Proposed change in Proposition 13 Tax may help the over 55 year crowd!

A California Association of Realtors supported bill may help those over 55 hyears old move home. Currently where one member of a household is 55 or over and who want to sell their house and buy another, perhaps a single level home for example, they can transfer their current tax basis as long as


a/ They stay within the same county and

b/ The replacement property is the same price or less expensive.

This is difficult to achieve in this tight market. A new bill proposes that the new home can be a higher price and that the transferor still carry over their lower tax basis along with paying the difference. IE If the seller sells for $1, Million and purchases a home for $1.1 Million, the original lower tax basis is carried over plus the difference in price, in this case the difference is $100,000

and with property tax @ 1.25% = $1250/yr or $104/mth additional. The idea is that this would allow those trapped in their older larger homes due to adhering to proposition 13 tax basis to move to a smaller  newer home and free up badly needed housing inventory. Curiously this bill is opposed by many county officials who mistakingly believe tax revenue would fall. Tax revenue would in fact rise because buyers of the transferred property would be paying today's rate.

What is your opinion?