Tax Base Transfers - Propositions 60 & 90
I find that a lot of Senior homeowners who are thinking of selling their home and buying another do know a little about or at least have heard of the California voter passed Propositions 60 (in 1986) and 90 (in 1988).
These 2-propositions 60/90 are in regards to “property tax base transfers”. But in most all cases, these particular senior homeowners are not informed enough and are missing the “rest of the picture”.
Yes, what these homeowners are wanting is for their current property tax base to transfer to the house they want to buy and/or have bought already. But there is some misunderstanding as to how this transfer can be accomplished.
So in order to have more clarity: (1) the homeowner needs to know what is the age that qualifies them for these Proposition 60 and 90 programs, (2) which California Counties have enacted these two-propositions/ordinances to accept/authorize said tax base transfers and (3) in regards to monies to be spent and/or already spent, does the “purchase price/market value” of the replacement home qualify for the former home assessed tax base to be transferred to the replacement home?
Overall, Proposition 60 and 90 are indeed property tax savings programs. Both are constitutional tax initiatives that allow tax exemptions to Senior citizens for the transfer of the “trended tax base value” of their former home to a replacement property.
Here is a look at the major components of Propositions 60 and 90 plus their Eligibility Requirements and how does one qualify:
• Homeowners must be of age 55 or older. For married couples: only one spouse must be at least 55 or more to qualify. Only once can a claim be filed for the “married couple”. Once you have filed and received this tax exemption relief, neither you nor your spouse can ever file again. This applies even if one of you was under-the-age of 55 at time of filing, upon your spouse's death or if the two of you divorce.
• As a person over the age of 55, you can only use/file for the benefits of Proposition 60 and/or 90 only once in a lifetime. However, there is one exception and that is via Proposition 110.
• The one exception to the “one time only” benefit rule is... if a person has filed and received relief for meeting the 55 of age requirement and subsequently became severely and permanently disabled after the date of the original claim and had to move because of the disability, then the base year value is allowed be transferred a 2nd time (Proposition 110)
• If an individual has been declared disabled - is receiving tax base relief benefits and if at the time of filing the claimant was and/is under the age of 55, then the “tax base transfer exemption” is not available in the reverse situation… meaning that, if a person is receiving the relief benefit due to his/her permanent disability, then he or she cannot claim the tax exemption again once they reach the age of 55.
• If a Registered Domestic Partnership or a "significant other" own a home together, only one of the partners can be a claimant. As of now, a registered domestic partnership is not considered a “married couple”. Therefore the registered domestic partner and/or the significant other, who did not file the original claim, can use his/her “one time only” claim/benefit later on in life.
• Homeowners must purchase or complete construction/build the replacement property within 2-years after selling their former home or sell their former residence within 2-years after purchasing or complete construction/build the replacement property.
• Both the former and replacement properties must be for the purpose of being the owner’s “primary/principle residence” and must be eligible for the homeowners' exemption or Disabled Veterans exemption.
• The market value of the replacement home as of the date of purchase and/or the completed date of construction (that is if you plan to build or have built already), must be “equal to or lesser than” the market value of the former home on its date of sale.
1) What are the California Counties that have enacted both Propositions 60 and 90 initiatives and ordinances to accept/authorize property "trended" tax base transfers?
As of this writing, there are 11-Counties:
• Alameda • Orange • San Diego
• Tuolumne • Ventura • El Dorado
• Riverside • San Mateo
• Los Angeles • San Bernardino
• and Santa Clara
2) What is the difference between Proposition 60 and Proposition 90?
Proposition # 60 relates to the trended tax base transfer within the same County (Intra-County).
Proposition # 90 allows the trended tax base transfer from one County to another County (Inter-County). The location of your former residence does not have to be in one of the 11-Counties listed above, but the replacement home needs to be in order to qualify.
There is some Counties that have enacted only Proposition 60 and have not yet adopted Proposition 90 or vice-versa. So since each County is subject to change/differences, it is recommend that you contact the County Assessor in which your future replacement home is to be located.
3) How do I go about filing for Prop 60 or Prop 90 tax relief?
You should file an application with the County Assessor where the replacement home is to be located. You must file the claim within 3-years after both transactions are completed. That is (1) the sale of former/original home and (2) the purchase and/or completed construction of the replacement home.
It does not matter which of the two transactions took place first. But what must be understood is that the latter date of the two is when the 3-year filing period starts.
• It is important that you do not confuse the 3-year period to file a claim with the 2-year period for the homeowner to purchase or complete construction/build the replacement property after selling the former home or sell their former residence within 2-years after purchasing or complete construction/build the replacement property.
If you are thinking of Selling your home and if you have any questions in regards to "transfering" your current Tax Base to your new/replacement home...feel free to contact me any time.
Always know that I will certainly make it a point to make myself available for you. I can answer your questions in a matter of minutes and it would be my pleasure to do so.
Oscar Castillo : Broker Associate (San Diego, CA)
- Residential Brokerage