27 Nov Property Tax Savings for Seniors: California’s Propositions 60 and 90
Recently, we have been receiving questions about California’s Propositions 60 and 90, so we wanted to take a moment to discuss them in more detail.
They are quite similar, so, understandably, there would be confusion. But after discussing the unique attributes of each one, we think you will be able to discern between the two.
We also wanted to provide you with an easy to follow checklist to see if you qualify for either Proposition.
What is Proposition 60?
Proposition 60 is a constitutional amendment that was approved by California voters back in 1986. It allows for the transfer of an existing Prop 13 base year value from a former residence to a replacement property within the same county, provided certain conditions are met. Homeowners who are 55 years and older and meet the qualifying conditions in the checklist below can benefit from Prop 60 in all counties.
What is Proposition 90?
Like Prop 60, Proposition 90 has the same qualifications and provisions. Still, the difference comes in that it applies to transfers from one California county to another when the county where the replacement property is located has enacted Prop 90. The enactment is optional, so there is no guarantee that Prop 90 will apply. As of November 2018, the following ten counties have an ordinance enabling the intercounty base year value transfer:
- Alameda: https://www.acgov.org/assessor/decreasetax/transfer-tax/senior-citizens.htm
- Los Angeles: https://assessor.lacounty.gov/propositions-60-and-90/
- Orange: http://www.ocgov.com/gov/assessor/programs/55plus#2179
- Riverside: https://www.countytreasurer.org/TaxCollector/Proposition13andOthers/Proposition6090.aspx
- San Bernardino: https://www.sbcounty.gov/ARC/Main/Assessor/TaxSavingsAndRelief.aspx
- San Diego: https://arcc.sdcounty.ca.gov/Pages/property-tax.aspx#property-tax-relief-for-seniors-and-disabled
- San Mateo: https://www.smcacre.org/reappraisal-exclusion-seniors-or-disabled
- Santa Clara: https://www.sccassessor.org/index.php/tax-savings/transferring-your-assessed-value/senior-citizen-over-age-55-outside-county
- Tuolumne: https://www.tuolumnecounty.ca.gov/738/Property-Tax-Exclusions
For the most up-to-date information, contact the local assessor’s office to see if your original property can be transferred to a replacement in that county under Prop 90.
Now that we have an overview of each, here is a checklist that you can use to determine your eligibility for a transfer of your existing tax basis:
- Seller or a spouse living with the seller is at least 55 years old as of the date of the transfer.
- Principle Residence: the original property is eligible for the Homeowner’s Exemption (i.e., seller’s primary residence) or entitled to the Disabled Veterans’ Exemption.
- Is the value of your replacement dwelling of equal or lesser value than the original property?
- Close escrow or complete construction on the replacement dwelling within the two-year timeline that the original property is sold.
- Original property must be sold or reappraised at the current fair market value as a result of the transfer, and it cannot be gifted to children or anyone else.
Please keep in mind that this checklist is not exhaustive, and it’s best to contact the County Assessor and work with a tax professional to determine your eligibility. You should also check with each county to determine their claim requirements if you are planning to apply for an exemption under Propositions 60 or 90. Both are one-time benefits.
If you would like more information about Props 60 or 90 or have specific questions about the escrow process, our dedicated team of escrow officers would be happy to assist you. Please contact us today!