There are some exemptions available to homeowners age 55 and over when
it comes to property taxes that can be advantageous when selling a
principal residence and purchasing another home as a principal
According to information supplied by Realtor
this exemption—Proposition 60—allows certain homeowners ages 55 and over
to transfer the assessed value of their old principal residence to a new
principal residence as long as their new residence is located in the
same county as the old residence and certain other criteria are met.
There is also another similar exemption that allows homeowners ages 55
and over to buy a new residence in another county and avoid a property
tax reassessment called Proposition 90.
To take advantage of Proposition 60, both the seller and the residence
must meet certain requirements. On the date of the sale of the old
principal residence, the seller, or at least one spouse if the house is
being sold by a married couple, has to be 55 years of age or older and
residing in the house.
If a principal residence is co-owned by non-married individuals and one
of the co-owners is over 55 and residing in the residence, then the
exception may apply to the individual who is over 55. This exemption can
generally be claimed only once. If an individual has already claimed
this exemption and then gets married or divorced, the rules are more
complex. It's a good idea to consult a tax advisor for specific details,
In determining if an owner is eligible for this exemption,
said assessors will usually look to see that the original property was
eligible for the homeowner's exemption at the time the old residence is
sold and that the new residence is eligible for the homeowner's
exemption at the time the benefit is claimed. This helps prove that the
residence was in fact the taxpayer's principal residence. An example of
some types of property that can qualify as principal residences are
single-family houses, stock co-ops, condominiums, and certain
owner-occupied units that are part of a multi-unit building.
The new residence is required to be purchased or built within two years
before or after the sale of the old residence. The purchase price of the
new principal residence generally has to be equal to or less than the
sales price of the old principal residence. In most situations, the
sales prices of both the old and new residences are the only two values
that need to be compared. There are some other rules regarding inflation
percentages that might apply, so it's important to check with the local
assessor's office before taking any action.
To further the ability of California homeowners age 55 and over to
transfer their assessed values to their new residences, voters also
passed Proposition 90. This proposition allows homeowners ages 55 and
over to transfer the assessed value of the old principal residence to
the new residence located in a different county if that county has
elected to participate in the Proposition 90 program.
Under this law, a county's board of supervisors can elect to have its
county be a qualified participating county. Homeowners can then purchase
their replacement residence in any participating county.