Do you and your spouse start the same conversation every New Year? Do you think, “Gee- we really should move now that all the kids are gone.”
Some people stay put because they love their low property taxes. Those who bought their homes 15-30 years ago enjoy much lower taxes than newer home owners- and no one like to give up a good deal!
But our homes are so much more than a simple business proposition and the decision on where best to live should not be dictated by your tax rate. Fortunately, there is an option that let’t you have your proverbial cake and eat it, too.
These propositions provide a one time property tax benefit by preventing reassessment when a senior citizen (age 55 years or older) sells his/her existing residence and purchases a replacement residence worth the same or less than the original property. This proposition either applies to the principal claimant of the original residence or a spouse who resides with the seller who must also be 55 years of age at the time of sale.
Why were they enacted?
These propositions were set forth to encourage senior citizens to “move-down” into smaller residence and not be penalized by having to pay higher property taxes. When a senior citizen acquires a replacement worth equal or less than the original he/she will continue to pay approximately the same amount of annual property taxes as before.
How do they work?
When the homeowner purchases or constructs a new residence it will not be assessed if he/she qualifies. The Assessor transfers the factored base value of the original residence to the replacement residence. Prop 60 requires that both the original and replacement homes be within the same county. Prop 90 was later enacted to broaden the effects of Prop 60.
Prop 90 enables homeowners to transfer the principal residence to include other counties, as long as that county has implemented the initiatives. (A listing of counties participating is listed down below)
When are they effective?
The replacement residence must have been purchased or constructed on or after November 5, 1986 if the original was located in Los Angeles County. If the original was located in any other California county, as long as the county is participating, the replacement residence must have been purchased or constructed on or after November 9, 1988. Claims must be filed two years following the purchase or construction of the replacement residence. When claiming the exemption the claimant must own and occupy the replacement property. Also, claimant must file for a Homeowner’s Exemption on the replacement property, this is not granted automatically.
How to Claim Tax Relief
Claim forms are available from several sources.
Claim forms may also be requested by mail or in person at any Assessor’s office.
Prop 60/90 Eligibility Requirements
* The replacement property must be the owners principal residence and eligible for the Homeowner’s Exemption. The original property, at the time of it’s sale, must have been eligible for the Homeowner’s Exemption, or entitled to the Disabled Veteran Exemption.
* 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 purchased or constructed on or after November 5, 1986 if the original was located in Los Angeles. If the original was located in any other California County, the replacement property must have been purchased or constructed on or after November 9, 1988.
* The replacement property must be purchased or newly constructed within two years (before or after) of the sale of the original property.
* **NEW** The claim must be filed within 3 years of purchasing or completed new construction of the replacement property. If a claim is filed after the 3 year period, relief will be granted beginning with the calendar year in which the claim was filed.
* This is a one-time filing. Proposition 60/90 relief cannot be granted if a claimant or spouse was granted relief in the past.
* Proposition 60/90 relief includes, but is not limited to: single family residences, condominiums, units in planned unit developments, cooperative housing corporation units, or lots, community apartment units, mobile homes subject to local real property tax, and owners living in premises which are a portion of a larger structure.
* In most instances, if more than one owner of an original property is eligible for Proposition 60/90, they must choose among themselves which one will use the benefits.
Places you can move to:
Alameda Orange San Mateo Ventura Los Angeles San Diego Santa Clara
Intrigued? Thinking this might be the answer that will let you pursue that dream beachside cottage in Ventura County?
Here’s what you should do next:
Call me. You need some good, factual, information about what selling your home will look like and what your buying options might be. I know that you have options, and one option is stay right where you are. I promise there will be no “selling”- just solid information that will help you to decide what to do next.
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