California Real Estate:
Selling Your Home:QUESTION: We'd like to downsize, but are concerned about higher property taxes if we move. Can we transfer our taxes to the new home that we buy? ANSWER: There are two propositions you should know about: Proposition 60-Replacement Residence Exclusion, and Prop 90-InterCounty Transfer of Base Year Values. These propositions apply only to the state of California. The answer to your question depends upon where you plan to move. If you move outside your present county, then Proposition 90 must be in effect in order for you to take your property tax base with you and you must be at least 55 years of age. If not, your property taxes will be taxed at the same rate as any other new home buyer. That rate will be at approximately .0125 % of the new purchase price. 1) After Proposition 90 was passed in 1988, each of the state's 58 counties had to decide whether or not they would allow the transfer of assessed values into their jurisdiction. They considered the loss in assessed value and what that would mean to tax revenues. As a result, there are not many counties that currently have Proposition 90 in effect. Below is an excerpt from the California Association of Realtors web site regarding Proposition 90. Before selling, please verify local tax laws with your county tax assessor's office and your tax advisor. Provisions may have been changed since this was posted on this site. 3/22/2006 (Check with county assessor's office for update on current provisions.) Ordinarily under Proposition 13, the value of a home for property tax purposes is re-assessed to market level whenever a change in ownership takes place. This usually results in higher property taxes for the homebuyer. In November 1988, the state's voters approved Proposition 90, which is designed to induce greater turnover of homes owned by senior citizens. The measure provides anyone over the age of 55 with relief from Proposition 13 by allowing them to move from one county to another without undergoing a change in their basic property taxes. Proposition 90 is a "local-option" law; each county has the option of participating. If a county has adopted a Proposition 90 ordinance, it accepts transfers of property tax base assessments from other California counties. If the county that the homeowner is moving from does not have a Proposition 90 ordinance, this does not affect the eligibility of the homeowner. [Please note: Proposition 60 is a similar law passed by the state's voters two years prior to Proposition 90. It allows seniors to keep their property tax base assessment when they move within the same county.] Table I below lists the counties that have adopted a Proposition 90 ordinance. Table II lists the counties that have rejected Proposition 90. TABLE I *This information is from the California Association of Realtors Online web site at www.car.org. 2) Proposition 60: Allows homeowners 55 years of age and older to transfer the base year value of their principal residence to a newly purchased residence in the same county, providing that certain requirements are made. For these specifics detailed, go to the Contra Costa County Tax Assessor's web site on Proposition 60. Their web site is at: Please consult your local tax assessors office to verify current status and provisions of this proposition before selling your home. Provisions may have changed. The information provided here is thought to be accurate but is not guaranteed.
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