Prop 60 – Orange County Home Buyers Over 55 Can Save on Property Taxes

If you are 55 years or older and are considering a move to a smaller home or simply a home that better meets your needs, Prop 60 may provide significant savings on your property tax bill. Proposition 60 was approved by California voters in 1986 and allows qualifying home owners to replace their primary residence with a new home of equal or lesser value and maintain their same tax base.

This offers a distinctive benefit to those home owners who have owned their homes for a long time and have enjoyed low tax rates as a result of California’s Proposition 13. As an example, someone who bought their home 20 years ago for $300,000 may be paying approximately $3500 per year in property taxes. If this home has a market value of $900,000 today, the homeowner could potentially sell the home and move into a $600,000 home and still pay just $3500 per year in property tax vs. $6900 without Prop 60. As you can see the savings can really add up.

While Prop 60 allows for a replacement property in the same county, Prop 90 was later passed and allows for qualified home owners to sell their home under Prop 60 and buy a replacement home in a “reciprocal” county. There are currently 7 California counties participating in the program.

Here are some of the conditions that must be met to qualify:

• The original home and the replacement home must be primary residences.

• The original home and the replacement homes must be in the same county or a “reciprocal” county.

• The seller and/or spouse must be 55 years of age or older at the time of transfer.

• Replacement property must be equal or lesser value than the current market value of the original home.

• Purchase of the replacement property must take place within two years of the sale of the original property.

• Applications must be filed within 3 years of the replacement home purchase.

• This benefit can only be used one time – if married neither spouse can do again.

• Consult the Orange County Tax Collector’s office for further details.

As a licensed California Real Estate Broker serving the greater Orange County area, I would welcome the opportunity to work with you to sell your home and find a replacement home taking advantage of the benefits that Prop 60 provides.

If you are simply exploring your possibilities, I invite you to search the Orange County MLS on my website, as well as request a free estimate of your Orange County home’s value. I can be reached any time at 949-500-0484.