Homeowners often come into my open houses and mention how they wish they could “downsize”. They feel locked into their current homes because of their low property tax base. As we chat I ask them if they are familiar with Proposition 60 and Proposition 90, and surprisingly most are not.
Here is a brief explanation of each. These propositions provide property tax relief for those over the age of 55 wishing to transfer their original tax base to a replacement property of equal or lesser value when they sell their home. Prop 60 applies when the replacement home is in the same county as their existing home. Prop 90 however, allows this transfer to take place from one California county to another participating county. Currently only 7 counties participate; Alameda, Los Angeles, Orange, San Diego, San Mateo, Santa Clara and Ventura. Please note that a property owner is only eligible to transfer their property tax base ONCE!
- The seller of the original residence or spouse who resides with the seller, must be at least 55 years old at the time of the sale AND
- The replacement home must be of equal or lesser value than the home sold AND
- The replacement home must be in the same county or another participating county.
- One note: If you sell your home first, you have up to two years to find your replacement home. Within the first year you can increase the value up to 5% and within the second year up to 10%. It is best, however, that you try to maintain the same or less than value. A county appraiser will determine if you are eligible for the transfer, so do not push the limit!
The Transfer is NOT Automatic
The owner must file an application for transfer with the local Assessors office of the participating county. You must file within 3 years after the purchase of the replacement home. The applications are available at the Assessors office and it is a one-time only process.
If you have any questions regarding this or any other real estate issue, please do not hesitate to call me. I am happy to take the time to answer all your questions and concerns.