Exclusions for Victims of Wildfire or Natural Disaster

Prop 19 Claim for Transfer of Base Year Value to Replacement Primary Residence for Victims of Wildfire or Other Natural Disaster.

On November 3, 2020, California voters approved Proposition 19, which added section 2.1 to article XIII A, to allow, as relevant here, an owner of a primary residence who is a victim of a wildfire or natural disaster to transfer the taxable value of their original primary residence to a replacement primary residence that is purchased or newly constructed as that person's principal residence within two years of the sale of the original primary residence. Proposition 19 became operative as of April 1, 2021.

The specific requirements of section 2.1 (b) include:

  • The wildfire or natural disaster must result in a Governor-proclaimed state of emergency.
  • The original primary residence improvements must have sustained physical damage amounting to more than 50 percent of its full cash value immediately prior to the wildfire or natural disaster.
  • The damaged or destroyed property must have been the principal place of residence of the claimant as of the date that property was substantially damaged or destroyed.
  • The original primary residence must be sold in its damaged state.
  • The replacement primary residence must be purchased or newly constructed within two years of the sale of the original primary residence.
  • The replacement primary residence may be located anywhere in California.
  • The replacement primary residence must be the principal place of residence of the claimant.
  • A claim for relief must be filed with the Assessor of the county in which the replacement property is located. The claim must be filed within three years of the purchase or new construction of the replacement property to receive relief as of the latest qualifying transaction. If this period is missed, prospective relief is available for the lien date of the assessment year in which the claim is filed.

The purchase of the replacement primary residence must occur within two years of the sale of the original primary residence in its damaged state. The date of the misfortune or calamity does not have to occur within two years of the date of sale or the date of purchase. For example, if a principal residence was destroyed in 2017 and the vacant lot sold in 2021, the property owner would have two years from the 2021 sale date to purchase a qualifying replacement primary residence.

For property that has been damaged or destroyed, the base year value that is transferred is the adjusted base year value immediately prior to the date of damage or destruction of the original primary residence, plus any inflation factoring for the period between the destruction and the purchase of the replacement primary residence. The date the base year value is transferred is the date of the latest qualifying transaction—the sale of the original primary residence, the purchase of the replacement primary residence, or the completion of new construction of a new replacement primary residence.

If the replacement property’s market value is greater than the original property’s market value, then the amount above the “equal or lesser value” of the original property’s market value is added to the transferred factored base year value.

To file a claim for Base Year Value Transfers for Governor-Proclaimed disasters, occurring on or after April 1, 2021, please complete and submit the form by utilizing the link below:

https://taxpayer.justappraised.com/dashboard/form/FORM_19_V

Additional information can be found by visiting the State Board of Equalization’s website at www.boe.ca.gov.