Propostion 60, which is applicable to Sonoma County, provides tax benefits to those individuals that are thinking about downsizing. How this works is that it allows individuals to transfer their property tax basis of their current home TO the new home they wish to purchase.
The way this benefits those over 55 years old is if their property tax basis is low from being in their current primary residence for a long time. So let’s say, their current annual property are running $1600 per year and the new home they want to purchase (for example a $500,000 purchase price), their property tax annually wold estimate at $6,250. With Prop 60, they would be allowed to obtain the “tax exemption” and transfer over their previous tax basis, keeping their property taxes at the $1600/annually.
There are parameters in which Prop 60 requires in order to utilize this:
You or your spouse must be 55 years of age or older
The replacement property must be your “primary residence”
The replacement property must be of “equal or lesser” value
The replacement property must be built or purchased within 2 years from the sale of previous primary residence (No exceptions)
You must file your tax emption claim within 3 years of the purchase of new primary residence
The original property must have been eligible for the “homeowner’s or disabled veteran’s” exemption either at the time it was sold or within 2 years of the purchase or construction of the replacement property.
Proposition 60 pertains to transfers of property within the county. As I mention, Sonoma County does allow this. Proposition 90 pertains to people transferring from one county to another. At this time, Sonoma County does not allow this, but many other counties do. Do keep in mind that ALL parameters must be met in order to obtain the tax exemption.
For more information regarding how Prop 60 could benefit you if you are looking to downsize you can check the page at the Sonoma County Assessors office here. They can also be reached at (707) 565-1888
With any questions about downsizing or where this market is headed, please contact me at email@example.com or at (707) 477-9885.