What You Need to Know About Prop 60/90
Empty Nesters face many challenges when it comes to selling their home and buying a replacement property. Once the children leave the nest and you and your partner are left with a lot of house, it is a common time to start considering selling, but after looking at the market you begin to question whether you will be able to afford a replacement home in your same neighborhood! The reality starts to hit that after 20+ years or so in a home, the Real Estate market has seen many changes and is in a much different place then when you bought. This is a common theme with our empty Nesters, but that is why Los Angeles offers the tax incentive of Prop 60/90, to help homeowners 55+ take their tax base with them to their replacement home. Find out more about this incentive here and make sure to check in with your CPA!
Prop 60 allows property owners over the age of 55 to move within their current county while keeping the property tax base assessment from their original property.
Prop 90 serves as an extension to Prop 60, which allows property owners to move across county lines.
- The seller or their spouse must be age 55 or older as of the date of sale of the original property
- This property tax transfer can only be used once
- The replacement property must be your principal residence and must be eligible for the homeowners’ exemption or disabled veterans’ exemption.
- The replacement property must be purchased or newly constructed within 2 years of the sale date of the original property
- The replacement property must be of equal or lesser “current market value” than the original property. The “equal or lesser” test is applied to the entire replacement property, even if the owner of the original property purchases only a partial interest in the replacement property. Owners of two qualifying original properties may not combine the values of those properties in order to qualify for a Proposition 60 base-year value transfer to a replacement property of greater value than the more valuable of the two original properties.
- To receive retroactive relief from the date of transfer, you must file your claim within three years following the purchase date or new construction completion date of the replacement property.
- Replacement property purchase price must not exceed:
- 105% of the sales price of original property if purchased within the 1st year after the sale of original residence
- 110% of the sales price of original property if purchased within the 2nd year after the sale of original residence
The original property must be subject to reappraisal at its current fair market value at the time of sale, unless the buyer(s) of your original property also qualify the property as a replacement property for a base year value transfer due to disaster relief or a base year value transfer for a severely and permanently disabled person. Therefore, most transfers between parents and children will not qualify.
Would I still qualify for Proposition 60 benefits if I was a few months shy of 55 when my property sold, but over 55 when I purchased my replacement property?
No, you must be at least 55 when your original property sells. While you may be 54 when you purchase your replacement property, you must be at least 55 when you sell your original property.
PROP 90 – PARTICIPATING COUNTIES
El Dorado County
Los Angeles County
San Diego County
San Mateo County
Santa Clara County
I qualify. Now what?
File a claim with an assessor who will confirm your application is qualified to pass. The claim must be obtained and submitted in the county where the replacement property resides.
- The claim form, BOE-60-AH, Claim of Person(s) at Least 55 Years of Age for Transfer of Base Year Value to Replacement Dwelling, may be obtained from the assessor’s office. Some counties offer a downloadable form from their internet website, which can be accessed via the Board’s website: /proptaxes/assessors.htm.
I applied and received the benefits of Proposition 60 or 90 before. Can I apply again?
No. This is a one-time only deal, unless you were not granted benefits, then you can apply again, or for disability reasons their is a separate form.
More Resources regarding this benefit:
Have more questions?
Contact The Inman Team at Contact@InmanTeam.com
*Please refer to your TAX CPA or the County Assessors Office.
Information deemed Reliable but not Guaranteed.