Who Says It’s Not Good To Be Over 55?

The kids may be gone and thoughts of retirement are lingering. You may be thinking, “When is a good time?” “Am I financially ready?” “Will my home fit my future needs?” “How will I fill my days?

Timing and financial readiness tend to be the biggest questions. As well, analyzing if one’s home can meet a retiree’s need, including concerns like physical maintenance, multiple floors and overall costs. For many future retirees, this may be a good time to downsize! The good news is if you are over 55 and living in a qualifying California county*, you are able to transfer your current property tax base with you when you move.

California proposition 90 allows homeowners 55 years or older to transfer the base year value of their principal residence in one county to a newly purchased or constructed replacement residence in another county. Only a limited number of counties participate in Proposition 90 (see participating counties below).

What are the qualifications?

To qualify for a Prop 90 tax base transfer, a few criteria must be met.

1. First, either the claimant or claimant’s spouse must be age 55 or older when the original residence is sold.
2. The market value of the replacement residence must be equal to or less than the market value of the residence sold.
3. The replacement residence must be purchased or newly constructed within two years either before or after the current residence is sold.
4. Qualifying counties include: Alameda, El Dorado, Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Mateo, Santa Clara, Tuolumne, and Ventura.

Bottomline, it’s an opportunity for a future retiree to get into a home that may fit their new lifestyle without resetting their property tax base. Feel free to contact us for questions or see below for additional information.

Detailed requirements for the Prop 90 exclusion include, but are not limited to:

• The principal claimant or the claimant’s spouse who resides with the claimant must be at least 55 years of age at the time the original residence is sold. The claimant must be an owner on record of both the original and replacement residences.
• The replacement residence must be equal to or lesser in value than the original residence. “Equal to or lesser in value” has been defined as: 100 percent of the market value of the original property as of its date of sale if the replacement dwelling is purchased before the original property is sold; 105 percent of the market value of the original property as of its date of sale if the replacement dwelling is purchased within one year after the original property is sold; or 110 percent of the market value of the original property as of its date of sale if the replacement dwelling is purchased between one and two years after the original property is sold.
• The replacement residence must be purchased or newly constructed within two years either before or after the sale of the original residence. The purchase or new construction of the replacement dwelling must include the purchase of that portion of land on which the replacement dwelling will be situated.
• The sale of the original residence must qualify for reassessment under the provisions of California Revenue and Taxation Code Section 110.1
• The principal claimant must have ONE of the following:
  • Received, or was eligible for, a Homeowner’s Exemption OR received a Disabled Veteran’s Exemption on both the original and replacement residences
• Relief pursuant to Section 69.5 (Proposition 60 and 90) of the Revenue and Taxation Code can be granted only once, except for certain circumstances regarding severely and permanently disabled persons as defined in Revenue and Taxation Code Section 74.3.
• Claims must be filed within three years from the date the replacement residence is purchased or newly constructed to receive full relief. Claims filed after the three year time period will receive Prospective Relief only. You must complete the claim form and provide evidence and/or declare under penalty of perjury that you are at least 55 years of age.
• Special rules apply to multi-unit dwellings and mobile homes.  Please contact Santa Clara County Assessor’s office at 408-299-5300.

How To Apply?

Applications for Proposition 90 must be filed in the county where the newly purchased residence is located, and this must be a county participating in the Prop 90 program. The effective dates and filing fees vary from county to county. Application forms for Prop 90 requests may be obtained by contacting the Real Property Division of the Santa Clara County Assessor’s Office or downloading the form below.

Claim for 55 Years of Age to Transfer the Base Year Value

More information

• State Board of Equalization: Frequently Asked Questions
• Assessor Larry Stone speaks about Prop 60/90 Benefits and Qualifications

Proposition 90 Participating Counties*

*Call to verify

If you have further questions about this or about getting your home ready to sell, please call our team at 408.723.1515 or Team@MyrickEstatesTeam.com.

Denise Myrick