A Legal Perspective: Discussing Prop 19 with the McDowall Cotter Team

During this week’s Realtor Roundtable meeting, we met with Attorneys Bob Vale and Roxanne Jen with the firm, McDowall Cotter, to get a legal perspective on California’s new Proposition 19, which will begin to take effect February 4th (further changes rolled out April 1st).  They provided our team with great insight into how to apply these new rules in various different homeownership/transfer scenarios, and what to expect as these changes are implemented.

As a reminder – Prop 19 will make major changes to how your property tax basis can be transferred to family members and carried to new properties.  Starting February 4th, property that is passed down to children from parents will be subject to reassessment.  This change will be particularly impactful here in the Bay Area, where skyrocketing home values have created huge disparities between tax assessments and current market values.

Also, starting April 1st, qualifying homeowners (aged 55 or over, physically disabled, or a natural disaster victim) will be able to transfer their current property tax basis to new property of equal or lesser value anywhere in the state up to THREE times within their lifetime.  They will also be able to transfer the basis to property of greater value, with a partial reassessment for the difference in value.  

If you have questions about how Prop 19 will affect you and your family, and would like to ask a legal expert, we will be hosting a free webinar with the McDowall Cotter Prop 19 Solutions Team on February 4th @ 5:30pm.  Attendees will get an overview of the new rules taking effect, and the opportunity to have any questions answered by a legal expert.  

To register for this free event, go to www.realsmartproperties.com/Prop19

A big thank you to Bob Vale, Roxanne Jen and the McDowall Cotter Team for sharing your time and insights. 

California’s Prop 19: What You Need to Know

California’s Proposition 19 passed by a slim 2% margin in the November election (51%-49%), and it will officially take effect on February 16th. The measure will amend current legislation establishing rules for how property owners can carry and pass on their property tax basis. If you own property in California, it is important you understand these changes, and how they will affect you and your family. Here’s a quick rundown of what will be changing come February 16th:

LIFE BEFORE PROP 19 (Current Laws)

• Property tax increases limited to 2% annually unless reassessed due to sale or other transfer. As a result, most homes in California are taxed at a basis much lower than their actual current market value.

• Property owners have the ability to transfer property to their children and grandchildren while maintaining the low property tax basis. This applies to their personal residence (regardless of value or who will live there) plus $1 million in additional property. The new property owner would then be subject to the 2% annual tax increase.

• Qualified homeowners (aged 55 or over, physically disabled, or a natural disaster victim) have the ability to move to a participating in-state county ONCE, and carry the assessed value of their property with them, provided they are moving into a home of lesser value.

LIFE AFTER PROP 19 (Beginning 2/16)

Once Prop 19 takes effect on February 16th, it will make some key changes to the rules described above:

• Starting Feb. 16th, all real estate will be reassessed at death, with the exception of a primary residence worth less than $1 million that a child actually moves into (if worth over $1M the balance is reas- sessed). So now instead of children/grandchildren inheriting property at the lower tax basis (subject to 2% annual increase), the tax will be reassessed based on the home’s current market value.

• Qualifying homeowners (over 55 years of age, physically disabled or natural disaster victims) will now be able to sell and move into a home any- where within the state up to THREE times while still carrying their old property tax assessment.

• This assessment can now be carried to properties of greater value (with an upward adjustment).

It’s worth noting that all the way up until February 16th, you can still transfer property to your children or grandchildren without facing reassessment to current market value. Of course, there are other factors to consider when transferring property to a family member (i.e. gift tax). If you have any questions about how Prop 19 will affect you, I’ll be hosting a webinar on February 4th – save the date!

A First Look at 30 Avondale Ave, RWC

The RealSmart Team is proud to present 30 Avondale Avenue, located in Redwood City’s Edgewood Park neighborhood. This custom-built new construction home is brimming with eye-catching architectural details and designer finishes, a hallmark of this distinguished local home builder. The luxurious living space consists of a massive great room, gourmet chef’s kitchen, a stunning dining room and floor-to-ceiling folding glass doors opening up to an expansive private patio with built-in firepit, where many a fireside chat and summertime siesta are sure to be enjoyed.

Of course, a custom-home of this caliber would not be complete without an impressive master suite… and 30 Avondale delivers. The room is beautifully open and airy with a generously sized walk-in closet, and the bathroom is complete with an elegant soaking tub, spacious glass shower enclosure, and stylish his and her vanities. 

The list of premium features is far too long to house in this newsletter.  If you’d like to learn more about this home, or would like to schedule a private showing, call Bryan directly at (650) 642-8915.

OFFERED AT $3,200,000

VIDEO TOUR: 

From Our Zoom Meeting to Yours: Happy Holidays!

In the spirit of 2020, we decided it best to incorporate our team Zoom meetings into our holiday card this year.  This is how the RealSmart team got together for most of the year, and while it isn’t ideal, we’re happy to have the technology to still be able to collaborate in a productive and safe manner.  So from our Zoom meeting to yours, happy holidays!  Enjoy the full card below:

Walking Tour: 646 Ehrhorn and Downtown Mountain View

646 Ehrhorn Avenue, just a couple blocks from Castro Street and Downtown Mountain View, is slated to finish construction in the next 30-45 days, offering a stunning 4BD/3BA Spanish-style home located just a few blocks from Downtown Mountain View.    In this video, Bryan will take you on a walking tour from the property to some of his favorite spots in Downtown Mountain View.  Enjoy!

How Much Would it Cost to Build a New Home?

Clients often ask us about the cost of specific home improvements. “I want to remodel my bathroom, what would that cost?”, “What about adding a deck, or putting on a new roof?”, “How much would an addition cost? The answers to these questions are never simple, and almost always begin with an “it depends” . The final cost of most home improvement projects depends on a variety of factors, and giving an accurate estimate without getting contractors involved can be a very difficult (and often futile) undertaking. However, there is one area of estimating costs that is getting much easier for RealSmart clients… and it is likely to surprise you.

Q: How much does it cost to build a brand new house in Silicon Valley?

A: Between $400-$435 per square foot to build, from beginning to the very end.

RealSmart has a source that will build a brand new home for our clients for $400-$435 per square foot, including all of the finishes, which you have the option of hand picking yourself with a design team. This new program applies to homeowners who want to build a brand new home on their existing home site, as well as people looking to build somewhere new on a fixer lot. The cost covers everything, from demolition of any existing home and permitting fees, to the entire construction process, all within the price range mentioned above. To put that into perspective, that would equate to $1.2 – $1.3 million to build a brand new 3,000 square foot home from the ground up, custom-built to your tastes and needs.

So how can we be so confident about an estimate to build a brand new home when we just said that doing the same for smaller scale home improvement projects can be tricky? The answer is that we are working with a seasoned regional home builder who has standardized many of the costs associated with building. They have a catalog of many different home designs and styles that have already stood the test of local government scrutiny. This allows them to streamline the permitting and build process, while still leaving ample room for you to customize the finishes to your liking.

This is an innovative program that opens up exciting new opportunities for RealSmart clients. For more information, give us a call: (650)642-8915