California law allows any individual or individuals who reside in an original property (i.e., principal place of residence) to transfer the
base year value of the original property that has been substantially damaged of destroyed by a disaster to a replacement property
(i.e., principal place of residence) of equal or lesser value in another county that has adopted an ordinance allowing such transfers.
The following requirements must be met:
1. the disaster must be a major misfortune or calamity in an area subsequently proclaimed by the Governor to be in a state of
disaster as a result of the misfortune or calamity;
2. the replacement property must have been acquired or newly constructed within three years after the date of the disaster
(including land);
3. a claim for relief must be filed within three years after the replacement property is acquired or newly constructed.
Property is substantially damaged if the land or the improvements sustain physical damage amounting to more than 50 percent of
its full cash value immediately prior to the disaster.
In general, “equal or lesser value” means the fair market value of a replacement property on the date of purchase or completion
of construction does not exceed:
1. 105 percent of full cash value or fair market value of the original property immediately prior to the date of disaster if a
replacement property is purchased or newly constructed within the first year following the date of the damage or destruction
of the original property;
2. 110 percent of full cash value or fair market value of the original property immediately prior to the date of disaster if a
replacement property is purchased or newly constructed within the second year following the date of the damage or destruction
of the original property; or
3. 115 percent of full cash value or fair market value of the original property immediately prior to the date of disaster if a
replacement property is purchased or newly constructed within the third year following the date of the damage or destruction
of the original property.
TRANSFERS BETWEEN COUNTIES ARE ALLOWED ONLY IF THE COUNTY IN WHICH THE REPLACEMENT PROPERTY IS
LOCATED HAS PASSED AN AUTHORIZING ORDINANCE.
The acquisition of an ownership interest in a legal entity that, directly or indirectly, owns real property is not an acquisition of
replacement property under the law.
