3/22/2017

Take Advantage of Tax Savings if You're Moving to Another California Residence, Prop. 60 and Prop 90

Long Beach Queen Mary
Thinking about moving, possibly away from familiar sights? If so, some advance planning might help you to take advantage of one of these two propositions which may grant some considerable property tax savings.  **See 4/12/17 update below**

As of June 5, 2015, the following eleven counties in California have an ordinance enabling the Prop. 90 intercounty base year value transfer (CA State Board of Equalization source):
Alameda, Orange,San Diego, Tuolumne,El Dorado, Riverside,San Mateo,Ventura, Los Angeles,San Bernardino, and Santa Clara.

Proposition 60 allows transfers of base year values within the same county. Proposition 90 allows transfers from one county to another county in California and it is the discretion of each county to authorize such transfers. The County Assessors will require a copy of the tax bill from the other county and a copy of the applicant’s birth certificate to be included with the application. Also, include a copy of the grant deed for the new purchase and a copy of the closing statements of both sale and purchase.

Eligibility:

The seller of the original residence, or a spouse residing with the seller, must be at least 55 years of age as of the date that the original property is transferred. The replacement property must be of equal or lesser “current market value” than the original.  See the Los Angeles County Tax Assessor website for specific information on equal or lesser value. The base year value of the original property cannot be transferred to the replacement dwelling until the original property is sold.

The replacement property must be purchased or newly constructed within two years (before or after) of 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.  This is a one-time only filing. Proposition 60/90 relief cannot be granted if the claimant or spouse was granted relief in the past. The taxpayer is not eligible for the tax relief until they actually own AND occupy the replacement dwelling as their principle residence.

Update April 12, 2017 from California Association of Realtors State Legislative Weekly Update:
AB 1322 (Bocanegra) Property Taxation: Intercounty Base Year Value Transfers - Under Proposition 60, homeowners 55 years of age and older can currently transfer the base year value of their home to another home located within the same county. In addition, under Proposition 90, these same homeowners can transfer the base year value of their home to another county if that county has opted into the Proposition 90 program; however, only about ten counties have elected to do so. C.A.R. supports AB 1322, which remedies this situation by allowing homeowners 55 years of age and older to transfer their property tax base year value to any other county in the state if the companion constitutional amendment, ACA 7 (Bocanegra), is approved by the voters. AB 1322 passed out of the Assembly Revenue and Taxation Committee this week. 

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