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How to Save on
Property Taxes When Selling
Did you know that, in some California counties, sellers are able to transfer
their tax base to a new property?
Under Proposition 90, which was approved in 1988, a seller may transfer the
base year value of the original residence to any replacement residence of
equal or lesser value in another California county, providing that the county
has adopted Proposition 90 rules and the following conditions are fulfilled.
This provides an incentive for some people over the age of 55 to move into
smaller, less expensive homes without being penalized.
In order to qualify for the tax relief:
1. The buyer of the new residence or the spouse of the buyer must be 55 years
old on the day escrow closes on the original residence.
2. The new residence must be the same or lesser value than the original
residence.
3. The new residence must be in a county, which has adopted Proposition 90,
which will allow the property to be purchased without an assessment.
As of 1999, Proposition 90 counties are as follows:
Adopted ordinance: Alameda, Kern, Los Angeles,
Monterey, Modoc, Orange, San Diego, San Mateo, Santa Clara and Ventura.
Under Proposition 60, which was approved in 1986, a seller may transfer the
base year value of the original residence to any replacement residence of
equal or lesser value in the same county, again, providing that the county
has adopted Proposition 60 rules and the above conditions are fulfilled.
In order to take advantage of this tax break, you must file a claim with the
County Tax Assessor’s office that will then determine if the transaction
qualifies.
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