Are you or someone you know of age 55 and over?
Have you ever thought to yourself, “Gee it would be nice to sell the old house and get into a nice new one, but if I do I’ll have to pay higher property taxes on the new home.”?
If so, then read on. The good news is that you may be able to take your existing property tax base year value to your new home if you meet the qualifications for California Propositions 13, 60 and 90.
Under Proposition 13 the value of a home, for property tax purposes, is reassessed to the new market level (the new purchase price) whenever a change in ownership occurs. This usually results in higher property taxes.
Proposition 60 allows a transfer of base-year value of the principal residence sold of a senior citizen (55 and older) to a replacement dwelling of equal or lesser value within the same county.
Proposition 90, enacted in California in November of 1988, provides an avenue for property tax relief to owners 55, and older, who sell their principal residence and purchase a replacement home of equal or lesser value in another county.
The County Assessors will require a copy of the tax bill from the other county and a copy of the applicant’s birth certificate to be included with the application. Also include a copy of the grant deed for the new purchase and a copy of the closing statements of both sale and purchase.
SUMMARY OF ELIGIBILITY REQUIREMENTS
The seller of the original residence, or a spouse residing with the seller, must be at least 55 years of age, as of the date that the original property is transferred. The replacement property must be of equal or lesser “current market value” than the original.
The tax base year of the original property cannot be transferred to the replacement dwelling until the original property is sold. The replacement property must be purchased or newly constructed within two years (before or after) of the sale of the original property.
The owner must file an application within three years following the purchase date or new construction completion date of the replacement property. This is a one-time only filing. Proposition 60/90 relief cannot be granted if the claimant, or spouse, was granted relief in the past.
Proposition 60/90 relief includes, but is not limited to: single family residences, condominiums, units in planned unit developments, cooperative housing, corporation units or lots, community apartment units, mobile homes subject to local real property tax, and owner’s living premises which are a portion of a larger structure.
The taxpayer is not eligible for the tax relief until they actually own and occupy and the replacement dwelling as their principle residence. It is essential that you call the co-operating County in question, to verify that they are currently accepting the value transfer under Proposition 90, and what their requirements are.
Here are the phone numbers for each county, keeping in mind that counties can elect to discontinue Proposition 90, so be sure to check first: Alameda (415) 272-3755 Ventura (805) 654-2181 Santa Clara (408) 299-4347 Kern (805) 861-2311 Modoc (916) 233-3939 San Diego (619) 531-5507 Los Angeles (213) 974-3101 Orange (714) 834-2746 San Mateo (415) 363-4500.
If you have any questions, the property tax office in Sacramento for all counties in California may be reached at (916) 445-4982.
Here is a a very helpful link to Propositions 60 and 90 Frequently Asked Questions on on the the California State Board of Equalization web site
DISCLAIMER: This article is intended to be a general discussion only and to provide a starting point for your own research of the California property tax laws. Under no circumstances should you consider this article to be legal, tax or accounting advice. If you are attempting to transfer your property tax base year value you are advised to consult the appropriate licensed professional.