One of the most frequent questions I get is about Proposition 60 and Proposition 90. Prop 60 and Prop 90 are two amendments directed at those over 55 (or permanently disabled). This gives people the ability to transfer their original year tax base to a new property that is equal or lessor value (certain exceptions apply). That means that if you bought a house long ago for 400,000 and are paying taxes based on that amount, you can now sell your house, buy a new one for equal or lessor value of your home's current market value (say it is now worth 900,000) but pay taxes now only on that same 400k! What a deal huh?
As I said, I get many questions, they ask can I move outside Contra Costa County with my Prop 60? What counties accept Prop 90? So let me answer here, though as always, SEE A TAX ADVISOR for more specifics and confirm BEFORE you make a move!
Here is some information from: http://www.boe.ca.gov/proptaxes/faqs/reappraisal.htm
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.
- What are the conditions that need to be met in order to qualify for the exclusion?
- 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.
- 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.
- At the time of sale, the original property must have been eligible for the Homeowners' Exemption, or entitled to the Disabled Veterans' Exemption.
- Generally, the replacement dwelling must be of equal or lesser value than the original property.
- The replacement dwelling must have been acquired or newly constructed within two years of (before or after) the sale of the original property.
- The owner must file an application within three years following the purchase date or new construction completion date of the replacement property.
- 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.
- What counties participate in Prop 90?
As of November 5, 2004, each of the following seven counties has an ordinance implementing the intercounty base year value transfer provisions of section 69.5 of the Revenue and Taxation Code (Proposition 90):
Alameda, Orange, San Mateo, Ventura, Los Angeles, San Diego, Santa Clara
And yes, THIS DOES MEAN that the above 7 counties are the only ones you can transfer TO using your original base year value. And yes, that also means you can not come TO Contra Costa with your base year value.
For specific Contra Costa County information and more exact information on how to qualify for this property tax benefit see: http://www.co.contra-costa.ca.us/depart/assr/prop_info.htm#prop_60
There are very important qualifications and time frames involved. So check carefully!
In Contra Costa, it is most common for folks to use this while "moving down." Moving down into a smaller home, into senior community, into a golf community, etc. Sell that 800k house and buy down to a 500k house on the golf course in Summerset. Or move to Rossmoor. Or simply buy a smaller, single family home in the same area.
Call me when the time comes to buy-down and retire!
Catherine Myers, REALTOR
Alain Pinel Realtors
925-627-3027
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