Are you over 55 and thinking about selling your home and moving into something smaller, but worried about the tax implications when you relocate? If so, you arent alone. As the baby boomers find themselves approaching retirement age and becoming empty nesters, their housing needs are changing along with their lifestyles - but inflation and taxes just seem to keep going up, up, up. Fortunately some relief, in the form of Prop 60, is available.
What is Prop 60?
Proposition 60 is a constitutional amendment, approved by California voters, that provides property tax relief under certain circumstances. Essentially, what Prop 60 does is allow qualifying property owners to replace their primary residence with a new home of equal or lesser value and maintain their same tax base. Why, you might wonder, would anyone want to do that? Wouldnt my property taxes be less on a home of lesser value? Not necessarily. With Prop 60, what is transferred is the Proposition 13 or base year value of the old home, which can be substantially less than the current market value of either home.
Orange County Mortgage & Finance::
First Time Home Buyer: The State of California created this program to assist first time home . To qualify for Prop 60, you must be 55 years or older,
http://www.ocrealestateblog.com/blog/OrangeCountyMortgageFinanceHOME |
How can I qualify for Prop 60?
Both the original home and the new home must be located in the same county.
Both the original and replacement properties must be your primary residence.
Both properties must be eligible for the Homeowners Exemption or Disabled Veterans Exemption.
The seller or spouse residing in the home must be at least 55 years old when the original property is sold.
The replacement home must be of equal or lesser value than the current market value of the original home. There is a little wiggle room within this rule, depending on when the new property is purchased. For the purchase of a home (or completion of new construction) that occurs 1 to 2 years after the sale of the original home, the equal or lesser rule can change slightly. Talk to your county assessor for details on this.
AsianWeek::
Meanwhile, Sunset District Realtor John Wong predicts that Prop. G will hurt home buyers, the majority of whom have been Asian American in recent months,
http://asianweek.com/110598/coverstory.htmlHOME |
Purchase or completion of construction of the replacement property must be completed within two years of the sale of the original property.
Application for tax relief must be filed within 3 years of the purchase (or completion of construction) of the new home.
This is a once in a lifetime benefit. Neither spouse can file again.
How do I file for Proposition 60 tax relief?
Contact your county assessors office. The assessor will determine if the transaction qualifies and provide you with claim forms.
Ive heard something about Proposition 90. What is that?
Proposition 90 is an amendment that permits the property owner to carry the benefits of Prop 60 throughout California. Each county in California has the option to accept tax base transfers from other counties, allowing qualifying homeowners more flexibility when planning a move. Counties are not required to participate, and currently there are only 7 counties in California that accept Prop 90. These counties include Los Angeles, Orange, Ventura, San Diego, Alameda, San Mateo and Santa Clara. This number is subject to change, as counties have the option to repeal their participation.
Prop 60 and Prop 90 are great extensions of Proposition 13, which was the initial break offered to the taxpaying public. If you think either might be something that will work for you, please consult your tax advisor or your county assessor for details.
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Prop 60: Great News For California Home Buyers Over 55