How to Stay in Your Home After Retirement in California

California Property Tax Relief You May Not Know About

For a homeowner whose tax bill is the hardest line in the budget, California offers three tools worth knowing.

The homeowners' exemption. This is the most basic relief. The state Board of Equalization explains that the California Constitution provides a $7,000 reduction in taxable value for a qualifying owner-occupied home that was the owner's principal residence on the January 1 lien date. The homeowner claims it with a one-time filing with the county assessor, and a first-time filer must file by February 15 to receive the full exemption for that year. Cal. Rev. & Tax. Code § 218 sets the amount. It generally excludes rented, vacant and second homes. An owner temporarily living in a hospital or care facility can still be treated as occupying the home if the owner intends to return and the conditions in that section are met.

Proposition 19. Since April 1, 2021, Proposition 19 has let eligible homeowners age 55 or older move their assessed value to a replacement home in California (Revenue and Taxation Code section 69.6). Assessed value is the taxable value the county uses to figure the tax bill, and it is often far below what the home would sell for. In plain words, an owner who moves may be able to carry a lower tax base to the new home. Prop 19 replaced the older transfer rules for transfers after its effective date. The county assessor and the Board of Equalization publish the current conditions and filing steps.

Property Tax Postponement. The State Controller's Office runs the Property Tax Postponement program. The program lets seniors, blind homeowners and homeowners with a disability defer current-year property taxes on their principal residence. "Postpone" means the taxes are deferred, not forgiven: a lien on the property secures them, and they must eventually be repaid. When the Controller's page was read in October 2026, it listed an annual household income of $57,002 or less and at least 40 percent equity among its requirements. Cal. Rev. & Tax. Code § 20583 states that 40 percent equity test and requires it to be met each time a claim is filed.

The Controller's fact sheet adds several points:

• Age, blindness or disability. An applicant must be at least 62, or blind, or disabled.
• No reverse mortgage. The property cannot have one. Refinancing or taking out a reverse mortgage is also listed among the events that affect a postponement.
• Interest. Postponed taxes carry 5 percent simple interest per year until repaid.
• Limited funding. Money is distributed first come, first served, so not everyone who qualifies may be approved.

The fact sheet also states that delinquent taxes cannot be postponed. For current figures and the program timeline, the Controller's Office is the source to check.

Making the Home Safe Enough to Stay In

Staying in a house safely can matter as much as paying for it. The National Institute on Aging defines aging in place as staying in your own home as you get older. It notes that home-based services can be expensive but may cost less than moving to assisted living or a nursing home.

Home modifications are changes that make a house safer and easier to get around. Common examples include grab bars in the bathroom, a ramp at the entry, wider doorways for a walker or wheelchair, and a stair lift. Small changes can sometimes decide whether a parent can keep living alone.

The California Department of Aging, found at aging.ca.gov, is the state's resource for older adults. It works with a statewide network of local Area Agencies on Aging. These local agencies help older residents and their families find services such as in-home help, meals and caregiver support. A homeowner or family member can find the local agency for their county through the Department of Aging. Some California counties and cities also offer low-cost or deferred-loan home repair help for older homeowners. What exists depends on where the home is, so the local Area Agency on Aging or the county housing office is the place to ask.

For a family weighing whether a parent can stay safely at home, local agencies are a real and practical place to turn.

Home Equity Options: What They Are and What Each Involves

Equity is the home's value today minus what is still owed on it, as the CFPB puts it in its guide Considering a reverse mortgage? Proceed with caution. There are four main ways to borrow against it without selling. Which, if any, fits depends on the household's own facts.

Home equity loan. A lender pays a lump sum, secured by the home, and the borrower repays it in fixed monthly payments that begin right away. The borrower must qualify on income and credit.

Home equity line of credit (HELOC). This is a credit line secured by the home. The borrower draws money as needed and repays it with interest. Qualifying again depends on income and credit. The CFPB guide notes that these two loans might be a cheaper way to borrow against equity, but they carry their own risks and usually have monthly payments. The HELOC and home equity loan choice has its own tradeoffs for retirees.

Cash-out refinance. A new, larger mortgage replaces the old one, and the borrower receives the difference in cash. That means a new loan with new terms and monthly payments.

Reverse mortgage. A reverse mortgage lets a homeowner borrow against equity without monthly mortgage payments. Interest and fees are added to the balance each month, so the amount owed grows over time. The borrower must live in the home as a principal residence, pay property taxes and homeowners insurance, and keep the house in good condition. The loan comes due when the last borrower dies, sells or moves out. It is a loan, not income or a benefit. The CFPB guide warns that a borrower could face foreclosure if money runs out for taxes, insurance or other housing costs. The reverse mortgage and home equity loan differ most in payments and in how the balance moves.

Understanding what each option actually involves makes it easier to have an honest conversation with family or an adviser.

The HECM Reverse Mortgage: How It Works Under Federal Law

A family weighing a reverse mortgage usually wants to know what the rules actually are, not what an ad says. HUD explains that the Home Equity Conversion Mortgage (HECM) is the only reverse mortgage insured by the federal government. It is offered only through FHA-approved lenders.

Age. Under 12 U.S.C. § 1715z-20(b)(1), an eligible homeowner is one "who is, or whose spouse is, at least 62 years of age or such higher age as the Secretary may prescribe." The borrower must also live in one unit of a one- to four-family home, under 12 U.S.C. § 1715z-20(d)(3).

Counseling. Before getting a HECM, a borrower must receive counseling from an independent third party, under 12 U.S.C. § 1715z-20(d)(2)(B). The counselor cannot be tied to the lender or to sellers of annuities or insurance. The counselor must discuss topics that include:

• Alternatives. These include other housing, social service, health and financial options, and property tax deferral.
• The financial implications. This means what the loan would mean for the household's money over time.
• Possible effects. A HECM may have tax consequences, affect eligibility for federal and state programs, and affect the estate and heirs.

HUD's counselor roster can be reached at (800) 569-4287.

Payment options. Under 12 U.S.C. § 1715z-20(d)(9), the borrower chooses from these methods:

• a line of credit
• monthly payments over a set term
• a set term combined with a line of credit
• monthly payments for as long as the borrower lives in the home
• tenure payments combined with a line of credit
• any other basis HUD considers appropriate

These payments are made by the lender under the loan's terms, subject to the borrower meeting the loan's obligations. The amount available depends on factors including the youngest borrower's age and the home's value.

Non-recourse. Non-recourse means the debt is limited to the home. Under 12 U.S.C. § 1715z-20(d)(7), the homeowner is not liable for any shortfall between the balance and the net sale proceeds. The CFPB adds that neither the borrower nor the heirs will have to repay more than the home is worth.

Costs and cancellation. Federal rules limit the origination fee, allow it to be financed into the loan, and require the lender to disclose all costs. The FTC says the money is typically tax-free and won't affect Social Security or Medicare benefits. That statement is limited to those two programs; the required counseling, described above, covers how a HECM may affect eligibility for other federal and state programs. The CFPB notes a three-business-day right to cancel with most reverse mortgages. California's Department of Real Estate also warns of reverse mortgage scams aimed at seniors.

Knowing the federal rules behind a HECM helps a family tell apart what the law requires from what a lender or ad may say.

Other Ways to Reduce Housing Costs in Retirement

Borrowing is not the only way to close the gap, and some families start with the steps below.

A benefits check. Some older Californians may be eligible for programs that lower utility, prescription or other costs. The California Department of Aging, the local Area Agency on Aging and county social services can say what is available locally.

Renting space. Some homeowners rent a spare room or an accessory dwelling unit, which is a small separate living space on the same lot. Rental income can help with housing costs. It also brings landlord duties and tax questions that a tax professional can address.

Family arrangements. Some families share costs or share ownership. Changing who owns or pays for a home has legal and financial effects that an attorney can explain, and helping a parent with aging parents' home equity raises its own questions.

Downsizing or selling. Moving to a smaller or less costly home turns equity into cash. Proposition 19, covered in the property tax section, may help an eligible owner here. The CFPB guide notes that moving to a more affordable home can reduce overall expenses.