Where and how can seniors transfer their property tax basis within California?

Proposition 13 keeps residential real estate taxes from skyrocketing when you’ve lived in the home a long time and haven’t done major additions or huge remodeling all at once (those would cause a re-appraisal). For people who’ve owned their home for 30 years or more, the property taxes might be a tenth as much as what new buyers on the same street pay (for the same sized home and lot). Those lower than market rate property tax bills are part of the reason why many seniors are disinterested in selling and moving. Under Prop 60 and Prop 90, though, there’s a one-time possibility of moving and taking that low property tax basis along. Today we’ll look at that.

Proposition 60 and Proposition 90 are similar. There’s a great deal of Prop 60 / 90 information on the website of the California State Board of Equalization. Prop 60 allows the over 55 home owner to transfer the property tax basis (with some caveats) within that same county. Prop 90 allows the same transfer from one county to the next – but few are now participating and it seems to be an ever-shrinking list (so best to triple check before selling the home and counting on the transfer to still be allowed).

In addition to the age requirement of 55+, the replacement property must be of equal or lesser value and must be purchased within 2 years of the sale of the first property.

Per the Santa Clara County Tax Assessor’s office, “Proposition 90 allows homeowners 55 years of age or older to transfer the base year value of their principal residence in one county to a newly purchased or constructed replacement residence in another county. Only a limited number of counties participate in Proposition 90.”

Here are the listed counties which participate in Prop 90:

APPROVED COUNTIES EFFECTIVE DATE
Alameda November 9, 1988
El Dorado February 15, 2010
Los Angeles November 9, 1988
Orange November 9, 1988
Riverside September 19, 2013
San Bernardino October 7, 2014
San Diego November 9, 1988
San Mateo November 9, 1988
Santa Clara November 9, 1988
Ventura May 4, 1992

 

If you have owned a home in Los Gatos, Monte Sereno or nearby for decades, are over 55 and haven’t used this one-time transfer opportunity, you might want to consider downsizing in such a way that your lower tax bill can go with you. Moving from a high end area to a lower cost one is a popular option for many Silicon Valley residents who take the cash out of their sale and put the proceeds (or what isn’t taxed for capital gains) into their retirement fund. I’ve seen clients move from the west valley areas to places such as the Santa Cruz Mountains (prop 60), Livermore (in Alameda County, prop 90), or to further destinations.

 

Related Reading:

Is your property tax assessment too high?

What are supplemental taxes?

When a parent, spouse or loved one dies b what do you need to know or do about the house?