Downsizing? If you are making a change to a smaller primary home that is located in the same county in which you currently live, then there may be a significant tax advantage for you.
California voters passed Proposition 60 in 1986 to provide qualified homeowners with a one-time tax break for those longtime California homeowners who want to downsize to a smaller home but don’t want to give up the low property-tax assessment they may have in their existing home. Although we have seen a decline in property values, many longtime homeowners would face a big property-tax increase, even if they are buying a smaller home.
Under California Proposition 13, homes are reassessed for property-tax purposes when there is a change in ownership or new construction. And in between ownership changes, the assessed value can go up by at a rate not to exceed 2 percent a year. (Homeowners can get temporary reductions when property values go down.)
Besides being for homeowners 55 and older, there are some other eligibility requirements so be sure your situation applies before you consider this option. And always check with a tax specialist for information and guidance on your particular situation.