Here’s a summary of recent California real estate changes that affect homeowners and their effective dates:
Property Taxes
- Proposition 19: This law, also known as the Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act, took effect on January 1, 2021. It allows homeowners 55 and older, the severely disabled, or victims of natural disasters to transfer their property tax base value to a new home of any value, anywhere in the state.
- Proposition 15: This law, known as the Tax Fairness, Accountability, and Investment Act, took effect on February 1, 2020. It requires commercial and industrial properties to be assessed at their market value, potentially increasing property taxes for some businesses. However, it also provides tax breaks for some residential properties, such as those owned by low-income families.
Wildfires
- Insurance Availability: Several insurance companies have reduced or eliminated coverage in areas with high wildfire risk. This has been an ongoing issue, with some companies making changes as early as 2019.
- Home Mitigation: The state of California has enacted new laws that require homeowners in high-fire-risk areas to take certain mitigation measures, such as clearing brush and installing fire-resistant roofing. These measures can help protect homes from wildfires and reduce insurance costs. These laws have been phasing in since 2019, with the most recent changes taking effect in 2023.
Accessory Dwelling Units (ADUs)
- AB 1033: This law, known as the Accessory Dwelling Unit (ADU) Condominium Conversion Act of 2023, took effect on January 1, 2024. It allows homeowners to sell or otherwise convey ADUs separately from the primary residence. This means that ADUs can now be owned as condominiums, which could make them more affordable and accessible to a wider range of people.
- Local Ordinances: Many California cities and counties have adopted ordinances that make it easier to build and permit ADUs. These ordinances have been implemented at varying times, with some cities adopting them as early as 2019 and others continuing to make changes in 2023.
What’s New?
Before AB 1033, ADUs could only be rented out. Now, cities have the option to allow their sale as independent condominium units. This opens up a plethora of possibilities:
- Increased housing options: Smaller, more affordable condos could boost homeownership, benefiting first-time buyers and those struggling with rising house prices.
- Financial gain for homeowners: Selling an ADU can provide homeowners with a significant financial boost, potentially helping them pay off mortgages or invest in their property.
- Boosting density and affordability: By creating more smaller housing units, AB 1033 could increase housing density in desirable areas while potentially pushing down overall housing costs.
The Road Ahead:
While the potential benefits are exciting, implementation details remain open-ended. Cities have the discretion to develop their own ordinances governing ADU sales, including:
- Zoning restrictions: Which areas will allow ADU sales?
- Development conditions: What size and design limitations will apply?
- Homeowner association (HOA) requirements: Will HOAs be mandatory for ADU condominiums?
The coming months will see various municipalities grappling with these questions, shaping the specific impact of AB 1033 on their communities.
Other Changes
- Solar Power Incentives: The state of California offers a variety of incentives to encourage homeowners to install solar panels. These incentives can help reduce the cost of installing solar power and save homeowners money on their electricity bills. These incentives are updated regularly, with the most recent changes taking effect in 2023.
- Electric Vehicle Charging: The state is also encouraging homeowners to install electric vehicle charging stations. This can help make electric vehicles more practical for Californians. The state provides incentives and rebates for installing EV chargers, with the most recent changes taking effect in 2023.