Proposition 90 - Selling Your Orange County Home & Keeping Your Current Property Tax Basis
The Property Tax Incentive To Move. The California State Board of Equalization has estimated that new homeowners pay an average of 3X more in property taxes than do those who have owned their home since 1978 due to the passage of Proposition 13. Get the facts before you begin...
So What Does Proposition 90 Do? Prop 90 allows homeowners age 55 and older to transfer the assessed value on their current home to a home of equal or lesser value in participating counties (Orange County is included!) as prescribed by the proposition itself and approved by the County Tax Assesor. In practical terms 'equal or lesser value' means that the fair market value of a replacement home on the date of purchase or completion of construction does NOT exceed 100% of the market value of the original home as of it's date of sale. 105% of market value of the original home as of it's date of sale is allowed if a replacement home is purchased within one year after the sale of the original property and 110% of market value of the original home as of it's date of sale if a replacement home is purchased within two years after the sale of the original home.
How To Qualify For Proposition 90 Benefits?
Principal Residence - The original home, at the time of it's sale, and the replacement home must be the owner's principal residence and eligible for the Homeowner's Exemption, or entitled to the Disabled Veteran's Exemption.
55 Or Older - The seller of the original home, or a spouse residing with the seller, must be 55 or older at the date that the orignal home is transferred/sold.
Equal Or Lesser Value - The replacement home must be of equal or lesser "current market value" than the original home as determined by the Assessor.
Up To Two Years To Replace - The replacement home must be purchased or newly constructed within two years (before or after) of the sale of the original home.
Up To Three Years To File - The owner must file an application with the Assessor within three years following the purchase date or completion date (new construction of the replacement home.
Prop 90 Benefits Are Only Available In These California Counties...
Alameda | Los Angeles | Modoc | Orange |
San Diego | San Mateo | Santa Clara | Ventura |
Specific Rules - The Assessor transfers the factored base value of the original home to the replacement home. Any resident who is on title and is 55 years of age or older at the time of sale may qualify for Prop 90 benefits. The Assessor must determine the full current market value of the replacement home as of it's date of purchase or completion (new construction). The Assessor must determine the market value of each property, which may differ from sales price. Check with the Assessor in Orange County to determine the applicable time frames for sale and purchase of replacement homes. The Orange County Proposition 90 Claim Form is here..
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