Props 60, 90 bring home some extra help

New laws will benefit those who are 55 and older


Would you like to sell your home but fear the impact of higher property taxes on your budget? If you are 55 years of age or older, California State Propositions 60 and 90 may be just what the doctor ordered.


Props 60 and 90 have nothing to do with the one-time Federal IRS capital gains tax break for Sellers of $250,000 (single seller) or $500,000 (married couples). Props 60 and 90 are California State laws that allow sellers in certain counties to take their current property tax basis with them to their replacement home.


Prop 60 provides for senior citizen homeowners to sell and buy or construct replacement properties within the same county and take the tax basis from their "original property" with them. Prop 90 provides that the "original property" may be located in any county within California, but the "replacement property" must be located in one of the participating counties. The seven participating counties are currently Alameda, Los Angeles, Orange, San Diego, San Mateo, Santa Clara and Ventura.


These are the eligibility requirements:


1. The seller, or a seller’s spouse residing with the seller, must be at least 55 years old on the date the original home closes escrow. If there is more than one owner meeting the age criteria, they must choose which one will use the benefits. That person must have been eligible for the California Homeowners’ Exemption or the Disabled Veteran’s Exemption on the property. Prop 60 is a once in a lifetime benefit which cannot be used again if one of the owners previously used it. If one of the owners is not 55 at the time of the sale, he/she may use Prop 60 at a later date but not on the same "original" and "replacement properties."


2. For Proposition 60, the replacement property must be (1) located in the same county, (2) of equal or lesser current market value than the original home, (3) the owner’s principle residence and (4) eligible for the county Homeowner’s Exemption or the Disabled Veteran’s Exemption.


3. Two or more owners of qualifying properties may not combine their values to qualify for one replacement home of a higher value than the most valuable of the original properties.


4. The "equal or lesser" requirement applies to the entire replacement property even if the owner of the original home will only own a partial interest in the replacement property.


5. Replacement property applications must be submitted within three years following the purchase date, or new construction completion date, of the replacement property.


6. The window of time for the replacement residence is four years. It must be purchased or newly constructed within two years of the sales date of the original property (before or after). The replacement property must have been purchased or constructed on or after November 5, 1986 if the original was located in Los Angeles County, or after November 9, 1988 if located outside of Los Angeles County. If the replacement property is purchased before the sale of the original property, the replacement property will be reassessed at the purchase price and later reassessed at the base value of the original property once it is sold and the application processed.


7. Types of acceptable property include single family residences, planned unit development units, condominiums, cooperative housing, corporation units or lots and mobile homes subject to property taxes.


Susan Stone has been an Agoura Hills resident since 1982. She has written articles for a number of publications and has taught homebuyer classes for Bank of America. As a broker associate with White House Properties, Susan provides real estate and relocation services to and from the San Fernando and Conejo valleys. Contact her at (818) 865-0944.





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