I work with clients of all ages, but those who are 55 years and older may be interested in learning more about California Propositions 60 and 90. These allow a person to sell their principal place of residence and transfer the property tax base value to a replacement residence of equal or lesser value when purchased or newly constructed within two years of the sale.
Each varies slightly in its qualifications, so here’s a closer look at each and how they differ from one another.
Proposition 60
What Is It?
Prop 60 allows the transfer of an existing Proposition 13 base year value from a former residence to a replacement residence within the same county, if certain conditions are met.
Who Does it Pertain To?
This benefit is open to homeowners who are at least 55 years old and are able to meet all qualifying conditions (we will take a look at the qualifications in detail below). It is also important to note that Prop 60 applies to all counties.
Where Can I Find More Information?
Proposition 60 was a constitutional amendment that was approved by California voters in 1986. More information can be found in Section 69.5 of the Revenue & Taxation Code.
Proposition 90
What Is it?
On paper, Prop 90 doesn’t look all that different from Prop 60, as they have the same provisions. However, Prop 90 deals with transfers between different counties in California, assuming the new county has enacted Prop 90 because it is optional.
Who Does it Pertain To?
Prop 90 has been adopted by the following counties: Alameda, El Dorado, Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Mateo, Santa Clara, and Ventura.
Where Can I Find More Information?
This list is subject to change, so your local assessor is a great source of information. You can always contact them with specific questions.
Now that we know a bit more about the differences in Props 60 and 90, let’s take an in-depth look at the qualifications needed to utilize these tax rules.
Below is a checklist that will help you determine if you qualify for one or both.
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County: For Prop 60, both the original property (former residence) and its replacement (new residence) must be located in the same county. For Prop 90, the new county must have adopted Proposition 90, so be sure to inquire with the new county to verify.
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Age: Are you or your cohabiting spouse at least 55 years old as of the date of transfer of the original property? If so, you qualify.
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Exemption Eligibility/Primary Residence: The original property must have been eligible for the Homeowners’ Exemption (i.e. was the primary residence) or entitled to the Disabled Veterans’ Exemption.
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Value: The replacement dwelling must be of equal or lesser value than the original property.
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Time: The replacement dwelling must be purchased or newly constructed within two years of the sale of the original property (before or after).
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Reappraisal of Old Property: As a result of its transfer, the original property must be subject to reappraisal at its current fair market value. This means that you must sell your former residence, and it cannot be gifted to anyone else.
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Filing Claim: In order to receive the full relief from Props 60 and 90, it’s important to check with each county to determine their requirements. Some have varying timelines with regard to the purchase of a replacement dwelling, so you will want to make sure that you have all of the specifics in order for your particular county/counties.
Of course, I am happy to assist you with any questions you may have pertaining to Props 60 and 90. However, I am not a tax advisor so for specific advice, contact your tax consultant.
Here is a great resource for more information about Props 60 and 90: https://www.boe.ca.gov/proptaxes/prop60-90_55over.htm
I am a tenured real estate agent in the Pasadena area with years of expertise, and I would love to discuss your real estate needs in more detail.
