Not enough people know that they are able to see their home and transfer their property tax base. It’s available to anyone who is 55 and older. You can use prop 60 / 90 to Sell Your Home and Transfer Your Tax Base.
We have a housing shortage in San Diego and we also have very little inventory. Why is inventory so low? Because people who have owned a home for a long time don’t want to sell and lose their low property tax base. It’s also hard to find a replacement property because inventory is so low. It’s a catch 22.
Propositions 60 and 90 – What you should know
What is prop 60 / 90?
It’s a tax initiative that allows people 55 and older to transfer their tax from their current home to a replacement property if certain requirements are met. This could result in a significant property tax savings.
What is required to qualify?
The property must be your primary residence. The replacement home can be purchased or built but it has to be equal or less in value to your existing home. This benefit can also only be used once.
When do you file or make the claim?
You have up to 3 years to file a claim but usually this is something that you will do during your escrow period. Real life example, I helped my grandmother do this with her primary residence a couple years ago and we handled everything during escrow. The process was easy. She sold her home in Carmel Valley and purchased a condo Downtown.
The replacement home must be purchased or built within two years of the sale of the original property. This can be 2 years before or after but remember the value can’t be greater than the home you are replacing.
You or your spouse must be at least 55 years old at the time you sell the original home.
Common Questions about proposition 60 and Proposition 90
Q. What is the difference between Prop 60 and Prop 90?
A. Prop 60 relates to transfers within the same county and Prop 90 relates to transfers of base value from one in California to another County in California.
Q. What is the Proposition 60/90 filing deadline?
A. You must file a claim within 3 years of purchasing the new replacement home. You can file after the 3 year period but the benefit will start at the beginning of the calendar year in which you filed the claim.
Q. My original home is located outside San Diego County, but I am buying a home within San Diego County?. Do I qualify for relief?
A. Yes. This is the difference between Prop 60 & 90. (Explained Below)
Q. Are other counties covered if I move to another county other than San Diego?
A. You can qualify. Other counties in California have passed ordinances allowing Proposition 90. You should contact the county you are thinking of moving to and confirm eligibility of Prop 90.
Q. Do all replacement homes qualify?
A. As long as you are buying a home, condo, anything subject to local real property taxes and living in the unit as a primary residence you should qualify.
Q. What if I make improvements to my replacement property?
A. You can make improvements but if your improvements cause the home value to increase in value above the original property value than you would not qualify. Make improvements but keep the new value below the original property value.
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Q. What does “equal or lesser value” of a replacement property mean?
A. The meaning of “equal or lesser value” depends on when you purchase the replacement property. In general, equal or lesser value means:
- 105% or less of the market value of the original property. Replacement property is purchased within the first year after the sale of the original property.
- 110% or less of the market value of the original property. Replacement property is purchased within the second year after the sale of the original property.
NOTE: It is important to understand that the market value of a property can be different than the purchase price. This is common with new construction. The Assessor will determine the market value of each property. With new homes often the sale price does not include upgrades paid for outside of escrow.
Q. Can I get partial relief?
A. No, the benefits can’t be partially granted. It is all or nothing.
Q. What if there are multiple owners, who get’s the benefit?
A. The owners have to decide who gets the benefit. The tax base can’t be split among different owners or properties. Only one original owner can claim the benefit.
Sell Your Home and Transfer Your Tax Base in San Diego County – Contact Us
Q. Instead of selling, what if I give my original property to family? Can I get the benefit?
A. No, the original home must be subject to reappraisal with the assessors office at full market value. You can certainly sell to family but the assessor will determine fair market value even if you sell at a reduced price.
Q. What if the original property is a 1-4 unit property?
A. The equal or lesser value is determined by the original single unit that the homeowner claims as their primary residence. And the replacement property must be equal or less to the market value of the original single unit. Not the entire multi-unit property.
Have additional questions about this article, Sell Your Home and Transfer Your Tax Base? Contact Us, we are here to help.
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