analysis to model outcomes under the $1,000,000 cap and portability rules.
- Drafting or reviewing trust documents to avoid reassessment triggers.
- Coordinating claims with the San Diego County Assessor per State Board of Equalization guidance.
- Aligning property tax decisions with estate, gift, and income tax planning.
Quick checklists
Use these short lists to prepare for a smooth process.
If you are 55+, disabled, or a disaster victim
- Confirm eligibility and identify sale and purchase dates.
- Compare your replacement price to the original home’s market value to estimate any upward adjustment.
- Locate the San Diego County Assessor claim forms and note filing deadlines.
- Gather sale, purchase, and eligibility documents before you file.
If you are inheriting a La Jolla home
- Confirm that the property is the family home and decide if you will occupy it as your principal residence.
- Calculate the market value minus taxable value gap to see if it exceeds $1,000,000.
- File the required claims on time and provide occupancy proof as required by the county.
- If there are multiple beneficiaries or a trust, get counsel involved early.
If a trust or multiple beneficiaries are involved
- Review the trust language and transfer sequence for reassessment risks.
- Clarify who will occupy the home and when.
- Coordinate documentation, deed recording, and claims to meet county standards.
- Consider an informal conversation with the assessor if the facts are complex.
Staying current on guidance
The State Board of Equalization issues examples and FAQs to help assessors and owners apply the rules. San Diego County implements these guidelines and posts local forms and instructions. Because procedures and examples can be updated, check current BOE materials and the county assessor’s latest guidance before you file.
Plan your next La Jolla move
Prop 19 can preserve valuable benefits, but the details determine your outcome. If you are weighing a sale, purchase, or family transfer in La Jolla, you deserve a clear plan, precise timing, and sharp execution. The Morabito Group brings a boutique, high‑touch approach to coastal transactions and a process that keeps you informed and in control from listing to close.
Have questions about your property plans in La Jolla or greater coastal San Diego? Reach out to The Morabito Group for a confidential conversation about your next move.
FAQs
What is Prop 19 portability for La Jolla owners?
- It lets eligible owners who are 55 or older, severely disabled, or disaster victims transfer their taxable base value to a replacement home anywhere in California, subject to timing rules and price‑difference math.
How many times can I transfer my base value after 55?
- Current practice commonly references up to three lifetime transfers for 55+ and severely disabled owners. Disaster‑related transfers may have different allowances based on implementing rules.
How does the family home exclusion work under Prop 19?
- The exclusion applies when a parent transfers the family home and the child uses it as their principal residence. A $1,000,000 cap limits how much additional value above the parent’s taxable value can be preserved.
What if the inherited La Jolla home’s value is far above its taxable value?
- If the market‑to‑taxable value difference exceeds $1,000,000, the child’s taxable value increases by the excess above $1,000,000, which can mean a significant reassessment in high‑value areas.
Do I have to live in the home to keep the parent‑child exclusion?
- Yes. The transferee must use the home as a principal residence and meet county filing and timing requirements, or the property is generally reassessed at current market value.
How do timing and paperwork affect portability claims?
- You must sell and buy or build within specific windows and file a claim with the county assessor. Keep detailed records of sale, purchase, and eligibility to support your claim.
Do trusts or partial interests change the outcome?
- Yes. Transfers into or out of trusts, fractional interests, and multiple beneficiaries can trigger different rules and valuations. In complex cases, involve tax or estate counsel early.
