Ordinarily, when the ownership of California real property changes, the property is reassessed at its current fair market value and the new owner pays property tax based on the reassessment. Proposition 60 created an exemption by providing that a taxpayer who is 55 years of age or older may transfer the Proposition 13 base year assessment of his/her principal residence to any replacement dwelling of equal or lesser value* within the same county. If eligible, the homeowner will pay property tax on the replacement home based on the same assessment value as the former home. Proposition 90 enables such taxpayers, in certain circumstances, to transfer their base year value to a replacement dwelling in another county.
Only certain counties have adopted Proposition 90. In many of these counties, Prop 90 is coming up for renewal. The State Legislature has extended the Prop 90 bill indefinitely, subject to the approval by each county in the program. It is IMPERATIVE that you verify with the individual county that they are still accepting Prop 90 transfers. The property tax office in Sacramento, for all counties in California may be reached by calling the California State Board of Equalization ( https://www.boe.ca.gov/proptaxes/prop60-90_55over.htm ) for general tax questions at 800-400-7115. As of November 7, 2018, the 10 counties that currently participate with Prop 90 are as follows: Alameda, Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Mateo, Santa Clara, Tuolumne and Ventura. Again, since county status is subject to change every year, we recommend contacting the county to which you wish to move to verify eligibility.
* In general, “equal or lesser value” of a replacement dwelling has been defined as:(1) 100% of market value of original property as of its date of sale if a replacement dwelling is purchased before an original property is sold. (2) 105% of market value of original property as of its date if a replacement dwelling is purchased within one year AFTER the sale of an original property. (3) 110% of market value of original property as of its date of sale if a replacement dwelling is purchased within the second year AFTER the sale of an original property.
Some of the qualifications are as follows:
- The principal claimant must be at least 55 years of age as of the date of sale of the original residence and must have been an owner of record of both the original and the replacement residence.
- The property may be a single-family residence, a unit within a cooperative housing project, condominium project, planned unit or a mobile home.
- The replacement residence value must be “equal to or lesser than” the value of the original residence. Equal to or lesser than is further defined on the application. See Jim for details.
- The replacement residence must be purchased or newly constructed within 2 years, before or after, the sale of the former residence.
- The base year value of the original property cannot be transferred to the replacement dwelling until the original property is sold.
- A taxpayer is not eligible for the tax relief until they actually own AND occupy the replacement dwelling as their principal residence.
- The principal claimant must have been receiving or have been eligible for either the Homeowners Exemption or the Disabled Exemption on the original residence.
- An application/claim must be filed within 3 years of the date the replacement property is purchased or newly constructed.
- The transfer of property tax is valid only 1 time. (Unless you become disabled after using the age 55 exemption.)
To help expedite your Prop 60/90 Application 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 for both the sale and the purchase.
If you have any interest or would like to speak with us directly, please do not hesitate to contact us at anytime. We thank you for your time and we look forward to hearing from you!