The Great Downsizing in Contra Costa County: Seniors on the Move!!!!

Senior Citizens are the fastest growing demographics in most Contra Costa cities.  Us baby-boomers are just starting to get to retirement age.  Now that the kids have moved out of the house, do we really want to spend all our free time cleaning and doing yard work?  Do we want to live far away from friends and services that are near and dear to us, especially if we are starting to have a hard time driving?  And often another consideration is income.  A lot of us have to consider ways to reduce our living costs because we may be on a fixed income.  So many of our senior citizens in Contra Costa are moving to the inner town areas near them, downsizing into Walnut Creek, Alamo, Danville, Orinda or Lafayette to be near to and be able to walk grocery stores, restraints, doctor's offices, senior services, etc. 

That is the reason why, but now how.  The major how is Equity.  Many of our senior citizens have lived in their homes in Contra Costa a long time building up equity.  But once they purchase, they need to minimize their living costs, even if they can purchase the new property outright and do not have a mortgage.  A major living cost is property taxes.  But seniors in Contra Costa have the ability to "Transfer" their Property Tax Base.  What this means is seniors can take the property tax base from their old property and transfer to their new property.  This Tax base is typically a lot (and I mean a lot) less than what their property taxes would be if they did not have this ability.  This is HUGH for seniors.  This reduces their monthly property tax payments by hunderds of dollars.  Here are the basic guidelines on transferring your property tax base:

Voters passed Proposition 60 November 4th, 1986.  This proposition provides to qualified homeowners the ability to transfer the base-year value of their principal residence to a replacement dwelling located in the same county, under certain circumstances. These are the requirements for this exclusion:

1. I could go into a lot of legalese but, somebody who is an owner of the house must live in the house and be 55 at the date of the original transfer.
2. The replacement property (the property you want to buy) must be purchased or newly constructed within plus or minus 2 years of the sale of the original residence.
3. The sale of the original residence must qualify for reassessment as the result of its transfer.  No, you cannot sell to your children and maintain the old tax base.
4. The 55 year old owner must have:
   *  Receiving, or eligible for, a Homeowner's Exemption or Have been receiving a Disabled Veteran's
   *  Exemption on the original and replacement residences.
5. The replacement residence must be "equal to or lesser" in market value than the original residence. In general, "equal or lesser" than market value of a replacement dwelling has been defined as: 100% of market value of original property as of its date of sale if a replacement dwelling is purchased before an original property is sold; 105% of market value of original property as of its date of sale if a replacement dwelling is purchased within one year after the sale of an original property; 110% of market value of original property as of its date of sale if a replacement dwelling is purchased within two years after the sale of an original property.
6. The 55 year plus owner or their spouse can only be granted relief under this section once. The disclosure of social security numbers by all applicants is required. They are used by the assessor to verify the eligibility of persons claiming this exemption and by the State to prevent multiple claims in different counties.

Can seniors transfer their original property tax base from county to county, maybe to be closer to their children? The answer is maybe.  That would be Proposition 90.  Seniors are allowed to transfer their property tax base only if the county in which the replacement dwelling is located has passed an authorizing ordinance. Contra Costa has passed this ordinance but most California counties have not.

So if you're thinking of downsizing and wish to transfer your property tax base you'll need to meet the above requirements, stay within Contra Costa County or a move to a county that accepts property tax base transfers.

You can find AJ Nisen on Active Rain at Contra Costa California Mortgages or at Bank of America Mortgage