TAX SAVINGS FOR AGE 55 PLUS
Proposition 60 and 90 were created to be a property tax savings to those age 55 and therefore allowing homeowners to retain their low property tax basis. Created for homeowners making a move within the same county is Prop 60, while Prop 90 is for when homeowners are leaving one county and going to another. Both amendments to the Constitution of California are approved in specific counties. Therefore, it is best to check the county/counties you are seeking to make the transition in at the California State Board of Equalization
Guide for Proposition 60/90
- When selling your home and concurrently closing on another home, the new home must be equal to or less than the sale of current residence.
- If you sell your home and buy within the first 12 months, you can actually purchase 5% above what you sold your home for. This allows for appreciation in the housing market.
- Should you be purchasing during months 13-24, you are allowed to go up to 10% above your previous home sale.
When a Reassessment Can Happen
More importantly, there has been some concern that the county assessor may choose to reassess your new purchase. Talking with the Orange County Assessor’s office, they indicated that the assessor will only reassess if the home purchase was bought way below market value, i.e. foreclosures, short sales, etc. This clarification was necessary for a client that was utilizing Prop 60 to make a transition to their next home. For clarification on these guidelines go to Orange County Tax Assessor.
Currently the California counties approved are:
- El Dorado*
- Los Angeles
- San Bernardino
- San Diego
- San Mateo
- Santa Clara
Utilizing these propositions really create a great tax benefit for those 55 yrs. and over. More importantly, it allows them to keep their low property tax basis, which can save hundreds of dollars annually. For more questions about Prop 60 and Prop 90 in California, please visit California’s regulations at “boe.ca.gov”. or the Orange County Tax Assessor.
By Holly Young