Property Tax Value Basis Protection in California on Home Selling and Buying

By
Real Estate Sales Representative with Coldwell Banker Previews, Irvine, South OC

Property tax

 

For home owners age 55 years of age or more in California, it's possible to plan and protect property tax assessed value basis on the sale of a home and buying replacement.   Ca property taxes

Home value basis protection is important in California where most property taxes are paid at one percent of assessed value.

assessed value protectionAssessed value protection for people 55 years of age and over who want to sell their home and buy another is especially important.  on sale of home

California Proposition 60 was a constitutional amendment approved by the voters in 1986 ~ Section 69.5 of the California Revenue & Taxation Code~ allowing transfer of an existing Proposition 13 base year value from a former residence to a replacement residence if certain conditions are met.  CA proposition 60

This benefit is OK for homeowners who are at least 55-years of age and meet requirements and conditions:

  • Both the original property (former residence) and its replacement must be located in the same county.  However, there are are differents rules for each county in CA according to Proposition 90, and some do not allow transfering tax basis to county location of replacement property.

55 years of age or moreAs of the date of transfer of the original property, the seller or a spouse living with the seller must be at least 55 years old.

 

  • A Person is eligible for this possible protection only once during their lifetime.  

The REPLACEMENT dwelling MUST BE OF EQUAL TO OR LESSOR VALUE THAN THE ORIGINAL PROPERTY.  But what is equal or lesser value?

In general, "equal or lesser value" means that 100 percent of the market value of an original property if a replacement dwelling is purchased before the original property is sold.

     a. 105 percent of the market value of an original property if a replacement dwelling is purchased within one year after the sale of the original property.

     b. 110 percent of the market value of an original property if a replacement dwelling is purchased within the second year after the sale of the original property.

     c. For equal or lesser value, comparison must be made using the full market value of the original property and the full market value of the replacement dwelling as of its date of purchase or completion of new construction. 

Contact your local county assessor on other requirements, such as homeowners exemption required, market value determined, whether it can be constructed after 198, whether replacement to be constructed within two years of sale of original, whether original is subject reappraisal at current market value.

TIMING OF CLAIM:  Without exception, a claim for relief must be filed within three years of the date a replacement dwelling is purchased or new construction of a replacement dwelling is completed.

consult with REALTOR

Qualifying for this property tax value basis protection under Prop 60 is complicated, and you should consult with an experienced professional REALTOR.

__________________________________________

Disclaimer:  This is for information only and is not the providing of professional tax or legal services.  Before selling and buying a home with an idea to take advantage of Proposition 60 and 90 property tax assessed value basis value protection in California, you should consult with a lawyer and with an experienced REALTOR. 

If you and or your property to be sold or bought are in Orange County, CA, contact the office of Orange County Assessor (click here for information).

__________________________________________________________________________

Harrison K. Long - Business Solutions and Advisory - REALTOR® and broker associate, Coldwell Banker Residential Brokerage - Phone: 949-854-7747  -  CA DRE 01410855

Our property web sites @ www.OCPropertyNews.com  -  www.LiveAtNewportBeach.com - www.CostaMesaLive.com  -  www.Irvine-homevalues.com  -  www.NewportCoastLive.com  -  www.CoastLivinghomes.com  -  www.OCHomeValueGuide.comwww.LiveAtIrvine.com  -  www.ExploreOCHomes.com  -  www.LiveAtLagunaBeach.com - www.LiveAtOrangeCounty.com - 

contact us here"Helping People, Moving Forward, Developing Relationships and Protecting Property Values" 

We list and sell homes and properties at Orange County, California, and thanks for contacting us about seller and buyer opportunities. 

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Topic:
ActiveRain Community
Location:
California
Groups:
All things California
Orange County Real Estate
Realtors®
The Economics of Real Estate
Tags:
property tax
property tax basis
proposition 13
proposition 60
proposition 90
california
real estate

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Rainmaker
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Brian Madigan
LL.B., Broker
RE/MAX West Realty Inc., Brokerage (Toronto)

Harrison,

Very interesting. Thanks for the information.

We don't have anything like this in Ontario.

 

Brian

September 14, 2009 06:07 PM
Rainmaker
461,064
Harrison K. Long
business, REALTOR , GRI, Broker
Coldwell Banker Previews, Irvine, South OC

Brian ... Thanks for your comment.  Most US states have not adopted such laws allowing for protection of property tax basis protection for people 55 years of age and over. 

We in California have Proposition 13 property tax basis valuation, which says that assessed value is what it is at the time of purchase, which can be increased by county assessor limited to two percent per year.  Example:  If somebody bought a home in 1985 at $200K, assessed value would be $200k plus two percent per year.  That home might be work $800k today, and property tax basis is protected by Prop 13.

Some people over the age of 55 want to sell their home and buy a less expensive home and move their property tax basis from the first home to the 2nd home.

September 14, 2009 06:13 PM
Anonymous
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