If you are over 55 and planning retirement in California, you need to understand Proposition 60. This legislation is very important to homeowners because it can help you save on property taxes. Basically Proposition 60 allows you to transfer your baseline property tax value to a new residence. This means that as your home value increases that you will only pay taxes on that lower base value. There are a few important stipulations.
You must be at least 55 at the time of the sale of the original property. You must have resided in the original residence. If you are married or if the property is co-owned, at least one spouse or co-owner must be at least 55 at the time of the first sale, and have resided in the original property. You must
…show more content…
You must purchase the replacement property within two years of selling the original property. The sale of the original property must qualify to be reassessed. The replacement property must be in the same county as the original. Proposition 90 allows for transfers between some counties. More information can be found in the Revenue and Taxation Code Section 69.5.
The original property must have been eligible for, or receiving, the Homeowner's Exemption or the Disabled Veteran's Exemption. You must file for the exemption on the replacement property as it is not automatically granted. The original property must have been sold. If the original property was given as a gift to a relative, you will be ineligible for this benefit.
The market value of the replacement residence must be equal to or less than the original. If the replacement property is bought after the original sold, and within a year of the sale, the market value can be up to 105 percent of the original. If the replacement home is bought within two years, the value can be up to 110 percent of the value of the first home. The comparisons in value are made between whole properties. You cannot take two original properties and make a claim based on the fact that the combined value is more than a single replacement home. On the same note you cannot make a claim based on the fact that a your stake in a partial ownership of a replacement