Monday, August 21, 2006

 

OVER 55? CALIFORNIA PROPERTY TAX RELIEF


California Proposition 60 and Proposition 90
Transfer property tax base.


Since its passage, Proposition 13 prohibits property tax increases until property ownership is changed.

If either spouse is over age 55 (when the old home is sold), PROP 60 allows replacement of a primary residence with a new home of equal or lesser value (but see below) within the same county and transfer of the Prop 13 assessed valuation from the old home to the new property. This is allowed once in your lifetime, and a spouse who has done it before 'taints' both spouses.

PROP 90 allows counties to elect to accept transfers of Prop 13 values for moves from other counties when a primary residence is replaced with a less expensive (but see below) home. If you are over 55 and move into a county which accepts Prop 90, you may take your old, lower Prop 13 value, regardless of from which county you move.

7 COUNTIES WHICH ACCEPT PROP 90
(Current as of 6/1/2005)
Alameda, Los Angeles, Orange, San Diego, San Mateo, Santa Clara, and Ventura. [Contra Costa, Inyo, Kern, Riverside, Modoc, Monterey, and Marin have dropped out of the Prop 90 program.]

"Propositions 60, 90, and 110 are constitutional amendments approved by the voters of California. They provide for the transfer of a property’s base year value from an existing residence to a replacement residence, under certain conditions, for qualified persons over the age of 55 or persons of any age who are severely and permanently disabled."

For the most accurate up to date information, see the State Board of Equalization's website.

Here are the conditions that need to be met in order to qualify for the exclusion;

1) Both properties must be located in the same county, unless the county in which the replacement residence is located has an ordinance that allows intercounty base year value transfers.

2) As of the date of transfer of the original property, the transferor (seller) or a spouse residing with the transferor must be at least 55 years of age, or be severely or permanently disabled.

3) At the time of sale, the original property must have been eligible for the Homeowners’ Exemption, or entitled to the Disabled Veterans’ Exemption.

4 Generally, the replacement dwelling must be of equal or lesser value than the original property.

5) The replacement dwelling must have been acquired or newly constructed within two years of (before or after) the sale of the original property.

6)The owner must file an application within three years following the purchase date or new construction completion date of the replacement property.

7) The original property must be subject to reappraisal at its current fair market value. Therefore, transfers of the original property that are excluded from reappraisal (e.g., most transfers between parents and children) will not qualify.

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