Downsizing on the Palos Verdes Peninsula usually means doing two transactions at once: selling the home you have lived in for years and buying the one you want next, ideally without moving twice. California's Proposition 19 has made that move more attractive for many longtime owners. If you are 55 or older, you can transfer your current home's taxable value to a replacement home anywhere in California, up to three times, as long as you buy within two years of selling, according to the California State Board of Equalization.
Here is how to plan the sale and the purchase so they work together.
How Prop 19 Works When You Downsize
Rule | What it means for you |
|---|---|
Age | 55 or older when you sell (or any age if severely disabled) |
Which homes | Your current principal residence to a replacement principal residence |
Where | Anywhere in California, not just on the Peninsula |
How often | Up to three times |
Timing | Buy or build the replacement within two years of selling |
If the new home costs more | You keep your current taxable value, and the difference in market value is added to it |
For a Peninsula owner who bought decades ago, that can mean keeping a very low property tax base even on a home of similar value. Confirm your numbers with your CPA and the Los Angeles County Assessor before you commit.
Plan the Sale and Purchase as One Move
Use the same escrow company if you can
When the sale and the purchase happen at the same time, I recommend using the same escrow company for both whenever possible. One team managing both timelines makes the transition smoother and reduces the chance of delays on either side.
Negotiate a rent-back up front
A rent-back lets you stay in the home you sold for a period after closing, so you are not forced out before the new home is ready. The best time to negotiate it is up front, in the original offer, and ideally at no cost to you as the seller.
Use the repair request as leverage
If you did not get a rent-back up front, there is still a second chance. When the buyer submits a request for repairs, that is a natural point to negotiate. Flexibility on repairs can be traded for the rent-back you need.
Prepare the Home You Are Selling
Longtime family homes often need a refresh before they sell. The order I recommend:
- Paint the interior. Paint does more for a home than almost anything else at its cost.
- Fix the small things you have learned to live with: burned-out bulbs, a broken cabinet hinge, a cracked mirror or window.
- Update where it pays: counters, faucets and hardware, vanities, and replacing carpet with engineered wood or LVP.
- Stage it once you move out. Staging usually pays for itself in the final price.
No budget for the work? Many contractors will be paid at close of escrow, and there are no-cost and low-cost programs that fund pre-sale improvements.
Where Downsizers Look on the Peninsula
In my experience, Palos Verdes Estates as a whole has the most single-family homes on the Peninsula, a result of when the city was built and the home styles of that era. Buyers who want to stay on the hill but spend less often look at Miraleste on the east side of Rancho Palos Verdes, where money goes further, or at Los Verdes, which sits centrally and offers one- and two-story homes, many under 3,000 square feet. Read more in my Rancho Palos Verdes guide and Palos Verdes Estates guide.
Questions
Can I keep my low property taxes if I downsize in California?
Yes, if you are 55 or older. Under Proposition 19, you can transfer your home's taxable value to a replacement home anywhere in California up to three times, as long as you buy within two years of selling. If the new home is worth more, the difference is added.
How do I avoid moving twice when I sell and buy at the same time?
Negotiate a rent-back so you can stay in your current home after it closes, ideally at no cost and in the original offer. Using one escrow company for both transactions also keeps the timelines aligned.
Can I negotiate a rent-back after I have accepted an offer?
Yes. The buyer's request for repairs is a natural point in the transaction to negotiate one.
This article is general information, not tax advice. Confirm your Prop 19 eligibility with your CPA and the county assessor.
Planning to downsize on the Peninsula? Before you buy or sell, get the intel. Call me at 310-592-1243 or request a home valuation, and I will map out the sale, the purchase and the timing so you only move once.
