Have you been thinking of moving? Have you been dreaming of downsizing to a home with a smaller yard and a more walkable lifestyle? Have you decided that it is time to buy a single story home or condominium that allows you to spend more time travelling and less time taking care of a property? Many people over the age of 55 contemplate this possibility, but fear the additional property tax burden might make that move unaffordable.
That is where Proposition 60 comes into play. Prop 60 allows you to transfer your CURRENT property tax assessed value to your new home.
Let's say that you bought a property for $200,000 10 years ago. Your property taxes would be based on the $200,000 purchase price and would have increased no more than a 2% annually. After 10 years, your assessed value could be as high as $239,018 with annual property taxes of $2,988. With the average single family home in San Diego valued at $525,000 having annual property taxes of $6,562.50, being able to transfer your tax basis will save you a lot of money after you purchase your new home.
Of course there are requirements for Prop 60 to apply to your new property:
- You or your spouse must be at least 55 years of age when the original property was sold.
- The original property and new property must be within the same county.*
- You can only use the transfer once in a lifetime.
- The new replacement property must be of equal or lesser value than the original property sold.
- The new replacement property must be built or bought within 2 years of selling the original property.
- Your original property must be your primary residence and have been eligible for the homeowners' exemption or disabled veteran's exemption.
* Prop 90 allows you to purchase your replacement home in another of 10
California counties and still transfer your assessed value.