As it is now, homeowners who are over 55 can transfer their property tax rate to a new home. However, restrictions apply: they must move to a less expensive home, must move to one of ten counties that accept this transfer, and can use this transfer only once. Prop 19 would remove those restrictions... and more.
In addition, as it is now, if you inherit a home from a parent or grandparent today, the taxable value of the home stays the same after you inherit it even though it has changed ownership.
If this looks like something you once squinted at, it's because CA voted on something similar two years ago, Prop 5 (2018). After ~60% of voters rejected that, the California Association of Realtors revamped it, spiced it up with provisions that would create more liquidity in the housing market, and got it through the legislature.
In addition to allowing 55yo+ move with their current property tax assessment anywhere in California, to any size home, up to 3 times in their life, Prop 19 would also:
The change for the inherited tax break is to generate more property tax revenue. (Note that Prop 5 (2018) was estimated eventually to lose local government's $1 billion a year. Prop 19 is at least expected to be out of the red.) All in all, even though some will pay less taxes when they move, the LAO estimates Prop 19 would eventually create a net gain for local governments of a "few hundred million dollars per year." Normally, 40% of property taxes goes to schools, but as stipulated, the gains from Prop 19 would primarily go to fire protection.
As they did in 2018, supporters say this helps empty-nesters who want to move but can't because they pay so little in property taxes now and would have to pay a lot if they bought a new place (thanks Prop 13). It would incentivize long-time homeowners to move, freeing up homes to the market.
Those opposed say this is so obviously a self-serving proposition from the real estate industry to sell more homes in California. Even looking past that, this would further the inequities created by Prop 13, which rewards long-time homeowners. They say that the solution to fix our tangled property tax system is not to create more inequity. It's to reform it altogether. And creating more liquidity may help, but ultimately, we need to make more homes.
In terms of the inherited property tax break, opinions are mixed. Some think we should get rid of it, as Prop 19 proposes; others say it's not just. In many instances, people turn their inherited property into a rental while skirting the taxes that new homeowners would have to pay.