How to Sell Your Home
and Keep Your Property Tax Base
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Proposition 13, 60 and 90
Are you an empty nester looking to downsize but hesitant to sell because of a higher tax rate on the new property? If the answer is yes, you might want to know about propositions 13, 60 and 90.
Under Proposition 13, homes are reassessed for property-tax purposes when there is a change in ownership or new construction. In-between ownership changes, the assessed value can go up by an inflation rate not to exceed 2% a year. Propositions 60/90 of the California Constitution allow a person who is over age 55 to sell his or her principal place of residence and transfer its base year value to a replacement dwelling of equal or lesser value, but there are restrictions.
The new home must be purchased or built within two years of the sale of the original principal residence. If the new house is purchased before the old house is sold, the market value of the new house on its purchase date cannot exceed 100% of the old home's market value on the date it is sold.
The new home must be located in the same county as the old one (proposition 60 - intracounty) or, in one of the following counties (prop 90 – intercounty): Alameda, Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Mateo, Santa Clara, Tuolumne, Ventura.
If you are thinking about downsizing and have any questions regarding the eligibility requirements for propositions 60 or 90, I would be happy to answer any questions you may have to help you make an informed decision.
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