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Proposition 90
It happens to almost every family in time. The kids move out and the house that once was perfectly suited to a growing family suddenly
becomes “too much house” for Mom and Dad. But the dilemma concerns more than space. Is it wiser to stay in the home and enjoy the
benefits of a smaller, Proposition 13-protected tax base? Or should the couple relocate to a smaller (perhaps newer) home that suits
their current needs and be faced with a high property tax bill based on current “hot” property values?
Fortunately, Proposition 90 has been enacted and is currently adopted by nine California counties to address this very issue.
Proposition 90 permits qualifying California seniors to take with them their former Proposition 13 tax base (provided they move into a
qualifying county).
Are You a Candidate to Profit from Prop 90?
In order to qualify for the significant benefits of Proposition 90, a few reasonably simple criteria must be met:
Getting Proper Value
Under the rules of Proposition 90, the replacement residence must be of equal or lesser value than the original residence. Equal or
lesser value is defined as one of the following:
The claimant may only receive a replacement property base year value transfer once.
Clearly, Proposition 90 has the potential for great profitability to seniors who choose to use it. Through it, Mom and Dad are empowered
to find a more comfortable lifestyle after their children have left the nest.
It happens to almost every family in time. The kids move out and the house that once was perfectly suited to a growing family suddenly
becomes “too much house” for Mom and Dad. But the dilemma concerns more than space. Is it wiser to stay in the home and enjoy the
benefits of a smaller, Proposition 13-protected tax base? Or should the couple relocate to a smaller (perhaps newer) home that suits
their current needs and be faced with a high property tax bill based on current “hot” property values?
Fortunately, Proposition 90 has been enacted and is currently adopted by nine California counties to address this very issue.
Proposition 90 permits qualifying California seniors to take with them their former Proposition 13 tax base (provided they move into a
qualifying county).
Are You a Candidate to Profit from Prop 90?
In order to qualify for the significant benefits of Proposition 90, a few reasonably simple criteria must be met:
- The principal claimant must be at least 55 years of age at the time the original residence is sold. He or she must also be an owner
and resident of the original property at the time of its sale or within two years of the purchase or new construction of the replacement
dwelling. - The sale of the original principle residence must also qualify for reassessment under the provisions of the California Revenue and
Taxation Code or must result in a base-year value determination because the property qualifies as a replacement residence. - The principal claimant must have been receiving or been eligible for a Homeowner’s Exemption or must have been receiving a
Disabled Veteran’s Exemption on the original property either at the time of sale or within two years of the purchase or new
construction of the replacement dwelling.
Getting Proper Value
Under the rules of Proposition 90, the replacement residence must be of equal or lesser value than the original residence. Equal or
lesser value is defined as one of the following:
- 100% of the market value of original property as of its date of sale if a replacement dwelling is purchased before an original property
is sold. - 105% of market value of the original property as of its date of sale if a replacement dwelling is purchased within one year after the
sale of the original property. - 110% of market value of the original property as of its date of sale if a replacement dwelling is purchased within the second year after
the sale of the original property.
The claimant may only receive a replacement property base year value transfer once.
Clearly, Proposition 90 has the potential for great profitability to seniors who choose to use it. Through it, Mom and Dad are empowered
to find a more comfortable lifestyle after their children have left the nest.
© 2007 Laura-Chang.com. All Rights Reserved.
Laura Chang
MBA, REALTOR®
MBA, REALTOR®
Call me today for your
real estate needs!
949.394.4535
real estate needs!
949.394.4535