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Folks 55 and Over May Be Able To Keep Their Prop 13 Assessed Valuations When Downsizing
Public Agency and Real Estate Land Use Law Update | 7/27/2010
Property tax for a recently acquired property is generally based upon the current market value of the property, upon the change of ownership. This means that folks that have enjoyed low Proposition 13 assessed valuations on their existing residence will lose the low Prop 13 value when they move to a new home, even if they are “down-sizing.” If you or your spouse is over 55 (when your old home is sold), however, Propositions 60 and 90 allow you to replace your primary residence with a new home of equal or lesser value and transfer the Prop 13 assessed valuation from your old home to the new property. For example, if you qualify, you could sell your $600,000 Ventura home [Prop 13 assessed value of $120,000] and move to a new $400,000 home in Camarillo; the new Camarillo assessed value will be $120,000!
To qualify, the original and replacement properties may both be located in Ventura County or the original property may be located in a different county in California (if the replacement property is located in a county other than Ventura County, you must check with that other county to determine if that county allows “inter county” transfers of Prop 13 assessed valuations – not all counties allow this). Also note that this relief is not automatic – you must file a claim within three years following the purchase of the replacement property. There are additional requirements and restrictions which must be met to qualify.
For more information regarding this issue, contact Ramon L. Guizar or any member of the Firm's Real Estate Law Group.