If you are a senior citizen, 55 years or older, and are considering selling your home in Alameda county, you may have surprising tax benefits waiting for you.

Normally, if seniors have been in their home for a long time, and are enjoying the tax benefits of Proposition 13, they have had their current home assessed at a very low yearly tax rate.  However, when considering selling their current home, and moving into another, perhaps smaller home, they may experience what could be called "sticker shock" when they see the property taxes on the homes in the marketplace today.  These taxes could be considerably higher than what they are used to, and often for less property in terms of size.  

A solution has been offered in the form of California Propositions 60 and 90.  With a goal to assist older citizens in downsizing, both propositions allow them to transfer their property tax base from their old home to a newly purchased home, thus avoiding the sharp tax increases that would otherwise occur.

Sound complicated?  It's not.  Under Proposition 60, you can sell your Oakland home currently valued at $600,000 (but under Proposition 13 still being assessed at perhaps $180,000), and move into an Alameda home valued at $500,000.  The good news is that the assessed value from your Oakland home will go with you to your Alameda home.  You will begin there being assessed at your old $180,000 value.  This is a huge benefit and tax savings. 

There are a few basic requirements to take advantage of this plan, but considering these benefits, they are not that difficult.  While there are a few more than listed here, the most basic and relevant are:

a. One of the spouses living in the home to be sold must be 55 years of age at the time of the sale.

b. The replacement property must become the buyer's principal residence, and eligible for a homeowner's exemption.

c. The replacement home must be of equal or lesser current market value than the original home.

The final consideration is the difference between Proposition 60 and Proposition 90.

Proposition 90 defines the limits of these tax benefits.  Presently, under this regulation, these benefits apply only within 8 counties who participate in this program.  Right now, those who will allow them are Alameda, El Dorado, Los Angeles, Orange, San Diego, San Mateo, Santa Clara and Ventura counties. These tax benefits resulting on the move to the new home, are at the discretion of each county's tax asssessor, so they need to be cleared first (before the sale is made), with the new county assessor to assure that they will be accepted and recognized upon completion of the sale.

So, if the senior moves from Alameda to San Diego county, he may receive the same benefits as if he had moved within Alameda county only. There are some additional requirements to the list above, but most involve timing of sale and purchase, and I will be glad to assist you in reviewing the whole program.

These propositions are truly a serious benefits to seniors who want to move safely and soundly, and protect their financial future.



Posted by Bruce Wagg on


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