AB 1748: Property taxation: base year value transfer.

The California Constitution and existing property tax law authorize a person who is either severely disabled or over 55 years of age to transfer the base year value, as defined, of property that is eligible for the homeowners property tax exemption to a replacement dwelling that is of equal or lesser value located within the same county as the property from which the base year value is transferred, and if a county ordinance so providing has been adopted, to a replacement dwelling that is located in a different county.

This bill, on and after January 1, 2019, would instead require, subject to specified procedures, the base year value of property that is eligible for the homeowners exemption of any person, regardless of age or disability, to be transferred to any replacement dwelling, regardless of the value of the replacement property or whether the replacement property is located within the same county. The bill would prescribe the method of calculating the base year value of a replacement dwelling that is of lesser or greater value than the original property. The bill would deem a replacement dwelling to be of equal or lesser value if the amount of the full cash value of that replacement dwelling does not exceed specified amounts based on the date of the sale of the original property relative to the purchase or new construction of the replacement dwelling.

Existing law provides that a person claiming the property tax relief described above is eligible for that relief only if specified conditions are met, including that the claimant has not previously been granted, as a claimant, that property tax relief, except in the case of a person who becomes severely disabled subsequent to being granted, as a claimant, the property tax relief for a person over the age of 55 years.

This bill, on and after January 1, 2019, would instead only require that a person not have been previously granted the property tax relief described above if that person is not a person over the age of 55 years or a severely and permanently disabled person. The bill would specify that a person over the age of 55 years includes the spouse of a person who has attained the age of 55 years at the time of the sale of the original property.

Existing law defines full cash value of the replacement dwelling for purposes of this transfer of property tax base year value to mean the replacement dwellings full cash value, determined in accordance with a specified provision, as of the date on which the replacement dwelling was purchased or new construction was completed.

This bill would, on and after January 1, 2019, provide that full cash value of the replacement dwelling may also mean, in specified circumstances, the replacement dwellings full cash value, determined in accordance with a specified provision, as of the date on which the original property is sold.

By changing the manner in which local assessors assess property for property taxation purposes, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Existing law requires the state to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation.

This bill would provide that, notwithstanding those provisions, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill.

This bill would take effect immediately as a tax levy, but would become operative only if Assembly Constitutional Amendment ____ 20 of the 201718 Regular Session is approved by the voters.