How Do I Transfer My Tax Base To My New Home?

This is a tricky issue that’s been lurking around ever since Prop 60 and Prop 90 were passed quite a few years ago. We’ve all heard it’s possible to sell a home in one California county and move the property tax base to another home, but the details sometimes get lost in translation. Who’s eligible and how, exactly, does this work?

First, these propositions do allow homeowners to transfer the tax base in one home to a replacement property, but this option is available only to those 55 or older. That’s discriminatory, but these propositions are there to help older citizens afford to stay in California, especially those who want to downsize. Prop 60 helps those who want to move intra-county or within the county and Prop 90 is for people moving outside their current California county. As of this moment, the participating counties are Los Angeles, Orange, Alameda, San Mateo, Ventura, San Diego and Santa Clara. The counties do change, so it pays to check if you are actually planning a move.

This means a qualifying homeowner who bought a home in Claremont, say, for $250,000 in 1988 with a current market value of $950,000, paying about $3500 in property taxes, can sell that home, buy an upscale condo in Pasadena for $700,000 and, using Prop 60, transfer that $3500 tax base to the new home, saving nearly $4000 a year in property taxes!

What kind of property is eligible?Only your principal residence qualifies. The newly-purchased property, either within the county or outside the county, must be either equal or lesser in value than the sold property. The homeowner must apply for the relief of these propostions must be made within 3 years either before or after the purchase.

What type of property ualifies for the purchase? Pretty much any kind of home–single family, condo, unit in planned development, cooperative housing, community apartment, mobile home subject to local real property tax, and living unit within a larger structure consisting of both residential and non-residential units.

So, this is a terrific advantage for seniors, making mdownsizing much more affordable. Of course, up-sizing is not possible. And, newly-married couples with two homes can’t combine the value of both homes….In sum, seniors say, “Thank you, voters of California!”
For further info, check L.A. County Tax Assessor

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