Seniors in California May Be Able to Transfer Property Tax Rate to New Home
People age 55 and older are allowed to transfer their current home's property tax liability to their replacement property. This is provided under Assembly Bill 60 (AB60) and allows seniors to keep their current property tax assessed value when they sell their home in California and buy another home or condo of equal or lesser value. Generally Proposition 13 keeps property taxes low in CA as the assessed value of a home can only rise annually by no more than the rate of inflation or two percent, whichever is less. Seniors who live a big house often times would like to sell and move to a smaller place. Because property taxes are based on assessed values at the time of purchase often times the newly purchased home or condo would normally result in a much higher tax being imposed on the senior. AB60 allows the senior to keep her current property tax liability.
Thus if a senior bought her home in California which is currently assessed at $100,000 (due to Proposition 13) and sells her home for $1,000,000 and purchases a new condo at $800,000, the senior can still pay taxes based on the old $100,000 assessment.
This provision can only be used once during a persons life-time. The home must be in the same or reciprocal county and the senior must file the necessary application with their county's tax assessor. There are a few exceptions. Contact your CPA or tax attorney for advice on how to do so and the provision if you plan to try and make use of AB60.
Thus if a senior bought her home in California which is currently assessed at $100,000 (due to Proposition 13) and sells her home for $1,000,000 and purchases a new condo at $800,000, the senior can still pay taxes based on the old $100,000 assessment.
This provision can only be used once during a persons life-time. The home must be in the same or reciprocal county and the senior must file the necessary application with their county's tax assessor. There are a few exceptions. Contact your CPA or tax attorney for advice on how to do so and the provision if you plan to try and make use of AB60.