For many CA seniors, moving into a new home later in life is often an option that feels impossible. Increased Real Estate taxes, when purchasing a new home, makes the switch incredibly costly. When you purchase a new Property; the base tax value is based on the current value of the new home, leaving you with a far higher property tax burden. Prop 60 can help. This Proposition allows seniors to maintain the base tax value of their old home when purchasing or building a new home within two years. Prop 90 allows seniors to use the benefit of Prop 60 in any county in California. These Propositions essentially allow individuals over the age of 55 to move into a new residence (of equal or lesser value), and pay less amounts in Property taxes than they would without the Propositions in effect. So who qualifies? Let’s go over a few of the requirements.
- You or your spouse must be at least 55 years of age when selling the original Property
Because these Propositions only apply to seniors, you must be a qualifying senior at the time you sell the Property. If you or your spouse turn 55 after selling your home, you won’t qualify. If you’re almost 55 and considering buying a new home, it’s in your best interest to wait.
- The original and new Property must be in the same county. Sometimes
This is where Prop 90 comes into effect. While Prop 60 only allows for the transfer of your base tax value from your old home to your new home within the same county, Prop 90 allows for this transfer to happen within any county in California. However, the decision is at the discretion of each individual county. Check with your current county and your prospective county to ensure that they allow inter-county transfers. Your real estate agent may be able to assist with obtaining this information on your behalf.
- The original Property has to have been eligible for the Homeowners’ or Disabled Veterans’ Exemption. Your new Property also has to be eligible for the exemption
Both your old and new Properties have to be eligible for the Homeowners’ or Disabled Veterans’ Exemption in order to qualify for the benefit. Your old and new properties also need to be your primary residences at the time, in order for you to qualify.
- The transfer is a once in a lifetime opportunity
You can legitimately only use this benefit once in your life, with one exception. If you are required to move again because of a disability after having used the transfer once, you may use the benefit once more. This is stated in Prop 110. However, you cannot use the benefit of Prop 110 first and then use Prop 60.
- Your new Property must be of equal or lesser value than your old Property
Once you sell your old home, you have two years in which you must purchase or build a new home in order to meet the requirement for the benefit. You might be wondering, what exactly qualifies as equal or lesser value? Well, if you purchase your new home before selling your old home, the new home must be 100% or less of the market value of your old Property. If you buy the new Property within a year after selling the old one, the new home must be 105% or less of the market value of your old Property. Finally, if you purchase a new home within 2 years of selling, the market value of your new home must be 100% or lower than the value of your old home.
So now you know a little bit about Prop 60 and Prop 90 and what they mean to you. If you qualify, moving to a new residence is a great idea. I can help you with the home loan that you need! Give me a call at (800) 645-1301 for more information.
CalBRE License #01199120. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, License #4130097, NMLS #37660. These materials are not from HUD or FHA and were not approved by HUD or a government agency. NMLS 252332